EATON CORPORATION plc |
(Exact name of registrant as specified in its charter) |
Ireland | 98-1059235 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) | |
Eaton House, 30 Pembroke Road, Dublin 4, Ireland | - | |
(Address of principal executive offices) | (Zip code) |
+353 1637 2900 | ||||||||||||
(Registrant's telephone number, including area code) | ||||||||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||
Title of each class | Name of each exchange on which registered | |||||||||||
Ordinary Shares ($0.01 par value) | The New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
TABLE OF CONTENTS | |||
EX-12 | |||
EX-21 | |||
EX-23 | |||
EX-24 | |||
EX-31.1 | |||
EX-31.2 | |||
EX-32.1 | |||
EX-32.2 | |||
EX-101 INSTANCE DOCUMENT | |||
EX-101 SCHEMA DOCUMENT | |||
EX-101 CALCULATION LINKBASE DOCUMENT | |||
EX-101 LABELS LINKBASE DOCUMENT | |||
EX-101 PRESENTATION LINKBASE DOCUMENT | |||
EX-101 DEFINITION LINKBASE DOCUMENT |
Month | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) | ||||||||||
October | — | $ | — | — | $ | 896 | ||||||||
November | 3,443,941 | $ | 56.38 | 3,443,941 | $ | 702 | ||||||||
December | 651,652 | $ | 52.03 | 651,652 | $ | 668 | ||||||||
Total | 4,095,593 | $ | 55.69 | 4,095,593 |
Name | Age | Position (Date elected to position) | ||
Alexander M. Cutler | 64 | Chairman of Eaton Corporation plc (November 30, 2012 - present) | ||
Chief Executive Officer of Eaton Corporation (August 1, 2000 - present) | ||||
Director of Eaton Corporation (September 22, 1993 - November 30, 2012) | ||||
Craig Arnold | 55 | Director of Eaton Corporation plc (September 1, 2015 - present) | ||
President and Chief Operating Officer of Eaton Corporation (September 1, 2015 - present) | ||||
Vice Chairman and Chief Operating Officer - Industrial Sector of Eaton Corporation | ||||
(February 1, 2009 - August 31, 2015) | ||||
Richard H. Fearon | 59 | Director of Eaton Corporation plc (September 1, 2015 - present) | ||
Vice Chairman and Chief Financial and Planning Officer of Eaton Corporation | ||||
(April 24, 2002 - present) | ||||
Revathi Advaithi | 48 | Chief Operating Officer - Electrical Sector of Eaton Corporation | ||
(September 1, 2015 - present) | ||||
President of Electrical Sector, Americas of Eaton Corporation | ||||
(April 1, 2012 - August 31, 2015) | ||||
President, Electrical Sector, Asia Pacific of Eaton Corporation (July 1, 2009 - March 31, 2012) | ||||
Uday Yadav | 52 | Chief Operating Officer - Industrial Sector of Eaton Corporation | ||
(September 1, 2015 - present) | ||||
President of Aerospace Group of Eaton Corporation (August 1, 2012 - August 31, 2015) | ||||
Executive Vice President, Eaton Business System (January 1, 2010 - July 31, 2012) | ||||
Cynthia K. Brabander | 54 | Executive Vice President and Chief Human Resources Officer of Eaton Corporation | ||
(March 1, 2012 - present) | ||||
Senior Vice President, Human Resources of Gates Corporation | ||||
(April 11, 2009 - January 10, 2012) | ||||
Mark M. McGuire | 58 | Executive Vice President and General Counsel of Eaton Corporation | ||
(December 1, 2005 - present) | ||||
Thomas E. Moran | 51 | Senior Vice President and Secretary of Eaton Corporation plc (November 27, 2012 - present) | ||
Senior Vice President and Secretary of Eaton Corporation (October 1, 2008 - January 1, 2013) | ||||
Ken D. Semelsberger | 54 | Senior Vice President and Controller of Eaton Corporation (November 1, 2013 - present) | ||
Senior Vice President, Finance and Planning - Industrial Sector of Eaton Corporation | ||||
(February 1, 2009 - October 31, 2013) |
(a) | (1) The reports of the independent registered public accounting firm, consolidated financial statements and notes to consolidated financial statements are included in Item 8 above: |
(b) | Exhibits |
EATON CORPORATION plc | |||
Registrant | |||
Date: | February 24, 2016 | By: | /s/ Richard H. Fearon |
Richard H. Fearon | |||
(On behalf of the registrant and as Principal Financial Officer) |
Signature | Title | |||||
* | ||||||
Alexander M. Cutler | Principal Executive Officer; Director | |||||
* | * | |||||
Ken D. Semelsberger | Principal Accounting Officer | Sandra Pianalto | Director | |||
* | * | |||||
Craig Arnold | Director | Todd M. Bluedorn | Director | |||
* | * | |||||
Christopher M. Connor | Director | Michael J. Critelli | Director | |||
* | * | |||||
Charles E. Golden | Director | Linda A. Hill | Director | |||
/s/ Richard H. Fearon | * | |||||
Richard H. Fearon | Director | Ned C. Lautenbach | Director | |||
* | /s/ Gregory R. Page | |||||
Arthur E. Johnson | Director | Gregory R. Page | Director | |||
* | * | |||||
Deborah L. McCoy | Director | Gerald B. Smith | Director | |||
*By | /s/ Richard H. Fearon | |
Richard H. Fearon, Attorney-in-Fact for the officers and directors signing in the capacities indicated |
/s/ Alexander M. Cutler | /s/ Richard H. Fearon | /s/ Ken D. Semelsberger | ||
Principal Executive Officer | Principal Financial Officer | Principal Accounting Officer | ||
February 24, 2016 |
/s/ Alexander M. Cutler | /s/ Richard H. Fearon | /s/ Ken D. Semelsberger | ||
Principal Executive Officer | Principal Financial Officer | Principal Accounting Officer | ||
February 24, 2016 |
Year ended December 31 | |||||||||||
(In millions except for per share data) | 2015 | 2014 | 2013 | ||||||||
Net sales | $ | 20,855 | $ | 22,552 | $ | 22,046 | |||||
Cost of products sold | 14,292 | 15,646 | 15,369 | ||||||||
Selling and administrative expense | 3,596 | 3,810 | 3,886 | ||||||||
Litigation settlements | — | 644 | — | ||||||||
Research and development expense | 625 | 647 | 644 | ||||||||
Interest expense - net | 232 | 227 | 271 | ||||||||
Other income - net | (35 | ) | (183 | ) | (8 | ) | |||||
Income before income taxes | 2,145 | 1,761 | 1,884 | ||||||||
Income tax expense (benefit) | 164 | (42 | ) | 11 | |||||||
Net income | 1,981 | 1,803 | 1,873 | ||||||||
Less net income for noncontrolling interests | (2 | ) | (10 | ) | (12 | ) | |||||
Net income attributable to Eaton ordinary shareholders | $ | 1,979 | $ | 1,793 | $ | 1,861 | |||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||
Diluted | $ | 4.23 | $ | 3.76 | $ | 3.90 | |||||
Basic | 4.25 | 3.78 | 3.93 | ||||||||
Weighted-average number of ordinary shares outstanding | |||||||||||
Diluted | 467.1 | 476.8 | 476.7 | ||||||||
Basic | 465.5 | 474.1 | 473.5 | ||||||||
Cash dividends declared per ordinary share | $ | 2.20 | $ | 1.96 | $ | 1.68 |
Year ended December 31 | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Net income | $ | 1,981 | $ | 1,803 | $ | 1,873 | |||||
Less net income for noncontrolling interests | (2 | ) | (10 | ) | (12 | ) | |||||
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 | ||||||||
Other comprehensive (loss) income, net of tax | |||||||||||
Currency translation and related hedging instruments | (1,078 | ) | (1,019 | ) | (28 | ) | |||||
Pensions and other postretirement benefits | 111 | (315 | ) | 429 | |||||||
Cash flow hedges | 3 | (5 | ) | 3 | |||||||
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (964 | ) | (1,339 | ) | 404 | ||||||
Total comprehensive income attributable to Eaton ordinary shareholders | $ | 1,015 | $ | 454 | $ | 2,265 |
December 31 | |||||||
(In millions) | 2015 | 2014 | |||||
Assets | |||||||
Current assets | |||||||
Cash | $ | 268 | $ | 781 | |||
Short-term investments | 177 | 245 | |||||
Accounts receivable - net | 3,479 | 3,667 | |||||
Inventory | 2,323 | 2,428 | |||||
Deferred income taxes | — | 593 | |||||
Prepaid expenses and other current assets | 369 | 386 | |||||
Total current assets | 6,616 | 8,100 | |||||
Property, plant and equipment | |||||||
Land and buildings | 2,383 | 2,343 | |||||
Machinery and equipment | 5,501 | 5,621 | |||||
Gross property, plant and equipment | 7,884 | 7,964 | |||||
Accumulated depreciation | (4,319 | ) | (4,214 | ) | |||
Net property, plant and equipment | 3,565 | 3,750 | |||||
Other noncurrent assets | |||||||
Goodwill | 13,479 | 13,893 | |||||
Other intangible assets | 6,014 | 6,556 | |||||
Deferred income taxes | 362 | 228 | |||||
Other assets | 995 | 1,002 | |||||
Total assets | $ | 31,031 | $ | 33,529 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities | |||||||
Short-term debt | $ | 426 | $ | 2 | |||
Current portion of long-term debt | 242 | 1,008 | |||||
Accounts payable | 1,758 | 1,940 | |||||
Accrued compensation | 366 | 420 | |||||
Other current liabilities | 1,833 | 1,985 | |||||
Total current liabilities | 4,625 | 5,355 | |||||
Noncurrent liabilities | |||||||
Long-term debt | 7,781 | 8,024 | |||||
Pension liabilities | 1,586 | 1,812 | |||||
Other postretirement benefits liabilities | 440 | 513 | |||||
Deferred income taxes | 390 | 901 | |||||
Other noncurrent liabilities | 978 | 1,085 | |||||
Total noncurrent liabilities | 11,175 | 12,335 | |||||
Shareholders’ equity | |||||||
Ordinary shares (458.8 million outstanding in 2015 and 467.9 million in 2014) | 5 | 5 | |||||
Capital in excess of par value | 11,701 | 11,605 | |||||
Retained earnings | 7,346 | 7,078 | |||||
Accumulated other comprehensive loss | (3,863 | ) | (2,899 | ) | |||
Shares held in trust | (3 | ) | (3 | ) | |||
Total Eaton shareholders’ equity | 15,186 | 15,786 | |||||
Noncontrolling interests | 45 | 53 | |||||
Total equity | 15,231 | 15,839 | |||||
Total liabilities and equity | $ | 31,031 | $ | 33,529 |
Year ended December 31 | |||||||||||
(In millions) | 2015 | 2014 | 2013 | ||||||||
Operating activities | |||||||||||
Net income | $ | 1,981 | $ | 1,803 | $ | 1,873 | |||||
Adjustments to reconcile to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 925 | 983 | 997 | ||||||||
Deferred income taxes | (100 | ) | (382 | ) | (311 | ) | |||||
Pension and other postretirement benefits expense | 323 | 293 | 384 | ||||||||
Contributions to pension plans | (330 | ) | (362 | ) | (341 | ) | |||||
Contributions to other postretirement benefits plans | (31 | ) | (40 | ) | (59 | ) | |||||
Excess tax benefit from equity-based compensation | (1 | ) | (20 | ) | (32 | ) | |||||
Gain on sale of businesses | — | (68 | ) | (2 | ) | ||||||
Changes in working capital | |||||||||||
Accounts receivable - net | 5 | (205 | ) | (231 | ) | ||||||
Inventory | (20 | ) | (152 | ) | (92 | ) | |||||
Accounts payable | (120 | ) | 49 | 86 | |||||||
Accrued compensation | (28 | ) | (32 | ) | — | ||||||
Accrued income and other taxes | (9 | ) | (73 | ) | 1 | ||||||
Other current assets | 7 | 73 | (42 | ) | |||||||
Other current liabilities | (76 | ) | 8 | (46 | ) | ||||||
Other - net | (155 | ) | 3 | 100 | |||||||
Net cash provided by operating activities | 2,371 | 1,878 | 2,285 | ||||||||
Investing activities | |||||||||||
Capital expenditures for property, plant and equipment | (506 | ) | (632 | ) | (614 | ) | |||||
Cash (paid for) received from acquisitions of businesses, net of cash acquired | (72 | ) | 2 | (9 | ) | ||||||
Sales (purchases) of short-term investments - net | 37 | 522 | (288 | ) | |||||||
Proceeds from sales of businesses | 1 | 282 | 777 | ||||||||
Other - net | (35 | ) | (31 | ) | (68 | ) | |||||
Net cash (used in) provided by investing activities | (575 | ) | 143 | (202 | ) | ||||||
Financing activities | |||||||||||
Proceeds from borrowings | 425 | — | 9 | ||||||||
Payments on borrowings | (1,027 | ) | (582 | ) | (1,096 | ) | |||||
Cash dividends paid | (1,026 | ) | (929 | ) | (796 | ) | |||||
Exercise of employee stock options | 52 | 54 | 121 | ||||||||
Repurchase of shares | (682 | ) | (650 | ) | — | ||||||
Excess tax benefit from equity-based compensation | 1 | 20 | 32 | ||||||||
Other - net | (10 | ) | (43 | ) | (6 | ) | |||||
Net cash used in financing activities | (2,267 | ) | (2,130 | ) | (1,736 | ) | |||||
Effect of currency on cash | (42 | ) | (25 | ) | (9 | ) | |||||
Total (decrease) increase in cash | (513 | ) | (134 | ) | 338 | ||||||
Cash at the beginning of the period | 781 | 915 | 577 | ||||||||
Cash at the end of the period | $ | 268 | $ | 781 | $ | 915 |
Ordinary shares | Capital in excess of par value | Retained earnings | Accumulated other comprehensive loss | Shares held in trust | Total Eaton shareholders' equity | Noncontrolling interests | Total equity | |||||||||||||||||||||||||||
(In millions) | Shares | Dollars | ||||||||||||||||||||||||||||||||
Balance at January 1, 2013 | 470.7 | $ | 5 | $ | 11,271 | $ | 5,805 | $ | (1,964 | ) | $ | (4 | ) | $ | 15,113 | $ | 65 | $ | 15,178 | |||||||||||||||
Net income | — | — | — | 1,861 | — | — | 1,861 | 12 | 1,873 | |||||||||||||||||||||||||
Other comprehensive income, net of tax | 404 | 404 | — | 404 | ||||||||||||||||||||||||||||||
Cash dividends paid | — | — | — | (796 | ) | — | — | (796 | ) | (5 | ) | (801 | ) | |||||||||||||||||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $32) | 4.4 | — | 212 | (4 | ) | — | 1 | 209 | — | 209 | ||||||||||||||||||||||||
Balance at December 31, 2013 | 475.1 | 5 | 11,483 | 6,866 | (1,560 | ) | (3 | ) | 16,791 | 72 | 16,863 | |||||||||||||||||||||||
Net income | — | — | — | 1,793 | — | — | 1,793 | 10 | 1,803 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax | (1,339 | ) | (1,339 | ) | — | (1,339 | ) | |||||||||||||||||||||||||||
Cash dividends paid | — | — | — | (929 | ) | — | — | (929 | ) | (5 | ) | (934 | ) | |||||||||||||||||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $20) | 2.4 | — | 136 | (2 | ) | — | — | 134 | — | 134 | ||||||||||||||||||||||||
Purchase of additional noncontrolling interest of consolidated subsidiaries | — | — | (14 | ) | — | — | — | (14 | ) | (24 | ) | (38 | ) | |||||||||||||||||||||
Repurchase of shares | (9.6 | ) | — | — | (650 | ) | — | — | (650 | ) | — | (650 | ) | |||||||||||||||||||||
Balance at December 31, 2014 | 467.9 | 5 | 11,605 | 7,078 | (2,899 | ) | (3 | ) | 15,786 | 53 | 15,839 | |||||||||||||||||||||||
Net income | — | — | — | 1,979 | — | — | 1,979 | 2 | 1,981 | |||||||||||||||||||||||||
Other comprehensive loss, net of tax | (964 | ) | (964 | ) | — | (964 | ) | |||||||||||||||||||||||||||
Cash dividends paid | — | — | — | (1,026 | ) | — | — | (1,026 | ) | (9 | ) | (1,035 | ) | |||||||||||||||||||||
Issuance of shares under equity-based compensation plans - net (net of income tax benefit of $1) | 2.2 | — | 99 | (3 | ) | — | — | 96 | — | 96 | ||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | (3 | ) | — | — | — | (3 | ) | (1 | ) | (4 | ) | |||||||||||||||||||||
Repurchase of shares | (11.3 | ) | — | — | (682 | ) | — | — | (682 | ) | — | (682 | ) | |||||||||||||||||||||
Balance at December 31, 2015 | 458.8 | $ | 5 | $ | 11,701 | $ | 7,346 | $ | (3,863 | ) | $ | (3 | ) | $ | 15,186 | $ | 45 | $ | 15,231 |
Note 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Note 2. | ACQUISITIONS AND SALES OF BUSINESSES |
Note 3. | ACQUISITION INTEGRATION CHARGES |
2015 | 2014 | 2013 | |||||||||
Acquisition integration charges | |||||||||||
Electrical Products | $ | 25 | $ | 66 | $ | 44 | |||||
Electrical Systems and Services | 15 | 51 | 37 | ||||||||
Hydraulics | 2 | 12 | 36 | ||||||||
Total business segments | 42 | 129 | 117 | ||||||||
Corporate | 5 | 25 | 37 | ||||||||
Total acquisition integration charges | 47 | 154 | 154 | ||||||||
Transaction costs | |||||||||||
Corporate | — | — | 8 | ||||||||
Financing fees | — | — | 1 | ||||||||
Total transaction costs | — | — | 9 | ||||||||
Total acquisition integration charges and transaction costs before income taxes | $ | 47 | $ | 154 | $ | 163 | |||||
Total after income taxes | $ | 31 | $ | 102 | $ | 110 | |||||
Per ordinary share - diluted | $ | 0.07 | $ | 0.21 | $ | 0.23 |
Note 4. | RESTRUCTURING CHARGES |
2015 | ||||
Electrical Products | $ | 12 | ||
Electrical Systems & Services | 29 | |||
Hydraulics | 31 | |||
Aerospace | 5 | |||
Vehicle | 34 | |||
Corporate | 18 | |||
Total | $ | 129 |
Workforce reductions | Plant closing and other | Total | ||||||||||
Balance at December 31, 2014 | $ | — | $ | — | $ | — | ||||||
Liability recognized | 112 | 17 | 129 | |||||||||
Payments | (59 | ) | (3 | ) | (62 | ) | ||||||
Other adjustments | 1 | (14 | ) | (13 | ) | |||||||
Balance at December 31, 2015 | $ | 54 | $ | — | $ | 54 |
Note 5. | GOODWILL AND OTHER INTANGIBLE ASSETS |
Electrical Products | Electrical Systems and Services | Hydraulics | Aerospace | Vehicle | Total | ||||||||||||||||||
December 31, 2013 | $ | 7,189 | $ | 4,517 | $ | 1,385 | $ | 1,048 | $ | 356 | $ | 14,495 | |||||||||||
Goodwill written off from sale of businesses | — | — | — | (78 | ) | — | (78 | ) | |||||||||||||||
Translation | (249 | ) | (203 | ) | (58 | ) | (8 | ) | (6 | ) | (524 | ) | |||||||||||
December 31, 2014 | 6,940 | 4,314 | 1,327 | 962 | 350 | 13,893 | |||||||||||||||||
Additions | 31 | 20 | — | — | — | 51 | |||||||||||||||||
Reclassifications | (106 | ) | 106 | — | — | — | — | ||||||||||||||||
Translation | (223 | ) | (161 | ) | (68 | ) | (6 | ) | (7 | ) | (465 | ) | |||||||||||
December 31, 2015 | $ | 6,642 | $ | 4,279 | $ | 1,259 | $ | 956 | $ | 343 | $ | 13,479 |
2015 | 2014 | ||||||||||||||
Historical cost | Accumulated amortization | Historical cost | Accumulated amortization | ||||||||||||
Intangible assets not subject to amortization | |||||||||||||||
Trademarks | $ | 1,661 | $ | 1,844 | |||||||||||
Intangible assets subject to amortization | |||||||||||||||
Customer relationships | $ | 3,544 | $ | 1,010 | $ | 3,674 | $ | 834 | |||||||
Patents and technology | 1,447 | 511 | 1,494 | 440 | |||||||||||
Trademarks | 1,113 | 311 | 980 | 250 | |||||||||||
Other | 103 | 22 | 103 | 15 | |||||||||||
Total intangible assets subject to amortization | $ | 6,207 | $ | 1,854 | $ | 6,251 | $ | 1,539 |
2015 | $ | 401 | |
2016 | 394 | ||
2017 | 384 | ||
2018 | 364 | ||
2019 | 357 | ||
2020 | 352 |
2015 | 2014 | ||||||
5.45% debentures due 2015 | $ | — | $ | 300 | |||
4.65% notes due 2015 | — | 100 | |||||
0.95% senior notes due 2015 | — | 600 | |||||
2.375% debentures due 2016 | 240 | 240 | |||||
5.30% notes due 2017 ($150 converted to floating rate by interest rate swap) | 250 | 250 | |||||
6.10% debentures due 2017 | 289 | 289 | |||||
1.50% senior notes due 2017 ($750 converted to floating rate by interest rate swap) | 1,000 | 1,000 | |||||
5.60% notes due 2018 ($415 converted to floating rate by interest rate swap) | 450 | 450 | |||||
4.215% Japanese Yen notes due 2018 | 83 | 84 | |||||
6.95% notes due 2019 ($300 converted to floating rate by interest rate swap) | 300 | 300 | |||||
3.875% debentures due 2020 ($150 converted to floating rate by interest rate swap) | 239 | 239 | |||||
3.47% notes due 2021 ($275 converted to floating rate by interest rate swap) | 300 | 300 | |||||
8.10% debentures due 2022 | 100 | 100 | |||||
2.75% senior notes due 2022 ($1,350 converted to floating rate by interest rate swap) | 1,600 | 1,600 | |||||
3.68% notes due 2023 ($200 converted to floating rate by interest rate swap) | 300 | 300 | |||||
6.50% debentures due 2025 | 145 | 145 | |||||
7.65% debentures due 2029 ($50 converted to floating rate by interest rate swap) | 200 | 200 | |||||
4.00% senior notes due 2032 | 700 | 700 | |||||
5.45% debentures due 2034 ($25 converted to floating rate by interest rate swap) | 136 | 136 | |||||
5.80% notes due 2037 | 240 | 240 | |||||
4.15% senior notes due 2042 | 1,000 | 1,000 | |||||
5.25% to 8.875% notes (maturities ranging from 2018 to 2035, including $50 converted to floating rate by interest rate swap) | 239 | 239 | |||||
Other | 212 | 220 | |||||
Total long-term debt | 8,023 | 9,032 | |||||
Less current portion of long-term debt | (242 | ) | (1,008 | ) | |||
Long-term debt less current portion | $ | 7,781 | $ | 8,024 |
2016 | $ | 242 | |
2017 | 1,544 | ||
2018 | 576 | ||
2019 | 340 | ||
2020 | 241 |
2015 | $ | 271 | |
2014 | 296 | ||
2013 | 294 |
Note 7. | RETIREMENT BENEFITS PLANS |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Funded status | |||||||||||||||||||||||
Fair value of plan assets | $ | 2,934 | $ | 3,086 | $ | 1,472 | $ | 1,535 | $ | 93 | $ | 116 | |||||||||||
Benefit obligations | (3,829 | ) | (4,047 | ) | (2,175 | ) | (2,337 | ) | (575 | ) | (676 | ) | |||||||||||
Funded status | $ | (895 | ) | $ | (961 | ) | $ | (703 | ) | $ | (802 | ) | $ | (482 | ) | $ | (560 | ) | |||||
Amounts recognized in the Consolidated Balance Sheets | |||||||||||||||||||||||
Non-current assets | $ | 11 | $ | 14 | $ | 57 | $ | 77 | $ | — | $ | — | |||||||||||
Current liabilities | (57 | ) | (16 | ) | (23 | ) | (26 | ) | (42 | ) | (47 | ) | |||||||||||
Non-current liabilities | (849 | ) | (959 | ) | (737 | ) | (853 | ) | (440 | ) | (513 | ) | |||||||||||
Total | $ | (895 | ) | $ | (961 | ) | $ | (703 | ) | $ | (802 | ) | $ | (482 | ) | $ | (560 | ) | |||||
Amounts recognized in Accumulated other comprehensive loss (pretax) | |||||||||||||||||||||||
Net actuarial loss | $ | 1,322 | $ | 1,377 | $ | 644 | $ | 695 | $ | 95 | $ | 176 | |||||||||||
Prior service cost (credit) | 5 | 5 | 9 | 11 | (74 | ) | (86 | ) | |||||||||||||||
Total | $ | 1,327 | $ | 1,382 | $ | 653 | $ | 706 | $ | 21 | $ | 90 |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Balance at January 1 | $ | 4,047 | $ | 3,625 | $ | 2,337 | $ | 2,127 | $ | 676 | $ | 867 | |||||||||||
Service cost | 123 | 117 | 71 | 66 | 6 | 13 | |||||||||||||||||
Interest cost | 156 | 162 | 72 | 85 | 24 | 32 | |||||||||||||||||
Actuarial (gain) loss | (179 | ) | 470 | (23 | ) | 355 | (66 | ) | (36 | ) | |||||||||||||
Gross benefits paid | (318 | ) | (329 | ) | (100 | ) | (106 | ) | (86 | ) | (91 | ) | |||||||||||
Currency translation | — | — | (182 | ) | (190 | ) | (8 | ) | (4 | ) | |||||||||||||
Plan amendments | — | 2 | — | — | (1 | ) | (84 | ) | |||||||||||||||
Other | — | — | — | — | 30 | (21 | ) | ||||||||||||||||
Balance at December 31 | $ | 3,829 | $ | 4,047 | $ | 2,175 | $ | 2,337 | $ | 575 | $ | 676 | |||||||||||
Accumulated benefit obligation | $ | 3,672 | $ | 3,894 | $ | 2,049 | $ | 2,181 |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Balance at January 1 | $ | 3,086 | $ | 2,940 | $ | 1,535 | $ | 1,432 | $ | 116 | $ | 138 | |||||||||||
Actual return on plan assets | (55 | ) | 226 | 29 | 191 | 1 | 4 | ||||||||||||||||
Employer contributions | 221 | 248 | 109 | 114 | 31 | 40 | |||||||||||||||||
Gross benefits paid | (318 | ) | (329 | ) | (100 | ) | (106 | ) | (86 | ) | (91 | ) | |||||||||||
Currency translation | — | — | (101 | ) | (96 | ) | — | — | |||||||||||||||
Other | — | 1 | — | — | 31 | 25 | |||||||||||||||||
Balance at December 31 | $ | 2,934 | $ | 3,086 | $ | 1,472 | $ | 1,535 | $ | 93 | $ | 116 |
United States pension liabilities | Non-United States pension liabilities | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Projected benefit obligation | $ | 3,376 | $ | 3,557 | $ | 1,387 | $ | 1,524 | |||||||
Accumulated benefit obligation | 3,219 | 3,403 | 1,328 | 1,446 | |||||||||||
Fair value of plan assets | 2,470 | 2,581 | 650 | 673 |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Balance at January 1 | $ | 1,382 | $ | 1,054 | $ | 706 | $ | 528 | $ | 90 | $ | 184 | |||||||||||
Prior service cost arising during the year | — | 2 | — | — | (1 | ) | (84 | ) | |||||||||||||||
Net loss (gain) arising during the year | 138 | 490 | 47 | 262 | (62 | ) | (34 | ) | |||||||||||||||
Currency translation | — | — | (58 | ) | (55 | ) | (4 | ) | (1 | ) | |||||||||||||
Less amounts included in expense during the year | (193 | ) | (164 | ) | (42 | ) | (29 | ) | (2 | ) | 25 | ||||||||||||
Net change for the year | (55 | ) | 328 | (53 | ) | 178 | (69 | ) | (94 | ) | |||||||||||||
Balance at December 31 | $ | 1,327 | $ | 1,382 | $ | 653 | $ | 706 | $ | 21 | $ | 90 |
United States pension benefit expense | Non-United States pension benefit expense | Other postretirement benefits expense | |||||||||||||||||||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||||
Service cost | $ | 123 | $ | 117 | $ | 128 | $ | 71 | $ | 66 | $ | 62 | $ | 6 | $ | 13 | $ | 20 | |||||||||||||||||
Interest cost | 156 | 162 | 147 | 72 | 85 | 80 | 24 | 32 | 35 | ||||||||||||||||||||||||||
Expected return on plan assets | (262 | ) | (246 | ) | (226 | ) | (99 | ) | (98 | ) | (85 | ) | (5 | ) | (6 | ) | (6 | ) | |||||||||||||||||
Amortization | 119 | 93 | 133 | 40 | 27 | 27 | 2 | 6 | 14 | ||||||||||||||||||||||||||
136 | 126 | 182 | 84 | 80 | 84 | 27 | 45 | 63 | |||||||||||||||||||||||||||
Settlements, curtailments and other | 74 | 71 | 53 | 2 | 2 | 2 | — | (31 | ) | — | |||||||||||||||||||||||||
Total expense | $ | 210 | $ | 197 | $ | 235 | $ | 86 | $ | 82 | $ | 86 | $ | 27 | $ | 14 | $ | 63 |
United States pension liabilities | Non-United States pension liabilities | Other postretirement liabilities | |||||||||
Actuarial loss | $ | 165 | $ | 34 | $ | 5 | |||||
Prior service cost (credit) | 1 | 1 | (14 | ) | |||||||
Total | $ | 166 | $ | 35 | $ | (9 | ) |
United States pension plans | Non-United States pension plans | ||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||
Assumptions used to determine benefit obligation at year-end | |||||||||||||||||
Discount rate | 4.22 | % | 3.97 | % | 4.67 | % | 3.46 | % | 3.33 | % | 4.20 | % | |||||
Rate of compensation increase | 3.18 | % | 3.16 | % | 3.16 | % | 3.12 | % | 3.13 | % | 3.12 | % | |||||
Assumptions used to determine expense | |||||||||||||||||
Discount rate | 3.97 | % | 4.67 | % | 3.97 | % | 3.33 | % | 4.20 | % | 4.17 | % | |||||
Expected long-term return on plan assets | 8.50 | % | 8.40 | % | 8.45 | % | 6.92 | % | 7.00 | % | 6.92 | % | |||||
Rate of compensation increase | 3.16 | % | 3.16 | % | 3.16 | % | 3.13 | % | 3.12 | % | 3.09 | % |
Other postretirement benefits plans | ||||||||
2015 | 2014 | 2013 | ||||||
Assumptions used to determine benefit obligation at year-end | ||||||||
Discount rate | 4.04 | % | 3.79 | % | 4.48 | % | ||
Health care cost trend rate assumed for next year | 7.10 | % | 6.31 | % | 6.64 | % | ||
Ultimate health care cost trend rate | 4.75 | % | 4.77 | % | 4.77 | % | ||
Year ultimate health care cost trend rate is achieved | 2025 | 2024 | 2023 | |||||
Assumptions used to determine expense | ||||||||
Discount rate | 3.79 | % | 4.48 | % | 3.79 | % | ||
Initial health care cost trend rate | 6.31 | % | 6.64 | % | 6.96 | % | ||
Ultimate health care cost trend rate | 4.77 | % | 4.77 | % | 4.53 | % | ||
Year ultimate health care cost trend rate is achieved | 2024 | 2023 | 2022 |
1% increase | 1% decrease | ||||||
Effect on total service and interest cost | $ | 1 | $ | (1 | ) | ||
Effect on other postretirement liabilities | 17 | (16 | ) |
2016 | 2015 | 2014 | 2013 | ||||||||||||
United States plans | $ | 59 | $ | 221 | $ | 248 | $ | 196 | |||||||
Non-United States plans | 103 | 109 | 114 | 145 | |||||||||||
Total contributions | $ | 162 | $ | 330 | $ | 362 | $ | 341 |
Estimated United States pension payments | Estimated non-United States pension payments | Estimated other postretirement benefit payments | |||||||||||||
Gross | Medicare prescription drug subsidy | ||||||||||||||
2016 | $ | 334 | $ | 81 | $ | 65 | $ | (5 | ) | ||||||
2017 | 270 | 82 | 61 | (4 | ) | ||||||||||
2018 | 280 | 85 | 57 | (4 | ) | ||||||||||
2019 | 287 | 86 | 52 | (3 | ) | ||||||||||
2020 | 292 | 89 | 48 | (2 | ) | ||||||||||
2021 - 2025 | 1,515 | 491 | 199 | (10 | ) |
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. |
Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | ||||||||||||
2015 | |||||||||||||||
Common collective trusts | |||||||||||||||
Non-United States equity and global equities | $ | 1,347 | $ | — | $ | 1,347 | $ | — | |||||||
United States equity | 953 | — | 953 | — | |||||||||||
Fixed income | 514 | — | 514 | — | |||||||||||
Exchange traded funds | 158 | — | 158 | — | |||||||||||
Fixed income securities | 357 | — | 357 | — | |||||||||||
United States treasuries | 105 | 105 | — | — | |||||||||||
Bank loans | 136 | — | 136 | — | |||||||||||
Real estate securities | 251 | 244 | — | 7 | |||||||||||
Equity securities | 98 | 98 | — | — | |||||||||||
Cash equivalents | 246 | 17 | 229 | — | |||||||||||
Hedge funds | 92 | — | — | 92 | |||||||||||
Exchange traded funds | 49 | 49 | — | — | |||||||||||
Other | 100 | — | 14 | 86 | |||||||||||
Total pension plan assets | $ | 4,406 | $ | 513 | $ | 3,708 | $ | 185 |
Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | ||||||||||||
2014 | |||||||||||||||
Common collective trusts | |||||||||||||||
Non-United States equity and global equities | $ | 1,458 | $ | — | $ | 1,458 | $ | — | |||||||
United States equity | 1,005 | — | 1,005 | — | |||||||||||
Fixed income | 646 | — | 646 | — | |||||||||||
Exchange traded funds | 138 | — | 138 | — | |||||||||||
Fixed income securities | 398 | — | 398 | — | |||||||||||
United States treasuries | 106 | 106 | — | — | |||||||||||
Bank loans | 128 | — | 128 | — | |||||||||||
Real estate securities | 263 | 257 | — | 6 | |||||||||||
Equity securities | 92 | 92 | — | — | |||||||||||
Cash equivalents | 218 | 8 | 210 | — | |||||||||||
Hedge funds | 54 | — | — | 54 | |||||||||||
Exchange traded funds | 50 | 50 | — | — | |||||||||||
Other | 65 | — | 5 | 60 | |||||||||||
Total pension plan assets | $ | 4,621 | $ | 513 | $ | 3,988 | $ | 120 |
Real Estate | Hedge Funds | Other | Total | ||||||||||||
Balance at December 31, 2013 | $ | 6 | $ | — | $ | 94 | $ | 100 | |||||||
Actual return on plan assets: | |||||||||||||||
Gains (losses) relating to assets still held at year-end | — | 1 | (3 | ) | (2 | ) | |||||||||
Purchases, sales, settlements - net | — | 53 | — | 53 | |||||||||||
Transfers into or out of Level 3 | — | — | (31 | ) | (31 | ) | |||||||||
Balance at December 31, 2014 | 6 | 54 | 60 | 120 | |||||||||||
Actual return on plan assets: | |||||||||||||||
Gains (losses) relating to assets still held at year-end | 1 | (5 | ) | (2 | ) | (6 | ) | ||||||||
Purchases, sales, settlements - net | — | 43 | 37 | 80 | |||||||||||
Transfers into or out of Level 3 | — | — | (9 | ) | (9 | ) | |||||||||
Balance at December 31, 2015 | $ | 7 | $ | 92 | $ | 86 | $ | 185 |
Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | ||||||||||||
2015 | |||||||||||||||
Common collective trusts | |||||||||||||||
Global equities | $ | 44 | $ | — | $ | 44 | $ | — | |||||||
Fixed income securities | 18 | — | 18 | — | |||||||||||
United States treasuries | 20 | 20 | — | — | |||||||||||
Cash equivalents | 11 | 11 | — | — | |||||||||||
Total other postretirement benefits plan assets | $ | 93 | $ | 31 | $ | 62 | $ | — |
2014 | |||||||||||||||
Common collective trusts | |||||||||||||||
Global equities | $ | 54 | $ | — | $ | 54 | $ | — | |||||||
Fixed income securities | 24 | — | 24 | — | |||||||||||
United States treasuries | 37 | 37 | — | — | |||||||||||
Cash equivalents | 1 | 1 | — | — | |||||||||||
Total other postretirement benefits plan assets | $ | 116 | $ | 38 | $ | 78 | $ | — |
2015 | $ | 137 | |
2014 | 141 | ||
2013 | 121 |
Note 8. | COMMITMENTS AND CONTINGENCIES |
2015 | 2014 | 2013 | |||||||||
Balance at January 1 | $ | 213 | $ | 189 | $ | 185 | |||||
Provision | 104 | 125 | 107 | ||||||||
Settled | (114 | ) | (120 | ) | (99 | ) | |||||
Other | (8 | ) | 19 | (4 | ) | ||||||
Balance at December 31 | $ | 195 | $ | 213 | $ | 189 |
2016 | $ | 151 | |
2017 | 116 | ||
2018 | 87 | ||
2019 | 49 | ||
2020 | 32 | ||
Thereafter | 55 | ||
Total noncancelable lease commitments | $ | 490 |
2015 | $ | 225 | |
2014 | 244 | ||
2013 | 241 |
Note 9. | INCOME TAXES |
Income (loss) before income taxes | |||||||||||
2015 | 2014 | 2013 | |||||||||
Ireland | $ | (608 | ) | $ | (332 | ) | $ | 184 | |||
Foreign | 2,753 | 2,093 | 1,700 | ||||||||
Total income before income taxes | $ | 2,145 | $ | 1,761 | $ | 1,884 |
Income tax expense (benefit) | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current | |||||||||||
Ireland | $ | 8 | $ | (13 | ) | $ | 17 | ||||
United States | |||||||||||
Federal | 88 | 87 | 89 | ||||||||
State and local | 22 | 41 | 7 | ||||||||
Foreign - other | 240 | 239 | 244 | ||||||||
Total current income tax expense | 358 | 354 | 357 | ||||||||
Deferred | |||||||||||
Ireland | 1 | 2 | — | ||||||||
United States | |||||||||||
Federal | (65 | ) | (224 | ) | (295 | ) | |||||
State and local | (6 | ) | (49 | ) | (23 | ) | |||||
Foreign - other | (124 | ) | (125 | ) | (28 | ) | |||||
Total deferred income tax benefit | (194 | ) | (396 | ) | (346 | ) | |||||
Total income tax expense (benefit) | $ | 164 | $ | (42 | ) | $ | 11 |
2015 | 2014 | 2013 | ||||||
Income taxes at the applicable statutory rate | 25.0 | % | 25.0 | % | 25.0 | % | ||
Ireland operations | ||||||||
Ireland tax on trading income | (0.4 | )% | (0.1 | )% | (1.4 | )% | ||
Nondeductible interest expense | 7.9 | % | 4.8 | % | — | % | ||
United States operations | ||||||||
United States (loss) income | (0.4 | )% | (2.8 | )% | (2.8 | )% | ||
Nondeductible goodwill - Aerospace divestitures | — | % | 1.4 | % | — | % | ||
Credit for research activities | (0.8 | )% | (1.0 | )% | (2.0 | )% | ||
Other - net | 5.4 | % | 1.5 | % | 1.3 | % | ||
Other foreign operations | ||||||||
United States foreign tax credit | (0.8 | )% | (1.1 | )% | (1.8 | )% | ||
Other foreign operations (earnings taxed at other than the applicable statutory tax rate) | (25.1 | )% | (24.8 | )% | (17.6 | )% | ||
Other foreign operations - other items | (0.5 | )% | (1.0 | )% | 0.2 | % | ||
Worldwide operations | ||||||||
Adjustments to tax liabilities | (1.4 | )% | (1.7 | )% | (1.1 | )% | ||
Adjustments to valuation allowances | (1.2 | )% | (2.6 | )% | 0.8 | % | ||
Effective income tax expense (benefit) rate | 7.7 | % | (2.4 | )% | 0.6 | % |
2015 | $ | 302 | |
2014 | 258 | ||
2013 | 272 |
2015 | 2014 | |||||||||||
Noncurrent assets and liabilities | Current assets and liabilities | Noncurrent assets and liabilities | ||||||||||
Accruals and other adjustments | ||||||||||||
Employee benefits | $ | 808 | $ | 148 | $ | 773 | ||||||
Depreciation and amortization | (1,824 | ) | — | (2,010 | ) | |||||||
Other accruals and adjustments | 717 | 476 | 282 | |||||||||
United States federal income tax loss carryforwards | 20 | — | 58 | |||||||||
United States federal income tax credit carryforwards | 183 | — | 150 | |||||||||
United States state and local tax loss carryforwards and tax credit carryforwards | 63 | — | 76 | |||||||||
Other foreign tax loss carryforwards | 2,265 | — | 2,112 | |||||||||
Other foreign income tax credit carryforwards | 70 | — | 49 | |||||||||
Valuation allowance for income tax loss and income tax credit carryforwards | (2,315 | ) | (24 | ) | (2,134 | ) | ||||||
Other valuation allowances | (15 | ) | (7 | ) | (29 | ) | ||||||
Total deferred income taxes | $ | (28 | ) | $ | 593 | $ | (673 | ) |
2016 through 2020 | 2021 through 2025 | 2026 through 2030 | 2031 through 2035 | 2036 through 2040 | Not subject to expiration | Valuation allowance | |||||||||||||||||||||
United States federal income tax loss carryforwards | $ | — | $ | — | $ | 35 | $ | 415 | $ | — | $ | — | $ | — | |||||||||||||
United States federal deferred income tax assets for income tax loss carryforwards | — | — | 12 | 107 | — | — | (12 | ) | |||||||||||||||||||
United States federal deferred income tax assets for income tax loss carryforwards after ASU 2013-11 | — | — | 12 | 8 | — | — | (12 | ) | |||||||||||||||||||
United States federal income tax credit carryforwards | 28 | 69 | 27 | 108 | 21 | 30 | (66 | ) | |||||||||||||||||||
United States federal income tax credit carryforwards after ASU 2013-11 | 28 | 69 | 25 | 40 | 21 | — | (66 | ) |
2016 through 2020 | 2021 through 2025 | 2026 through 2030 | 2031 through 2035 | 2036 through 2040 | Not subject to expiration | Valuation allowance | |||||||||||||||||||||
United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect | $ | 7 | $ | 17 | $ | 12 | $ | 9 | $ | — | $ | — | $ | (18 | ) | ||||||||||||
United States state and local deferred income tax assets for income tax loss carryforwards - net of federal tax effect after ASU 2013-11 | — | 12 | 12 | 9 | — | — | (18 | ) | |||||||||||||||||||
United States state and local income tax credit carryforwards - net of federal tax effect | 10 | 10 | 6 | 3 | 5 | — | (16 | ) | |||||||||||||||||||
United States state and local income tax credit carryforwards - net of federal tax effect after ASU 2013-11 | 8 | 9 | 6 | 2 | 5 | — | (16 | ) |
2016 through 2020 | 2021 through 2025 | 2026 through 2030 | 2031 through 2035 | Not subject to expiration | Valuation allowance | ||||||||||||||||||
Non-United States income tax loss carryforwards | $ | 125 | $ | 146 | $ | 3 | $ | — | $ | 10,092 | $ | — | |||||||||||
Non-United States deferred income tax assets for income tax loss carryforwards | 33 | 35 | 1 | — | 2,196 | (2,171 | ) | ||||||||||||||||
Non-United States income tax credit carryforwards | 7 | 15 | 16 | — | 32 | (32 | ) |
2015 | 2014 | 2013 | |||||||||
Balance at January 1 | $ | 493 | $ | 479 | $ | 444 | |||||
Increases and decreases as a result of positions taken during prior years | |||||||||||
Transfers from valuation allowances | — | (3 | ) | 13 | |||||||
Other increases, including currency translation | 34 | 37 | 7 | ||||||||
Other decreases, including currency translation | (34 | ) | (3 | ) | (7 | ) | |||||
Balances related to acquired businesses | (1 | ) | (3 | ) | 2 | ||||||
Increases as a result of positions taken during the current year | 109 | 65 | 35 | ||||||||
Decreases relating to settlements with tax authorities | — | (51 | ) | (6 | ) | ||||||
Decreases as a result of a lapse of the applicable statute of limitations | (17 | ) | (28 | ) | (9 | ) | |||||
Balance at December 31 | $ | 584 | $ | 493 | $ | 479 |
Note 10. | EATON SHAREHOLDERS' EQUITY |
2015 | 2014 | 2013 | |||||||||||||||||||||
Pre-tax | After-tax | Pre-tax | After-tax | Pre-tax | After-tax | ||||||||||||||||||
Currency translation and related hedging instruments | $ | (1,080 | ) | $ | (1,078 | ) | $ | (1,014 | ) | $ | (1,019 | ) | $ | (30 | ) | $ | (28 | ) | |||||
Pensions and other postretirement benefits | |||||||||||||||||||||||
Prior service credit (cost) arising during the year | 1 | 1 | 82 | 51 | (6 | ) | (4 | ) | |||||||||||||||
Net (loss) gain arising during the year | (123 | ) | (89 | ) | (718 | ) | (519 | ) | 456 | 277 | |||||||||||||
Currency translation | 62 | 46 | 56 | 47 | (5 | ) | (4 | ) | |||||||||||||||
Other | — | (3 | ) | — | (4 | ) | 2 | 16 | |||||||||||||||
Amortization of actuarial loss and prior service cost reclassified to earnings | 237 | 156 | 168 | 110 | 229 | 144 | |||||||||||||||||
177 | 111 | (412 | ) | (315 | ) | 676 | 429 | ||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | 20 | 13 | (3 | ) | (2 | ) | 6 | 3 | |||||||||||||||
Changes in cash flow hedges reclassified to earnings | (16 | ) | (10 | ) | (5 | ) | (3 | ) | — | — | |||||||||||||
Cash flow hedges, net of reclassification adjustments | 4 | 3 | (8 | ) | (5 | ) | 6 | 3 | |||||||||||||||
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | $ | (899 | ) | $ | (964 | ) | $ | (1,434 | ) | $ | (1,339 | ) | $ | 652 | $ | 404 |
Currency translation and related hedging instruments | Pensions and other postretirement benefits | Cash flow hedges | Total | ||||||||||||
Balance at December 31, 2014 | $ | (1,414 | ) | $ | (1,485 | ) | $ | — | $ | (2,899 | ) | ||||
Other comprehensive (loss) income before reclassifications | (1,078 | ) | (45 | ) | 13 | (1,110 | ) | ||||||||
Amounts reclassified from Accumulated other comprehensive loss (income) | — | 156 | (10 | ) | 146 | ||||||||||
Net current-period Other comprehensive (loss) income | (1,078 | ) | 111 | 3 | (964 | ) | |||||||||
Balance at December 31, 2015 | $ | (2,492 | ) | $ | (1,374 | ) | $ | 3 | $ | (3,863 | ) |
December 31, 2015 | Consolidated Statements of Income classification | |||||
Amortization of defined benefit pension and other postretirement benefits items | ||||||
Actuarial loss and prior service cost | $ | (237 | ) | 1 | ||
Tax benefit | 81 | |||||
Total, net of tax | (156 | ) | ||||
Gains and (losses) on cash flow hedges | ||||||
Currency exchange contracts | 16 | Cost of products sold | ||||
Tax expense | (6 | ) | ||||
Total, net of tax | 10 | |||||
Total reclassifications for the period | $ | (146 | ) |
(Shares in millions) | 2015 | 2014 | 2013 | ||||||||
Net income attributable to Eaton ordinary shareholders | $ | 1,979 | $ | 1,793 | $ | 1,861 | |||||
Weighted-average number of ordinary shares outstanding - diluted | 467.1 | 476.8 | 476.7 | ||||||||
Less dilutive effect of equity-based compensation | 1.6 | 2.7 | 3.2 | ||||||||
Weighted-average number of ordinary shares outstanding - basic | 465.5 | 474.1 | 473.5 | ||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||
Diluted | $ | 4.23 | $ | 3.76 | $ | 3.90 | |||||
Basic | 4.25 | 3.78 | 3.93 |
(Restricted stock units and awards in millions) | Number of restricted stock units and awards | Weighted-average fair value per unit and award | ||||
Non-vested at January 1 | 2.8 | $ | 60.11 | |||
Granted | 1.1 | 67.46 | ||||
Vested | (1.6 | ) | 57.50 | |||
Forfeited | (0.2 | ) | 66.94 | |||
Non-vested at December 31 | 2.1 | $ | 65.06 |
2015 | 2014 | 2013 | |||||||||
Pretax expense for RSUs and RSAs | $ | 68 | $ | 81 | $ | 69 | |||||
After-tax expense for RSUs and RSAs | 44 | 53 | 45 | ||||||||
Fair value of vested RSUs and RSAs | 110 | 105 | 82 |
(Performance share units in millions) | Number of performance share units | Weighted-average fair value per unit | |||||
Non-vested at January 1 | — | $ | — | ||||
Granted | 0.9 | 71.72 | |||||
Vested | — | — | |||||
Forfeited | (0.1 | ) | 71.72 | ||||
Non-vested at December 31 | 0.8 | $ | 71.72 |
2015 | ||||
Pretax expense for PSUs | $ | 2 | ||
After-tax expense for PSUs | 1 |
2015 | 2014 | 2013 | |||||||||
Expected volatility | 29 | % | 34 | % | 36 | % | |||||
Expected option life in years | 5.5 | 5.5 | 5.5 | ||||||||
Expected dividend yield | 2.6 | % | 2.4 | % | 2.0 | % | |||||
Risk-free interest rate | 1.6 to 1.5% | 1.7 to 1.5% | 1.5 to 0.8% | ||||||||
Weighted-average fair value of stock options granted | $ | 15.25 | $ | 19.46 | $ | 17.49 |
(Options in millions) | Weighted-average exercise price per option | Options | Weighted-average remaining contractual life in years | Aggregate intrinsic value | ||||||||
Outstanding at January 1, 2015 | $ | 47.30 | 7.0 | |||||||||
Granted | 71.66 | 0.8 | ||||||||||
Exercised | 37.91 | (1.4 | ) | |||||||||
Forfeited and canceled | 71.18 | (0.2 | ) | |||||||||
Outstanding at December 31, 2015 | $ | 51.94 | 6.2 | 4.3 | $ | 36.2 | ||||||
Exercisable at December 31, 2015 | $ | 47.23 | 5.0 | 3.3 | $ | 36.2 | ||||||
Reserved for future grants at December 31, 2015 | 25.5 |
2015 | 2014 | 2013 | |||||||||
Pretax expense for stock options | $ | 12 | $ | 12 | $ | 11 | |||||
After-tax expense for stock options | 8 | 8 | 7 | ||||||||
Proceeds from stock options exercised | 52 | 54 | 121 | ||||||||
Income tax benefit related to stock options exercised | |||||||||||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | 4 | 4 | 3 | ||||||||
Excess tax benefit classified in financing activities in the Consolidated Statements of Cash Flows | 1 | 15 | 22 | ||||||||
Intrinsic value of stock options exercised | 44 | 55 | 102 | ||||||||
Total fair value of stock options vested | $ | 12 | $ | 12 | $ | 11 | |||||
Stock options exercised, in millions of options | 1.4 | 1.5 | 3.6 |
Note 12. | FAIR VALUE MEASUREMENTS |
Total | Quoted prices in active markets for identical assets (Level 1) | Other observable inputs (Level 2) | Unobservable inputs (Level 3) | ||||||||||||
2015 | |||||||||||||||
Cash | $ | 268 | $ | 268 | $ | — | $ | — | |||||||
Short-term investments | 177 | 177 | — | — | |||||||||||
Net derivative contracts | 86 | — | 86 | — | |||||||||||
Long-term debt converted to floating interest rates by interest rate swaps - net | (94 | ) | — | (94 | ) | — | |||||||||
2014 | |||||||||||||||
Cash | $ | 781 | $ | 781 | $ | — | $ | — | |||||||
Short-term investments | 245 | 245 | — | — | |||||||||||
Net derivative contracts | 70 | — | 70 | — | |||||||||||
Long-term debt converted to floating interest rates by interest rate swaps - net | (74 | ) | — | (74 | ) | — |
2015 | 2014 | ||||||
Time deposits, certificates of deposit and demand deposits with banks | $ | 122 | $ | 113 | |||
Money market investments | 55 | 131 | |||||
Other | — | 1 | |||||
Total short-term investments | $ | 177 | $ | 245 |
Note 13. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
• | 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 effective portion of the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive loss 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 effective portion of the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive loss 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. |
Notional amount | Fixed interest rate received | Floating interest rate paid | Basis for contracted floating interest rate paid | ||||
150 | 5.30% | 4.59% | 1 month LIBOR + 4.26% | ||||
750 | 1.50% | 0.71% | 1 month LIBOR + 0.46% | ||||
415 | 5.60% | 3.78% | 6 month LIBOR + 3.18% | ||||
300 | 6.95% | 5.66% | 3 month LIBOR + 5.07% | ||||
25 | 8.875% | 4.59% | 6 month LIBOR + 3.84% | ||||
150 | 3.875% | 2.45% | 1 month LIBOR + 2.12% | ||||
275 | 3.47% | 2.07% | 1 month LIBOR + 1.74% | ||||
1,350 | 2.75% | 0.80% | 1 month LIBOR + 0.56% | ||||
200 | 3.68% | 1.40% | 1 month LIBOR + 1.07% | ||||
25 | 7.625% | 3.01% | 6 month LIBOR + 2.48% | ||||
50 | 7.65% | 3.17% | 6 month LIBOR + 2.57% | ||||
25 | 5.45% | 0.80% | 6 month LIBOR + 0.28% |
Notional amount | Fixed interest rate paid | Floating interest rate received | Basis for contracted floating interest rate received | ||||
50 | 2.52% | —% | 3 month LIBOR + 0.00% |
Notional amount | Other current assets | Other noncurrent assets | Other current liabilities | Other noncurrent liabilities | Type of hedge | Term | |||||||||||||||||
December 31, 2015 | |||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||
Fixed-to-floating interest rate swaps | $ | 3,715 | $ | — | $ | 96 | $ | — | $ | 2 | Fair value | 2 to 19 years | |||||||||||
Forward starting floating-to-fixed interest rate swaps | 50 | — | — | — | — | Cash flow | 12 years | ||||||||||||||||
Currency exchange contracts | 724 | 18 | 1 | 8 | 6 | Cash flow | 1 to 36 months | ||||||||||||||||
Commodity contracts | 1 | — | — | — | — | Cash flow | 1 to 12 months | ||||||||||||||||
Total | $ | 18 | $ | 97 | $ | 8 | $ | 8 | |||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||
Currency exchange contracts | $ | 4,198 | $ | 27 | $ | 40 | 1 to 12 months | ||||||||||||||||
Total | $ | 27 | $ | 40 |
December 31, 2014 | |||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||
Fixed-to-floating interest rate swaps | $ | 3,440 | $ | — | $ | 84 | $ | — | $ | 10 | Fair value | 2 to 19 years | |||||||||||
Currency exchange contracts | 432 | 8 | 1 | 5 | 3 | Cash flow | 1 to 36 months | ||||||||||||||||
Commodity contracts | 1 | — | — | — | — | Cash flow | 1 to 12 months | ||||||||||||||||
Total | $ | 8 | $ | 85 | $ | 5 | $ | 13 | |||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||
Currency exchange contracts | $ | 4,447 | $ | 47 | $ | 52 | 1 to 12 months | ||||||||||||||||
Total | $ | 47 | $ | 52 |
Gain (loss) recognized in other comprehensive (loss) income | Location of gain (loss) reclassified from Accumulated other comprehensive loss | Gain (loss) reclassified from Accumulated other comprehensive loss | |||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||
Floating-to-fixed interest rate swaps | $ | — | $ | — | Interest expense - net | $ | — | $ | (1 | ) | |||||||
Currency exchange contracts | 20 | (3 | ) | Cost of products sold | 16 | 6 | |||||||||||
Total | $ | 20 | $ | (3 | ) | $ | 16 | $ | 5 |
2015 | 2014 | ||||||
Derivatives designated as fair value hedges | |||||||
Fixed-to-floating interest rate swaps | $ | 20 | $ | 113 | |||
Related long-term debt converted to floating interest rates by interest rate swaps | (20 | ) | (113 | ) | |||
$ | — | $ | — |
Note 14. | ACCOUNTS RECEIVABLE AND INVENTORY |
2015 | 2014 | ||||||
Raw materials | $ | 885 | $ | 924 | |||
Work-in-process | 412 | 422 | |||||
Finished goods | 1,131 | 1,201 | |||||
Inventory at FIFO | 2,428 | 2,547 | |||||
Excess of FIFO over LIFO cost | (105 | ) | (119 | ) | |||
Total inventory | $ | 2,323 | $ | 2,428 |
Note 15. | BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION |
2015 | 2014 | 2013 | |||||||||
Net sales | |||||||||||
Electrical Products | $ | 6,976 | $ | 7,254 | $ | 7,026 | |||||
Electrical Systems and Services | 5,931 | 6,457 | 6,430 | ||||||||
Hydraulics | 2,459 | 2,975 | 2,981 | ||||||||
Aerospace | 1,807 | 1,860 | 1,774 | ||||||||
Vehicle | 3,682 | 4,006 | 3,835 | ||||||||
Total net sales | $ | 20,855 | $ | 22,552 | $ | 22,046 | |||||
Segment operating profit | |||||||||||
Electrical Products | $ | 1,156 | $ | 1,184 | $ | 1,090 | |||||
Electrical Systems and Services | 776 | 843 | 889 | ||||||||
Hydraulics | 246 | 367 | 355 | ||||||||
Aerospace | 310 | 273 | 252 | ||||||||
Vehicle | 645 | 645 | 592 | ||||||||
Total segment operating profit | 3,133 | 3,312 | 3,178 | ||||||||
Corporate | |||||||||||
Litigation settlements | — | (644 | ) | — | |||||||
Amortization of intangible assets | (406 | ) | (431 | ) | (437 | ) | |||||
Interest expense - net | (232 | ) | (227 | ) | (271 | ) | |||||
Pension and other postretirement benefits expense | (130 | ) | (138 | ) | (183 | ) | |||||
Inventory step-up adjustment | — | — | (34 | ) | |||||||
Other corporate expense - net | (220 | ) | (111 | ) | (369 | ) | |||||
Income before income taxes | 2,145 | 1,761 | 1,884 | ||||||||
Income tax expense (benefit) | 164 | (42 | ) | 11 | |||||||
Net income | 1,981 | 1,803 | 1,873 | ||||||||
Less net income for noncontrolling interests | (2 | ) | (10 | ) | (12 | ) | |||||
Net income attributable to Eaton ordinary shareholders | $ | 1,979 | $ | 1,793 | $ | 1,861 |
2015 | 2014 | 2013 | |||||||||
Electrical Products | $ | 25 | $ | 66 | $ | 44 | |||||
Electrical Systems and Services | 15 | 51 | 37 | ||||||||
Hydraulics | 2 | 12 | 36 | ||||||||
Total | $ | 42 | $ | 129 | $ | 117 |
2015 | 2014 | 2013 | |||||||||
Identifiable assets | |||||||||||
Electrical Products | $ | 2,538 | $ | 3,012 | $ | 3,204 | |||||
Electrical Systems and Services | 2,285 | 2,512 | 2,683 | ||||||||
Hydraulics | 1,138 | 1,315 | 1,362 | ||||||||
Aerospace | 841 | 832 | 852 | ||||||||
Vehicle | 1,579 | 1,668 | 1,716 | ||||||||
Total identifiable assets | 8,381 | 9,339 | 9,817 | ||||||||
Goodwill | 13,479 | 13,893 | 14,495 | ||||||||
Other intangible assets | 6,014 | 6,556 | 7,186 | ||||||||
Corporate | 3,157 | 3,741 | 3,993 | ||||||||
Total assets | $ | 31,031 | $ | 33,529 | $ | 35,491 | |||||
Capital expenditures for property, plant and equipment | |||||||||||
Electrical Products | $ | 137 | $ | 170 | $ | 152 | |||||
Electrical Systems and Services | 94 | 147 | 113 | ||||||||
Hydraulics | 61 | 79 | 80 | ||||||||
Aerospace | 33 | 28 | 29 | ||||||||
Vehicle | 119 | 160 | 161 | ||||||||
Total | 444 | 584 | 535 | ||||||||
Corporate | 62 | 48 | 79 | ||||||||
Total expenditures for property, plant and equipment | $ | 506 | $ | 632 | $ | 614 | |||||
Depreciation of property, plant and equipment | |||||||||||
Electrical Products | $ | 137 | $ | 148 | $ | 151 | |||||
Electrical Systems and Services | 82 | 90 | 86 | ||||||||
Hydraulics | 67 | 67 | 65 | ||||||||
Aerospace | 28 | 28 | 27 | ||||||||
Vehicle | 113 | 130 | 133 | ||||||||
Total | 427 | 463 | 462 | ||||||||
Corporate | 52 | 51 | 54 | ||||||||
Total depreciation of property, plant and equipment | $ | 479 | $ | 514 | $ | 516 |
2015 | 2014 | 2013 | |||||||||
Net sales | |||||||||||
United States | $ | 11,396 | $ | 11,701 | $ | 11,092 | |||||
Canada | 969 | 1,113 | 1,154 | ||||||||
Latin America | 1,726 | 1,988 | 2,113 | ||||||||
Europe | 4,379 | 5,074 | 5,112 | ||||||||
Asia Pacific | 2,385 | 2,676 | 2,575 | ||||||||
Total | $ | 20,855 | $ | 22,552 | $ | 22,046 | |||||
Long-lived assets | |||||||||||
United States | $ | 1,982 | $ | 1,988 | $ | 1,966 | |||||
Canada | 19 | 25 | 28 | ||||||||
Latin America | 243 | 306 | 331 | ||||||||
Europe | 734 | 799 | 856 | ||||||||
Asia Pacific | 587 | 632 | 652 | ||||||||
Total | $ | 3,565 | $ | 3,750 | $ | 3,833 |
Note 16. | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS |
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2015 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net sales | $ | — | $ | 6,925 | $ | 6,654 | $ | 12,538 | $ | (5,262 | ) | $ | 20,855 | ||||||||||
Cost of products sold | — | 5,508 | 5,033 | 8,984 | (5,233 | ) | 14,292 | ||||||||||||||||
Selling and administrative expense | 141 | 1,223 | 737 | 1,495 | — | 3,596 | |||||||||||||||||
Research and development expense | — | 266 | 196 | 163 | — | 625 | |||||||||||||||||
Interest expense (income) - net | — | 222 | 21 | (13 | ) | 2 | 232 | ||||||||||||||||
Other expense (income) - net | — | 27 | 2 | (64 | ) | — | (35 | ) | |||||||||||||||
Equity in loss (earnings) of subsidiaries, net of tax | (2,456 | ) | (793 | ) | (3,267 | ) | (666 | ) | 7,182 | — | |||||||||||||
Intercompany expense (income) - net | 336 | (452 | ) | 1,239 | (1,123 | ) | — | — | |||||||||||||||
Income (loss) before income taxes | 1,979 | 924 | 2,693 | 3,762 | (7,213 | ) | 2,145 | ||||||||||||||||
Income tax expense (benefit) | — | 103 | (73 | ) | 145 | (11 | ) | 164 | |||||||||||||||
Net income (loss) | 1,979 | 821 | 2,766 | 3,617 | (7,202 | ) | 1,981 | ||||||||||||||||
Less net loss (income) for noncontrolling interests | — | — | — | (3 | ) | 1 | (2 | ) | |||||||||||||||
Net income (loss) attributable to Eaton ordinary shareholders | $ | 1,979 | $ | 821 | $ | 2,766 | $ | 3,614 | $ | (7,201 | ) | $ | 1,979 | ||||||||||
Other comprehensive income (loss) | (964 | ) | 1 | (947 | ) | (1,170 | ) | 2,116 | (964 | ) | |||||||||||||
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | $ | 1,015 | $ | 822 | $ | 1,819 | $ | 2,444 | $ | (5,085 | ) | $ | 1,015 |
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2014 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net sales | $ | — | $ | 6,990 | $ | 6,885 | $ | 13,521 | $ | (4,844 | ) | $ | 22,552 | ||||||||||
Cost of products sold | — | 5,519 | 5,075 | 9,882 | (4,830 | ) | 15,646 | ||||||||||||||||
Selling and administrative expense | 171 | 1,246 | 743 | 1,650 | — | 3,810 | |||||||||||||||||
Litigation settlements | — | 644 | — | — | — | 644 | |||||||||||||||||
Research and development expense | — | 240 | 202 | 205 | — | 647 | |||||||||||||||||
Interest expense (income) - net | — | 225 | 25 | (29 | ) | 6 | 227 | ||||||||||||||||
Other expense (income) - net | — | (17 | ) | (81 | ) | (85 | ) | — | (183 | ) | |||||||||||||
Equity in loss (earnings) of subsidiaries, net of tax | (2,191 | ) | (663 | ) | (2,654 | ) | (292 | ) | 5,800 | — | |||||||||||||
Intercompany expense (income) - net | 227 | (263 | ) | 855 | (819 | ) | — | — | |||||||||||||||
Income (loss) before income taxes | 1,793 | 59 | 2,720 | 3,009 | (5,820 | ) | 1,761 | ||||||||||||||||
Income tax expense (benefit) | — | (100 | ) | 76 | (11 | ) | (7 | ) | (42 | ) | |||||||||||||
Net income (loss) | 1,793 | 159 | 2,644 | 3,020 | (5,813 | ) | 1,803 | ||||||||||||||||
Less net loss (income) for noncontrolling interests | — | — | — | (8 | ) | (2 | ) | (10 | ) | ||||||||||||||
Net income (loss) attributable to Eaton ordinary shareholders | $ | 1,793 | $ | 159 | $ | 2,644 | $ | 3,012 | $ | (5,815 | ) | $ | 1,793 | ||||||||||
Other comprehensive income (loss) | (1,339 | ) | (197 | ) | (1,368 | ) | (1,646 | ) | 3,211 | (1,339 | ) | ||||||||||||
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | $ | 454 | $ | (38 | ) | $ | 1,276 | $ | 1,366 | $ | (2,604 | ) | $ | 454 |
CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2013 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net sales | $ | — | $ | 6,695 | $ | 6,421 | $ | 13,579 | $ | (4,649 | ) | $ | 22,046 | ||||||||||
Cost of products sold | — | 5,227 | 4,784 | 10,010 | (4,652 | ) | 15,369 | ||||||||||||||||
Selling and administrative expense | 32 | 1,400 | 749 | 1,705 | — | 3,886 | |||||||||||||||||
Research and development expense | — | 255 | 200 | 189 | — | 644 | |||||||||||||||||
Interest expense (income) - net | — | 271 | 28 | (22 | ) | (6 | ) | 271 | |||||||||||||||
Other expense (income) - net | — | 8 | 4 | (20 | ) | — | (8 | ) | |||||||||||||||
Equity in loss (earnings) of subsidiaries, net of tax | (2,147 | ) | (657 | ) | (2,005 | ) | (277 | ) | 5,086 | — | |||||||||||||
Intercompany expense (income) - net | 254 | (155 | ) | (433 | ) | 334 | — | — | |||||||||||||||
Income (loss) before income taxes | 1,861 | 346 | 3,094 | 1,660 | (5,077 | ) | 1,884 | ||||||||||||||||
Income tax expense (benefit) | — | (108 | ) | (90 | ) | 207 | 2 | 11 | |||||||||||||||
Net income (loss) | 1,861 | 454 | 3,184 | 1,453 | (5,079 | ) | 1,873 | ||||||||||||||||
Less net loss (income) for noncontrolling interests | — | — | — | (9 | ) | (3 | ) | (12 | ) | ||||||||||||||
Net income (loss) attributable to Eaton ordinary shareholders | $ | 1,861 | $ | 454 | $ | 3,184 | $ | 1,444 | $ | (5,082 | ) | $ | 1,861 | ||||||||||
Other comprehensive income (loss) | 404 | 221 | 475 | 262 | (958 | ) | 404 | ||||||||||||||||
Total comprehensive income (loss) attributable to Eaton ordinary shareholders | $ | 2,265 | $ | 675 | $ | 3,659 | $ | 1,706 | $ | (6,040 | ) | $ | 2,265 |
CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2015 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Current assets | |||||||||||||||||||||||
Cash | $ | — | $ | 26 | $ | 7 | $ | 235 | $ | — | $ | 268 | |||||||||||
Short-term investments | — | — | 2 | 175 | — | 177 | |||||||||||||||||
Accounts receivable - net | — | 512 | 1,030 | 1,937 | — | 3,479 | |||||||||||||||||
Intercompany accounts receivable | 1 | 842 | 3,888 | 2,928 | (7,659 | ) | — | ||||||||||||||||
Inventory | — | 357 | 651 | 1,395 | (80 | ) | 2,323 | ||||||||||||||||
Prepaid expenses and other current assets | — | 77 | 40 | 229 | 23 | 369 | |||||||||||||||||
Total current assets | 1 | 1,814 | 5,618 | 6,899 | (7,716 | ) | 6,616 | ||||||||||||||||
Property, plant and equipment - net | — | 930 | 750 | 1,885 | — | 3,565 | |||||||||||||||||
Other noncurrent assets | |||||||||||||||||||||||
Goodwill | — | 1,355 | 6,264 | 5,860 | — | 13,479 | |||||||||||||||||
Other intangible assets | — | 182 | 3,624 | 2,208 | — | 6,014 | |||||||||||||||||
Deferred income taxes | — | 1,016 | — | 218 | (872 | ) | 362 | ||||||||||||||||
Investment in subsidiaries | 29,627 | 13,001 | 60,139 | 10,163 | (112,930 | ) | — | ||||||||||||||||
Intercompany loans receivable | — | 8,641 | 1,573 | 44,835 | (55,049 | ) | — | ||||||||||||||||
Other assets | — | 527 | 122 | 346 | — | 995 | |||||||||||||||||
Total assets | $ | 29,628 | $ | 27,466 | $ | 78,090 | $ | 72,414 | $ | (176,567 | ) | $ | 31,031 | ||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||
Current liabilities | |||||||||||||||||||||||
Short-term debt | $ | — | $ | 408 | $ | — | $ | 18 | $ | — | $ | 426 | |||||||||||
Current portion of long-term debt | — | 1 | 240 | 1 | — | 242 | |||||||||||||||||
Accounts payable | — | 392 | 260 | 1,106 | — | 1,758 | |||||||||||||||||
Intercompany accounts payable | 219 | 4,009 | 2,248 | 1,183 | (7,659 | ) | — | ||||||||||||||||
Accrued compensation | — | 77 | 53 | 236 | — | 366 | |||||||||||||||||
Other current liabilities | 1 | 644 | 318 | 875 | (5 | ) | 1,833 | ||||||||||||||||
Total current liabilities | 220 | 5,531 | 3,119 | 3,419 | (7,664 | ) | 4,625 | ||||||||||||||||
Noncurrent liabilities | |||||||||||||||||||||||
Long-term debt | — | 7,088 | 675 | 17 | 1 | 7,781 | |||||||||||||||||
Pension liabilities | — | 639 | 165 | 782 | — | 1,586 | |||||||||||||||||
Other postretirement benefits liabilities | — | 245 | 118 | 77 | — | 440 | |||||||||||||||||
Deferred income taxes | — | — | 815 | 447 | (872 | ) | 390 | ||||||||||||||||
Intercompany loans payable | 14,222 | 2,962 | 36,432 | 1,433 | (55,049 | ) | — | ||||||||||||||||
Other noncurrent liabilities | — | 346 | 200 | 432 | — | 978 | |||||||||||||||||
Total noncurrent liabilities | 14,222 | 11,280 | 38,405 | 3,188 | (55,920 | ) | 11,175 | ||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||
Eaton shareholders' equity | 15,186 | 10,655 | 36,566 | 65,770 | (112,991 | ) | 15,186 | ||||||||||||||||
Noncontrolling interests | — | — | — | 37 | 8 | 45 | |||||||||||||||||
Total equity | 15,186 | 10,655 | 36,566 | 65,807 | (112,983 | ) | 15,231 | ||||||||||||||||
Total liabilities and equity | $ | 29,628 | $ | 27,466 | $ | 78,090 | $ | 72,414 | $ | (176,567 | ) | $ | 31,031 |
CONDENSED CONSOLIDATING BALANCE SHEETS DECEMBER 31, 2014 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Current assets | |||||||||||||||||||||||
Cash | $ | 1 | $ | 173 | $ | 13 | $ | 594 | $ | — | $ | 781 | |||||||||||
Short-term investments | — | — | 1 | 244 | — | 245 | |||||||||||||||||
Accounts receivable - net | — | 500 | 955 | 2,212 | — | 3,667 | |||||||||||||||||
Intercompany accounts receivable | 2 | 759 | 3,822 | 4,101 | (8,684 | ) | — | ||||||||||||||||
Inventory | — | 397 | 637 | 1,445 | (51 | ) | 2,428 | ||||||||||||||||
Prepaid expenses and other current assets | — | 464 | 171 | 340 | 4 | 979 | |||||||||||||||||
Total current assets | 3 | 2,293 | 5,599 | 8,936 | (8,731 | ) | 8,100 | ||||||||||||||||
Property, plant and equipment - net | — | 972 | 756 | 2,022 | — | 3,750 | |||||||||||||||||
Other noncurrent assets | |||||||||||||||||||||||
Goodwill | — | 1,355 | 6,263 | 6,275 | — | 13,893 | |||||||||||||||||
Other intangible assets | — | 196 | 3,811 | 2,549 | — | 6,556 | |||||||||||||||||
Deferred income taxes | — | 889 | 10 | 137 | (808 | ) | 228 | ||||||||||||||||
Investment in subsidiaries | 26,612 | 12,238 | 58,684 | 9,185 | (106,719 | ) | — | ||||||||||||||||
Intercompany loans receivable | — | 7,542 | 2,249 | 40,635 | (50,426 | ) | — | ||||||||||||||||
Other assets | — | 473 | 142 | 387 | — | 1,002 | |||||||||||||||||
Total assets | $ | 26,615 | $ | 25,958 | $ | 77,514 | $ | 70,126 | $ | (166,684 | ) | $ | 33,529 | ||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||
Current liabilities | |||||||||||||||||||||||
Short-term debt | $ | — | $ | — | $ | — | $ | 2 | $ | — | $ | 2 | |||||||||||
Current portion of long-term debt | — | 702 | 304 | 2 | — | 1,008 | |||||||||||||||||
Accounts payable | — | 475 | 340 | 1,125 | — | 1,940 | |||||||||||||||||
Intercompany accounts payable | 117 | 4,087 | 3,443 | 1,037 | (8,684 | ) | — | ||||||||||||||||
Accrued compensation | — | 112 | 59 | 249 | — | 420 | |||||||||||||||||
Other current liabilities | 1 | 674 | 343 | 981 | (14 | ) | 1,985 | ||||||||||||||||
Total current liabilities | 118 | 6,050 | 4,489 | 3,396 | (8,698 | ) | 5,355 | ||||||||||||||||
Noncurrent liabilities | |||||||||||||||||||||||
Long-term debt | — | 7,079 | 932 | 13 | — | 8,024 | |||||||||||||||||
Pension liabilities | — | 726 | 183 | 903 | — | 1,812 | |||||||||||||||||
Other postretirement benefits liabilities | — | 283 | 136 | 94 | — | 513 | |||||||||||||||||
Deferred income taxes | — | — | 1,160 | 549 | (808 | ) | 901 | ||||||||||||||||
Intercompany loans payable | 10,711 | 2,723 | 36,162 | 830 | (50,426 | ) | — | ||||||||||||||||
Other noncurrent liabilities | — | 457 | 186 | 442 | — | 1,085 | |||||||||||||||||
Total noncurrent liabilities | 10,711 | 11,268 | 38,759 | 2,831 | (51,234 | ) | 12,335 | ||||||||||||||||
Shareholders’ equity | |||||||||||||||||||||||
Eaton shareholders' equity | 15,786 | 8,640 | 34,266 | 63,854 | (106,760 | ) | 15,786 | ||||||||||||||||
Noncontrolling interests | — | — | — | 45 | 8 | 53 | |||||||||||||||||
Total equity | 15,786 | 8,640 | 34,266 | 63,899 | (106,752 | ) | 15,839 | ||||||||||||||||
Total liabilities and equity | $ | 26,615 | $ | 25,958 | $ | 77,514 | $ | 70,126 | $ | (166,684 | ) | $ | 33,529 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2015 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (137 | ) | $ | (46 | ) | $ | (283 | ) | $ | 2,841 | $ | (4 | ) | $ | 2,371 | |||||||
Investing activities | |||||||||||||||||||||||
Capital expenditures for property, plant and equipment | — | (94 | ) | (146 | ) | (266 | ) | — | (506 | ) | |||||||||||||
Cash received from (paid for) acquisitions of businesses, net of cash acquired | — | — | (36 | ) | (36 | ) | — | (72 | ) | ||||||||||||||
Sales (purchases) of short-term investment - net | — | — | (2 | ) | 39 | — | 37 | ||||||||||||||||
Investments in affiliates | (1,482 | ) | — | (1,176 | ) | (1,482 | ) | 4,140 | — | ||||||||||||||
Loans to affiliates | — | (1,235 | ) | (39 | ) | (10,608 | ) | 11,882 | — | ||||||||||||||
Repayments of loans from affiliates | — | 342 | 359 | 7,148 | (7,849 | ) | — | ||||||||||||||||
Proceeds from the sales of businesses | — | — | — | 1 | — | 1 | |||||||||||||||||
Other - net | — | (50 | ) | 47 | (32 | ) | — | (35 | ) | ||||||||||||||
Net cash provided by (used in) investing activities | (1,482 | ) | (1,037 | ) | (993 | ) | (5,236 | ) | 8,173 | (575 | ) | ||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from borrowings | — | 408 | — | 17 | — | 425 | |||||||||||||||||
Payments on borrowings | — | (724 | ) | (301 | ) | (2 | ) | — | (1,027 | ) | |||||||||||||
Proceeds from borrowings from affiliates | 3,322 | 6,885 | 997 | 678 | (11,882 | ) | — | ||||||||||||||||
Payments on borrowings from affiliates | (48 | ) | (6,122 | ) | (1,282 | ) | (397 | ) | 7,849 | — | |||||||||||||
Capital contribution from affiliates | — | 1,176 | 1,482 | 1,482 | (4,140 | ) | — | ||||||||||||||||
Other intercompany financing activities | — | (688 | ) | 374 | 314 | — | — | ||||||||||||||||
Cash dividends paid | (1,026 | ) | — | — | — | — | (1,026 | ) | |||||||||||||||
Cash dividends paid to affiliates | — | — | — | (4 | ) | 4 | — | ||||||||||||||||
Exercise of employee stock options | 52 | — | — | — | — | 52 | |||||||||||||||||
Repurchase of shares | (682 | ) | — | — | — | — | (682 | ) | |||||||||||||||
Excess tax benefit from equity-based compensation | — | 1 | — | — | — | 1 | |||||||||||||||||
Other - net | — | — | — | (10 | ) | — | (10 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 1,618 | 936 | 1,270 | 2,078 | (8,169 | ) | (2,267 | ) | |||||||||||||||
Effect of currency on cash | — | — | — | (42 | ) | — | (42 | ) | |||||||||||||||
Total increase (decrease) in cash | (1 | ) | (147 | ) | (6 | ) | (359 | ) | — | (513 | ) | ||||||||||||
Cash at the beginning of the period | 1 | 173 | 13 | 594 | — | 781 | |||||||||||||||||
Cash at the end of the period | $ | — | $ | 26 | $ | 7 | $ | 235 | $ | — | $ | 268 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2014 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (93 | ) | $ | (411 | ) | $ | (218 | ) | $ | 2,568 | $ | 32 | $ | 1,878 | ||||||||
Investing activities | |||||||||||||||||||||||
Capital expenditures for property, plant and equipment | — | (127 | ) | (168 | ) | (337 | ) | — | (632 | ) | |||||||||||||
Cash received from (paid for) acquisitions of businesses, net of cash acquired | — | — | — | 2 | — | 2 | |||||||||||||||||
Sales (purchases) of short-term investments - net | — | — | 133 | 389 | — | 522 | |||||||||||||||||
Investments in affiliates | (753 | ) | — | — | (753 | ) | 1,506 | — | |||||||||||||||
Loans to affiliates | — | (354 | ) | (162 | ) | (10,546 | ) | 11,062 | — | ||||||||||||||
Repayments of loans from affiliates | — | 978 | 212 | 8,451 | (9,641 | ) | — | ||||||||||||||||
Proceeds from the sales of businesses | — | 93 | 175 | 14 | — | 282 | |||||||||||||||||
Other - net | — | (47 | ) | 44 | (28 | ) | — | (31 | ) | ||||||||||||||
Net cash provided by (used in) investing activities | (753 | ) | 543 | 234 | (2,808 | ) | 2,927 | 143 | |||||||||||||||
Financing activities | |||||||||||||||||||||||
Payments on borrowings | — | (553 | ) | (1 | ) | (28 | ) | — | (582 | ) | |||||||||||||
Proceeds from borrowings from affiliates | 2,628 | 7,599 | 808 | 27 | (11,062 | ) | — | ||||||||||||||||
Payments on borrowings from affiliates | (476 | ) | (6,907 | ) | (1,875 | ) | (383 | ) | 9,641 | — | |||||||||||||
Capital contribution from affiliates | — | — | 753 | 753 | (1,506 | ) | — | ||||||||||||||||
Other intercompany financing activities | 217 | (169 | ) | 302 | (350 | ) | — | — | |||||||||||||||
Cash dividends paid | (929 | ) | — | — | — | — | (929 | ) | |||||||||||||||
Cash dividends received from affiliates | — | — | — | 32 | (32 | ) | — | ||||||||||||||||
Exercise of employee stock options | 54 | — | — | — | — | 54 | |||||||||||||||||
Repurchase of shares | (650 | ) | — | — | — | — | (650 | ) | |||||||||||||||
Excess tax benefit from equity-based compensation | — | 20 | — | — | — | 20 | |||||||||||||||||
Other - net | — | — | — | (43 | ) | — | (43 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 844 | (10 | ) | (13 | ) | 8 | (2,959 | ) | (2,130 | ) | |||||||||||||
Effect of currency on cash | — | — | — | (25 | ) | — | (25 | ) | |||||||||||||||
Total increase (decrease) in cash | (2 | ) | 122 | 3 | (257 | ) | — | (134 | ) | ||||||||||||||
Cash at the beginning of the period | 3 | 51 | 10 | 851 | — | 915 | |||||||||||||||||
Cash at the end of the period | $ | 1 | $ | 173 | $ | 13 | $ | 594 | $ | — | $ | 781 |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS DECEMBER 31, 2013 | |||||||||||||||||||||||
Eaton Corporation plc | Eaton Corporation | Guarantors | Other subsidiaries | Consolidating adjustments | Total | ||||||||||||||||||
Net cash provided by (used in) operating activities | $ | (17 | ) | $ | 860 | $ | 428 | $ | 1,067 | $ | (53 | ) | $ | 2,285 | |||||||||
Investing activities | |||||||||||||||||||||||
Capital expenditures for property, plant and equipment | — | (171 | ) | (119 | ) | (324 | ) | — | (614 | ) | |||||||||||||
Cash received from (paid for) acquisitions of businesses, net of cash acquired | — | — | — | (9 | ) | — | (9 | ) | |||||||||||||||
Sales (purchases) of short-term investments - net | — | 25 | (95 | ) | (218 | ) | — | (288 | ) | ||||||||||||||
Loans to affiliates | — | (535 | ) | (545 | ) | (6,215 | ) | 7,295 | — | ||||||||||||||
Repayments of loans from affiliates | — | 36 | 626 | 5,795 | (6,457 | ) | — | ||||||||||||||||
Proceeds from the sales of businesses | — | — | — | 777 | — | 777 | |||||||||||||||||
Other - net | — | (41 | ) | (12 | ) | (15 | ) | — | (68 | ) | |||||||||||||
Net cash provided by (used in) investing activities | — | (686 | ) | (145 | ) | (209 | ) | 838 | (202 | ) | |||||||||||||
Financing activities | |||||||||||||||||||||||
Proceeds from borrowings | — | — | — | 9 | — | 9 | |||||||||||||||||
Payments on borrowings | — | (1,048 | ) | (43 | ) | (5 | ) | — | (1,096 | ) | |||||||||||||
Proceeds from borrowings from affiliates | — | 2,395 | 4,260 | 640 | (7,295 | ) | — | ||||||||||||||||
Payments on borrowings from affiliates | — | (2,921 | ) | (2,874 | ) | (662 | ) | 6,457 | — | ||||||||||||||
Other intercompany financing activities | 688 | 1,365 | (1,630 | ) | (423 | ) | — | — | |||||||||||||||
Cash dividends paid | (796 | ) | — | — | — | — | (796 | ) | |||||||||||||||
Cash dividends paid to affiliates | — | — | — | (53 | ) | 53 | — | ||||||||||||||||
Exercise of employee stock options | 121 | — | — | — | — | 121 | |||||||||||||||||
Excess tax benefit from equity-based compensation | — | 32 | — | — | — | 32 | |||||||||||||||||
Other - net | — | — | — | (6 | ) | — | (6 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 13 | (177 | ) | (287 | ) | (500 | ) | (785 | ) | (1,736 | ) | ||||||||||||
Effect of currency on cash | — | — | — | (9 | ) | — | (9 | ) | |||||||||||||||
Total increase (decrease) in cash | (4 | ) | (3 | ) | (4 | ) | 349 | — | 338 | ||||||||||||||
Cash at the beginning of the period | 7 | 54 | 14 | 502 | — | 577 | |||||||||||||||||
Cash at the end of the period | $ | 3 | $ | 51 | $ | 10 | $ | 851 | $ | — | $ | 915 |
2015 | 2014 | 2013 | |||||||||
Net sales | $ | 20,855 | $ | 22,552 | $ | 22,046 | |||||
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 | ||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 4.23 | $ | 3.76 | $ | 3.90 |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 20,855 | (8 | )% | $ | 22,552 | 2 | % | $ | 22,046 | |||||||
Gross profit | 6,563 | (5 | )% | 6,906 | 3 | % | 6,677 | ||||||||||
Percent of net sales | 31.5 | % | 30.6 | % | 30.3 | % | |||||||||||
Income before income taxes | 2,145 | 22 | % | 1,761 | (7 | )% | 1,884 | ||||||||||
Net income | 1,981 | 10 | % | 1,803 | (4 | )% | 1,873 | ||||||||||
Less net income for noncontrolling interests | (2 | ) | (10 | ) | (12 | ) | |||||||||||
Net income attributable to Eaton ordinary shareholders | 1,979 | 10 | % | 1,793 | (4 | )% | 1,861 | ||||||||||
Excluding acquisition integration charges and transaction costs (after-tax) | 31 | 102 | 110 | ||||||||||||||
Operating earnings | $ | 2,010 | 6 | % | $ | 1,895 | (4 | )% | $ | 1,971 | |||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 4.23 | 13 | % | $ | 3.76 | (4 | )% | $ | 3.90 | |||||||
Excluding per share impact of acquisition integration charges and transaction costs (after-tax) | 0.07 | 0.21 | 0.23 | ||||||||||||||
Operating earnings per ordinary share | $ | 4.30 | 8 | % | $ | 3.97 | (4 | )% | $ | 4.13 |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 6,976 | (4 | )% | $ | 7,254 | 3 | % | $ | 7,026 | |||||||
Operating profit | 1,156 | (2 | )% | 1,184 | 9 | % | 1,090 | ||||||||||
Operating margin | 16.6 | % | 16.3 | % | 15.5 | % | |||||||||||
Acquisition integration charges | $ | 25 | $ | 66 | $ | 44 | |||||||||||
Before acquisition integration charges | |||||||||||||||||
Operating profit | $ | 1,181 | (6 | )% | $ | 1,250 | 10 | % | $ | 1,134 | |||||||
Operating margin | 16.9 | % | 17.2 | % | 16.1 | % |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 5,931 | (8 | )% | $ | 6,457 | — | % | $ | 6,430 | |||||||
Operating profit | 776 | (8 | )% | 843 | (5 | )% | 889 | ||||||||||
Operating margin | 13.1 | % | 13.1 | % | 13.8 | % | |||||||||||
Acquisition integration charges | $ | 15 | $ | 51 | $ | 37 | |||||||||||
Before acquisition integration charges | |||||||||||||||||
Operating profit | $ | 791 | (12 | )% | $ | 894 | (3 | )% | $ | 926 | |||||||
Operating margin | 13.3 | % | 13.8 | % | 14.4 | % |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 2,459 | (17 | )% | $ | 2,975 | — | % | $ | 2,981 | |||||||
Operating profit | 246 | (33 | )% | 367 | 3 | % | 355 | ||||||||||
Operating margin | 10.0 | % | 12.3 | % | 11.9 | % | |||||||||||
Acquisition integration charges | $ | 2 | $ | 12 | $ | 36 | |||||||||||
Before acquisition integration charges | |||||||||||||||||
Operating profit | $ | 248 | (35 | )% | $ | 379 | (3 | )% | $ | 391 | |||||||
Operating margin | 10.1 | % | 12.7 | % | 13.1 | % |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 1,807 | (3 | )% | $ | 1,860 | 5 | % | $ | 1,774 | |||||||
Operating profit | 310 | 14 | % | 273 | 8 | % | 252 | ||||||||||
Operating margin | 17.2 | % | 14.7 | % | 14.2 | % |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Net sales | $ | 3,682 | (8 | )% | $ | 4,006 | 4 | % | $ | 3,835 | |||||||
Operating profit | 645 | — | % | 645 | 9 | % | 592 | ||||||||||
Operating margin | 17.5 | % | 16.1 | % | 15.4 | % |
2015 | Change from 2014 | 2014 | Change from 2013 | 2013 | |||||||||||||
Litigation settlements | $ | — | NM | $ | 644 | NM | $ | — | |||||||||
Amortization of intangible assets | 406 | (6 | )% | 431 | (1 | )% | 437 | ||||||||||
Interest expense - net | 232 | 2 | % | 227 | (16 | )% | 271 | ||||||||||
Pension and other postretirement benefits expense | 130 | (6 | )% | 138 | (25 | )% | 183 | ||||||||||
Inventory step-up adjustment | — | NM | — | NM | 34 | ||||||||||||
Gain on divestiture of Aerospace businesses | — | NM | (154 | ) | NM | — | |||||||||||
Other corporate expense - net | 220 | (17 | )% | 265 | (28 | )% | 369 | ||||||||||
Total corporate expense | $ | 988 | (36 | )% | $ | 1,551 | 20 | % | $ | 1,294 |
Credit Rating Agency (long- /short-term rating) | Rating | Outlook | ||
Standard & Poor's | A-/A-2 | Stable outlook | ||
Moody's | Baa1/P-2 | Stable outlook | ||
Fitch | BBB+/F2 | Stable outlook |
2016 | 2017 to 2018 | 2019 to 2020 | Thereafter | Total | |||||||||||||||
Long-term debt, including current portion(1) | $ | 242 | $ | 2,120 | $ | 581 | $ | 4,890 | $ | 7,833 | |||||||||
Interest expense related to long-term debt | 312 | 538 | 431 | 1,939 | 3,220 | ||||||||||||||
Reduction of interest expense from interest rate swap agreements related to long-term debt | (59 | ) | (79 | ) | (33 | ) | (74 | ) | (245 | ) | |||||||||
Operating leases | 151 | 203 | 81 | 55 | 490 | ||||||||||||||
Purchase obligations | 759 | 89 | 38 | 7 | 893 | ||||||||||||||
Other obligations | 188 | 18 | 14 | 25 | 245 | ||||||||||||||
Total | $ | 1,593 | $ | 2,889 | $ | 1,112 | $ | 6,842 | $ | 12,436 | |||||||||
(1) Long-term debt excludes deferred gains and losses on derivatives related to debt, adjustments to fair market value, and premiums and discounts on long-term debentures. |
Quarter ended in 2015 | Quarter ended in 2014 | ||||||||||||||||||||||||||||||
(In millions except for per share data) | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||||||||||||
Net sales | $ | 5,057 | $ | 5,203 | $ | 5,372 | $ | 5,223 | $ | 5,565 | $ | 5,728 | $ | 5,767 | $ | 5,492 | |||||||||||||||
Gross profit | 1,630 | 1,606 | 1,697 | 1,630 | 1,718 | 1,812 | 1,742 | 1,634 | |||||||||||||||||||||||
Percent of net sales | 32.2 | % | 30.9 | % | 31.6 | % | 31.2 | % | 30.9 | % | 31.6 | % | 30.2 | % | 29.8 | % | |||||||||||||||
Income before income taxes | 555 | 487 | 598 | 505 | 609 | 642 | 57 | 453 | |||||||||||||||||||||||
Net income | 534 | 445 | 535 | 467 | 585 | 605 | 172 | 441 | |||||||||||||||||||||||
Less net income for noncontrolling interests | (2 | ) | 1 | — | (1 | ) | (4 | ) | (3 | ) | (1 | ) | (2 | ) | |||||||||||||||||
Net income attributable to Eaton ordinary shareholders | $ | 532 | $ | 446 | $ | 535 | $ | 466 | $ | 581 | $ | 602 | $ | 171 | $ | 439 | |||||||||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||||||||||||||||||||||
Diluted | $ | 1.15 | $ | 0.96 | $ | 1.14 | $ | 0.99 | $ | 1.23 | $ | 1.26 | $ | 0.36 | $ | 0.92 | |||||||||||||||
Basic | 1.15 | 0.96 | 1.14 | 1.00 | 1.24 | 1.27 | 0.36 | 0.92 | |||||||||||||||||||||||
Cash dividends declared per ordinary share | $ | 0.55 | $ | 0.55 | $ | 0.55 | $ | 0.55 | $ | 0.49 | $ | 0.49 | $ | 0.49 | $ | 0.49 | |||||||||||||||
Market price per ordinary share | |||||||||||||||||||||||||||||||
High | $ | 58.59 | $ | 68.23 | $ | 73.82 | $ | 72.78 | $ | 70.51 | $ | 79.98 | $ | 79.65 | $ | 78.19 | |||||||||||||||
Low | 49.46 | 49.21 | 66.86 | 62.80 | 57.11 | 62.84 | 70.26 | 66.89 | |||||||||||||||||||||||
Earnings per share for the four quarters in a year may not equal full year earnings per share. | |||||||||||||||||||||||||||||||
Acquisition integration charges included in Income before income taxes are as follows: | |||||||||||||||||||||||||||||||
Quarter ended in 2015 | Quarter ended in 2014 | ||||||||||||||||||||||||||||||
Dec. 31 | Sept. 30 | June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | ||||||||||||||||||||||||
Acquisition integration charges | $ | 14 | $ | 10 | $ | 12 | $ | 11 | $ | 32 | $ | 19 | $ | 37 | $ | 66 |
(In millions except for per share data) | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||||||||||||||
Net sales | $ | 20,855 | $ | 22,552 | $ | 22,046 | $ | 16,311 | $ | 16,049 | $ | 13,715 | $ | 11,873 | $ | 15,376 | $ | 13,033 | $ | 12,232 | |||||||||||||||||||
Income before income taxes | 2,145 | 1,761 | 1,884 | 1,251 | 1,553 | 1,036 | 303 | 1,140 | 1,055 | 979 | |||||||||||||||||||||||||||||
Income after income taxes | 1,981 | 1,803 | 1,873 | 1,220 | 1,352 | 937 | 385 | 1,067 | 973 | 907 | |||||||||||||||||||||||||||||
Income from discontinued operations | — | — | — | — | — | — | — | 3 | 35 | 53 | |||||||||||||||||||||||||||||
Net income | 1,981 | 1,803 | 1,873 | 1,220 | 1,352 | 937 | 385 | 1,070 | 1,008 | 960 | |||||||||||||||||||||||||||||
Less net income for noncontrolling interests | (2 | ) | (10 | ) | (12 | ) | (3 | ) | (2 | ) | (8 | ) | (2 | ) | (12 | ) | (14 | ) | (10 | ) | |||||||||||||||||||
Net income attributable to Eaton ordinary shareholders | $ | 1,979 | $ | 1,793 | $ | 1,861 | $ | 1,217 | $ | 1,350 | $ | 929 | $ | 383 | $ | 1,058 | $ | 994 | $ | 950 | |||||||||||||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | |||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 4.23 | $ | 3.76 | $ | 3.90 | $ | 3.46 | $ | 3.93 | $ | 2.73 | $ | 1.14 | $ | 3.25 | $ | 3.19 | $ | 2.94 | |||||||||||||||||||
Discontinued operations | — | — | — | — | — | — | — | 0.01 | 0.12 | 0.17 | |||||||||||||||||||||||||||||
Total | $ | 4.23 | $ | 3.76 | $ | 3.90 | $ | 3.46 | $ | 3.93 | $ | 2.73 | $ | 1.14 | $ | 3.26 | $ | 3.31 | $ | 3.11 | |||||||||||||||||||
Net income per share attributable to Eaton ordinary shareholders - basic | |||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | 4.25 | $ | 3.78 | $ | 3.93 | $ | 3.54 | $ | 3.98 | $ | 2.76 | $ | 1.16 | $ | 3.29 | $ | 3.26 | $ | 2.99 | |||||||||||||||||||
Discontinued operations | — | — | — | — | — | — | — | 0.01 | 0.12 | 0.17 | |||||||||||||||||||||||||||||
Total | $ | 4.25 | $ | 3.78 | $ | 3.93 | $ | 3.54 | $ | 3.98 | $ | 2.76 | $ | 1.16 | $ | 3.30 | $ | 3.38 | $ | 3.16 | |||||||||||||||||||
Weighted-average number of ordinary shares outstanding | |||||||||||||||||||||||||||||||||||||||
Diluted | 467.1 | 476.8 | 476.7 | 350.9 | 342.8 | 339.5 | 335.8 | 324.6 | 300.6 | 305.8 | |||||||||||||||||||||||||||||
Basic | 465.5 | 474.1 | 473.5 | 347.8 | 338.3 | 335.5 | 332.7 | 320.4 | 294.6 | 300.4 | |||||||||||||||||||||||||||||
Cash dividends declared per ordinary share | $ | 2.20 | $ | 1.96 | $ | 1.68 | $ | 1.52 | $ | 1.36 | $ | 1.08 | $ | 1.00 | $ | 1.00 | $ | 0.86 | $ | 0.74 | |||||||||||||||||||
Total assets | $ | 31,031 | $ | 33,529 | $ | 35,491 | $ | 35,810 | $ | 17,873 | $ | 17,252 | $ | 16,282 | $ | 16,655 | $ | 13,430 | $ | 11,417 | |||||||||||||||||||
Long-term debt | 7,781 | 8,024 | 8,969 | 9,765 | 3,366 | 3,382 | 3,349 | 3,190 | 2,432 | 1,774 | |||||||||||||||||||||||||||||
Total debt | 8,449 | 9,034 | 9,549 | 10,836 | 3,773 | 3,458 | 3,467 | 4,271 | 3,417 | 2,586 | |||||||||||||||||||||||||||||
Eaton shareholders' equity | 15,186 | 15,786 | 16,791 | 15,113 | 7,469 | 7,362 | 6,777 | 6,317 | 5,172 | 4,106 | |||||||||||||||||||||||||||||
Eaton shareholders' equity per ordinary share | $ | 33.10 | $ | 33.74 | $ | 35.34 | $ | 32.11 | $ | 22.34 | $ | 21.66 | $ | 20.39 | $ | 19.14 | $ | 17.71 | $ | 14.04 | |||||||||||||||||||
Ordinary shares outstanding | 458.8 | 467.9 | 475.1 | 470.7 | 334.4 | 339.9 | 332.3 | 330.0 | 292.0 | 292.6 |
3 (i) | Certificate of Incorporation - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
3 (ii) | Amended and restated Memorandum and Articles of Incorporation - Incorporated by reference to the Form 10-Q Report for the three months ended September 30, 2012 | |
4 (a) | Pursuant to Regulation S-K Item 601(b) (4), the Company agrees to furnish to the SEC, upon request, a copy of the instruments defining the rights of holders of its other long-term debt | |
10 | Material contracts | |
(a) | Senior Executive Incentive Compensation Plan (effective February 27, 2013) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(b) | Deferred Incentive Compensation Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(c) | First Amendment to Deferred Incentive Compensation Plan II - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(d) | Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(e) | First Amendment to Excess Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(f) | Incentive Compensation Deferral Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(g) | First Amendment to Incentive Compensation Deferral Plan II - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(h) | Limited Eaton Service Supplemental Retirement Income Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(i) | First Amended to Limited Eaton Service Supplemental Retirement Income Plan II - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(j) | Supplemental Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(k) | First Amendment to Supplemental Benefits Plan II (2008 restatement) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(l) | Form of Restricted Share Unit Agreement - Filed in conjunction with this Form 10-K Report * | |
(m) | Form of Restricted Share Award Agreement - Filed in conjunction with this Form 10-K Report * | |
(n) | Form of Restricted Share Agreement (Non-Employee Directors) - Incorporated by reference to the Form 8-K Report filed February 1, 2010 | |
(o) | Form of Directors' Restricted Share Unit Agreement - Incorporated by reference to the Form 10-K report for the year ended December 31, 2012 | |
(p) | Form of Stock Option Agreement for Executives - Filed in conjunction with this Form 10-K Report * | |
(q) | Form of Stock Option Agreement for Non-Employee Directors (2008) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2007 | |
(r) | Amended and Restated 2002 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(s) | Amended and Restated 2004 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012 |
(t) | Amended and Restated 2008 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(u) | Second Amended and Restated 2009 Stock Plan - Incorporated by reference to Form S-8 filed November 30, 2012 | |
(v) | Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(w) | Amendment to Amended and Restated 2012 Stock Plan - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(x) | First Amendment to 2005 Non-Employee Director Fee Deferral Plan - Incorporated by reference to the Form S-8 filed November 30, 2012 | |
(y) | 2013 Non-Employee Director Fee Deferral Plan - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(z) | 2015 Stock Plan - Incorporated by reference to the Form S-8 filed on October 30, 2015 | |
(aa) | Form of Change of Control Agreement entered into with officers of Eaton Corporation - Incorporated by reference to the Form 8-K Report filed on December 17, 2015 | |
(bb) | Form of Indemnification Agreement entered into with directors - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(cc) | Form of Indemnification Agreement II entered into with directors - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(dd) | Amended and Restated Executive Strategic Incentive Plan (amended and restated February 27, 2013) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(ee) | Executive Strategic Incentive Plan II (effective January 1, 2001) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2002 | |
(ff) | Amended and Restated Supplemental Executive Strategic Incentive Plan (amended and restated February 27, 2013) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(gg) | Deferred Incentive Compensation Plan (amended and restated effective November 1, 2007) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2009 | |
(hh) | Group Replacement Insurance Plan (GRIP) (effective June 1, 1992) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 1992 | |
(ii) | Excess Benefits Plan (amended and restated effective January 1, 1989) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2002 | |
(jj) | Amendment to Excess Benefits Plan - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(kk) | Supplemental Benefits Plan (amended and restated January 1, 1989) - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2002 | |
(ll) | Amendment to Supplemental Benefits Plan - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2012 | |
(mm) | Eaton Corporation Board of Directors Policy on Incentive Compensation, Stock Options and Other Equity Grants upon the Restatement of Financial Results - Filed in conjunction with this Form 10-K Report* |
(nn) | Amended and Restated Grantor Trust Agreement for Non-Employee Directors’ Deferred Fees Plans - effective January 1, 2010 - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2010 | |
(oo) | Amended and Restated Grantor Trust Agreement for Employees’ Deferred Compensation Plans - effective January 1, 2010 - Incorporated by reference to the Form 10-K Report for the year ended December 31, 2010 | |
(pp) | Eaton Savings Plan 2016 Restatement - Filed in conjunction with this Form 10-K Report. * | |
(qq) | Eaton Personal Investment Plan 2015 Restatement - Filed in conjunction with this Form 10-K Report. * | |
(rr) | Performance Share Award Agreement - Filed in conjunction with this Form 10-K Report * | |
(ss) | Form of Indemnification Agreement entered into with officers of Eaton Corporation - Filed in conjunction with this Form 10-K Report * | |
(tt) | Amended to Limited Eaton Service Supplemental Retirement Income Plan I- Filed in conjunction with this Form 10-K Report * | |
12 | Ratio of Earnings to Fixed Charges - Filed in conjunction with this Form 10-K Report * | |
14 | Code of Ethics - Incorporated by reference to the definitive Proxy Statement filed on March 14, 2008 | |
21 | Subsidiaries of Eaton Corporation plc - Filed in conjunction with this Form 10-K Report * | |
23 | Consent of Independent Registered Public Accounting Firm - Filed in conjunction with this Form 10-K Report * | |
24 | Power of Attorney - Filed in conjunction with this Form 10-K Report * | |
31.1 | Certification of Principal Executive Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 302) - Filed in conjunction with this Form 10-K Report * | |
31.2 | Certification of Principal Financial Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 302) - Filed in conjunction with this Form 10-K Report * | |
32.1 | Certification of Principal Executive Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 906) - Filed in conjunction with this Form 10-K Report * | |
32.2 | Certification of Principal Financial Officer (Pursuant to the Sarbanes-Oxley Act of 2002, Section 906) - Filed in conjunction with this Form 10-K Report * | |
101.INS | XBRL Instance Document * | |
101.SCH | XBRL Taxonomy Extension Schema Document * | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document * |
* | Submitted electronically herewith. |
Article I. | ESTABLISHMENT OF THE PLAN | 1 |
Section 1.1 | Establishment of Plan and Effective Date | 1 |
Section 1.2 | Purposes of the Plan | 4 |
Article II. | DEFINITIONS AND CONSTRUCTION | 5 |
Section 2.1 | Definitions | 5 |
Section 2.2 | Gender and Number | 15 |
Section 2.3 | Headings | 15 |
Section 2.4 | Plan Provisions Controlling | 15 |
Section 2.5 | Severability | 15 |
Section 2.6 | Code and ERISA Compliance; Applicable Law | 16 |
Article III. | ELIGIBILITY | 16 |
Section 3.1 | General | 16 |
Section 3.2 | Rehire | 16 |
Article IV. | PARTICIPATION | 16 |
Section 4.1 | General | 16 |
Section 4.2 | Automatic Enrollment | 17 |
Article V. | CONTRIBUTIONS | 19 |
Section 5.1 | Member Regular Contributions; Deferred Compensation Contributions; and "Catch-Up Contributions" | 19 |
Section 5.2 | Limitation on Regular and Deferred Compensation Contributions | 22 |
Section 5.3 | Company Contributions | 22 |
Section 5.4 | Allocation of Company Contributions | 25 |
Section 5.5 | Eaton Retirement Contributions | 25 |
Section 5.6 | Allocation, Payment and Vesting of Eaton Retirement Contributions | 27 |
Section 5.7 | Maximum Additions | 27 |
Section 5.8 | Excess Deferrals | 30 |
Section 5.9 | Excess Deferred Compensation Contributions | 32 |
Section 5.10 | Excess Company and Regular Contributions | 37 |
Section 5.11 | Miscellaneous ADP/ACP Safe Harbor Notice, Election, and Contribution Requirements | 42 |
Section 5.12 | Miscellaneous ADP/ACP Testing Provisions | 43 |
Article VI. | INVESTMENT OF FUNDS | 46 |
Section 6.1 | Investment Funds | 46 |
Section 6.2 | Investment of Member Contributions and Deferred Compensation Contributions | 47 |
Section 6.3 | Investment of Company Contributions and Eaton Retirement Contributions | 48 |
Section 6.4 | Charges and Credits to Accounts | 49 |
Section 6.5 | Investment of Income Received; Cash Balances | 49 |
Section 6.6 | Investment Values and Decisions; Exercise of Investment Discretion | 50 |
Section 6.7 | Diversification of Eaton Shares | 51 |
Article VII. | CREDITS AND ACCOUNTS | 51 |
Section 7.1 | Credits | 51 |
Section 7.2 | Accounts | 52 |
Article VIII. | SERVICE AND VESTING | 52 |
Section 8.1 | Special Definitions | 52 |
Section 8.2 | Crediting Hours of Service | 53 |
Section 8.3 | Crediting of Vesting Service | 53 |
Section 8.4 | Vesting of Accounts | 54 |
Article IX. | LOANS TO MEMBERS | 54 |
Section 9.1 | Loan Program | 54 |
Section 9.2 | Certain Conditions | 55 |
Section 9.3 | Certain Standards and Requirements | 56 |
Section 9.4 | Default and Collection | 57 |
Section 9.5 | Deceased Member | 58 |
Article X. | WITHDRAWALS DURING EMPLOYMENT | 58 |
Section 10.1 | Withdrawals | 58 |
Section 10.2 | Hardship Withdrawals | 60 |
Section 10.3 | Time and Form of Withdrawal Distributions | 63 |
Section 10.4 | Other Withdrawals | 63 |
Section 10.5 | HEART Act Reservist Withdrawals | 64 |
Section 10.6 | Qualified Reservist Withdrawals | 65 |
Article XI. | SETTLEMENT AFTER TERMINATION OF EMPLOYMENT | 65 |
Section 11.1 | In General | 65 |
Section 11.2 | Retirement or Disability | 66 |
Section 11.3 | Death | 67 |
Section 11.4 | Other Termination | 68 |
Section 11.5 | Value and Timing of Distributions | 69 |
Section 11.6 | Separate Accounting for Non-Vested Amounts | 71 |
Section 11.7 | Disposition of Non-Vested Amounts | 72 |
Section 11.8 | Treatment of Forfeited Amounts | 73 |
Section 11.9 | Recrediting of Forfeited Amounts | 73 |
Section 11.10 | Minimum Distribution Requirements | 73 |
Section 11.11 | Rollovers to Other Plans or IRAs | 80 |
Section 11.12 | Unclaimed Accounts | 82 |
Section 11.13 | Notice Regarding Forms of Payment | 84 |
Article XII. | COMMITTEES; FIDUCIARY RESPONSIBILITY; CLAIMS | 85 |
Section 12.1 | Committee | 85 |
Section 12.2 | Fiduciary Responsibility | 85 |
Section 12.3 | Committee Power and Rules | 86 |
Section 12.4 | Reliance | 87 |
Section 12.5 | Indemnification | 88 |
Section 12.6 | Claims | 88 |
Section 12.7 | Exhaustion of Remedies and Limitation of Actions | 90 |
Article XIII. | TRUST AGREEMENT | 90 |
Article XIV. | TOP‑HEAVY PLAN REQUIREMENTS | 91 |
Section 14.1 | Definitions | 91 |
Section 14.2 | Determination of Top‑Heavy Status | 94 |
Section 14.3 | Top‑Heavy Plan Requirements | 95 |
Section 14.4 | Minimum Vesting Requirement | 95 |
Section 14.5 | Minimum Contribution Requirement | 95 |
Section 14.6 | Coordination With Other Plans | 97 |
Section 14.7 | Actuarial Assumptions | 98 |
Section 14.8 | Construction | 98 |
Article XV. | ESOP PROVISIONS | 98 |
Section 15.1 | ESOP Feature | 98 |
Section 15.2 | Borrowing to Purchase Eaton Shares | 99 |
Section 15.3 | Release of Shares from Suspense Accounts | 101 |
Section 15.4 | Members Right to Diversify | 106 |
Section 15.5 | Appraisal Requirement If Employer Securities Not Readily Tradable | 107 |
Section 15.6 | Voting Rights | 108 |
Section 15.7 | Tenders and Exchanges | 108 |
Section 15.8 | Distribution of Company Contributions | 108 |
Section 15.9 | Rights to Put Eaton Shares | 109 |
Section 15.10 | Restrictions on Transfer of Eaton Shares | 112 |
Article XVI. | ADMINISTRATIVE COSTS | 112 |
Article XVII. | NON‑ALIENATION OF BENEFITS | 113 |
Article XVIII. | NOTICES | 113 |
Article XIX. | AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN | 114 |
Section 19.1 | Reservation of Right to Amend | 114 |
Section 19.2 | Retroactivity | 114 |
Section 19.3 | Termination | 114 |
Section 19.4 | Provision Against Diversion; Exclusive Benefit | 115 |
Article XX. | PLAN MERGERS AND CONSOLIDATIONS; TERMS | 116 |
Section 20.1 | Merger or Consolidation | 116 |
Section 20.2 | Terms | 117 |
Section 20.3 | Transfer From Stanley Aviation Corporation 401K Plan and Trust | 117 |
Section 20.4 | Merger of EMC Engineers, Inc. 401(k) Plan | 119 |
Section 20.5 | Merger of Wright Line LLC 401(k) Plan | 122 |
Section 20.6 | Merger of CopperLogic, Inc. 401(k) Plan & Trust | 123 |
Section 20.7 | Merger of E. A. Pederson Company 401(k) Plan | 125 |
Section 20.8 | Merger of Cooper Retirement Savings and Stock Ownership Plan | 129 |
Article XXI. | MISCELLANEOUS | 134 |
Section 21.1 | Incapacity | 134 |
Section 21.2 | Limitation of Rights | 135 |
Section 21.3 | No Right to Employment | 135 |
Section 21.4 | Rights Relating to the Trust | 135 |
Section 21.5 | Limitation on Participation by Persons in Foreign Countries | 135 |
Section 21.6 | Uniformed Services | 136 |
Section 21.7 | Profit‑Sharing Plan Feature | 136 |
Section 21.8 | Miscellaneous Investment Proceeds | 136 |
Section 21.9 | Election of Former Vesting Schedule | 137 |
Section 21.10 | Issuance of Eaton Shares | 138 |
Section 21.11 | Leased Employee | 138 |
Section 21.12 | Applicable Law and Forum Selection | 139 |
Section 21.13 | Correction of Plan Failures | 140 |
Section 21.14 | Application of Windsor Decision | 140 |
Article XXII. | TRANSFER OF FUNDS; ROLLOVERS | 140 |
Section 22.1 | Transfer from Other Qualified Plans | 140 |
Section 22.2 | Transfer to Other Qualified Plans | 141 |
Section 22.3 | Rollover Contributions | 141 |
Article XXIII. | SAVINGS PLAN INDIVIDUAL RETIREMENT ACCOUNT | 144 |
Section 23.1 | Definitions | 144 |
Section 23.2 | Deductible Employee Contributions | 144 |
Section 23.3 | Irrevocable Election of Deductible Contributions | 145 |
Section 23.4 | Valuation of Voluntary Deductible Account; Records | 146 |
Section 23.5 | Investment of Voluntary Deductible Accounts | 146 |
Section 23.6 | Withdrawals from Voluntary Deductible Account | 146 |
Section 23.7 | Administrative Costs | 148 |
Article XXIV. | EFFECTIVE DATES | 148 |
Section 24.1 | General | 148 |
Section 24.2 | Legal Compliance Effective Date Provisions | 148 |
APPENDIX A TRANSFEROR PLANS | A-1 | |
APPENDIX B COSAV MERGED PLANS AND PROTECTED BENEFITS | B-1 | |
APPENDIX C IAR ADDENDA FOR SUPPLEMENTAL CONTRIBUTIONS | C-1 | |
P = | The Member's vested interest in his Eaton Retirement Contributions Account on the date distribution is to be made. |
AB = | The balance of the Member's Eaton Retirement Contributions Account as of the Valuation Date immediately preceding the date distribution is to be made. |
D = | The amount of all prior distributions from the Member's Eaton Retirement Contributions Account. |
Vesting Percentage | Years of Vesting Service |
0 | 1 |
25 | 2 |
50 | 3 |
75 | 4 |
100 | 5 |
Vesting Percentage | Years of Vesting Service |
0 | 1 |
25 | 2 |
100 | 3 |
Vesting Percentage | Years of Vesting Service |
0 | 1 |
25 | 2 |
50 | 3 |
75 | 4 |
100 | 5 |
EATON CORPORATION | |
__________________, 2015 | By: |
Cleveland, Ohio |
Plan | Effective Date on which Assets and Liabilities transferred to the Plan |
(1) McGraw-Edison Savings and Sharing Plan | 07/01/86 |
(2) McGraw-Edison Profit Sharing Plan | 07/01/86 |
(3) Campbell Chain Profit-Sharing Plan | 07/01/86 |
(4) Turner Profit-Sharing Plan | 07/01/86 |
(5) McGraw-Edison Thrift Plan | 07/01/86 |
(6) McGraw-Edison Consolidated Retirement Plan | 07/01/86 (active employees only) |
(7) GATX Profit-Sharing Plan | 02/01/87 |
(8) Joy Manufacturing Company Savings Plan | 08/01/87 (Petroleum Equipment Group only) |
(9) Joy Manufacturing Company Savings Plan | 01/01/88 (Molded Rubber Products Group only) |
(10) Joy Manufacturing Company Savings Plan | 06/01/88 (Compressor Group only) |
(11) USD Plan | 04/01/88 |
(12) Champion Spark Plug Company Salaried Employees’ Deferred Savings Plan | 08/01/90 |
(13) Cameron Iron Works USA, Inc. Savings Investment Plan | 09/01/90 |
(14) Cooper Industries, Inc. Consolidated Retirement Plan | 12/31/91 |
(15) Auto Components, Inc. Profit Sharing Plan | 01/01/94 |
(16) Moog Automotive, Inc. Temperature Control Division 401(k) Plan | 01/01/94 |
(17) Moog Automotive, Inc. Temperature Control Division Profit Sharing Plan | 01/01/94 |
(18) Zanxx, Inc. 401(k) Salary Reduction Plan | 11/10/94 |
(19) Precision Universal Joint Hourly Profit Sharing Plan | 02/28/95 |
(20) Master Power, Inc. 401(k) Retirement Savings Plan | 07/01/97 |
(21) Rolero-Omega Voluntary Retirement Savings Plan and Trust | 07/01/97 |
(22) Thepitt Hourly Savings Plan | 08/31/98 (salaried employees only) |
(23) Neo-Ray Products, Inc. 401(k) Profit Sharing Plan | 01/01/00 |
(24) Atlite Lighting Equipment, Inc. 401(k) Plan | 01/01/00 |
(25) Wheelock, Inc. Section 401(k) Profit Sharing Plan | 12/31/06 |
(26) Cannon Technologies Inc. Profit Sharing Plan | 12/31/06 |
(27) Cooper US, Inc. Profit Sharing Plan | 04/30/07 |
(28) Madah-Com Inc. 401(k) Profit Sharing Plan | 12/31/07 |
(29) iO Lighting 401(k) Plan | 12/31/07 |
(30) Roam Secure 401(k) Plan | 06/30/08 |
(31) GS Metals Corp Retirement Savings Plan | 01/01/09 |
(32) Sure Power, Inc. 401(k) Profit Sharing Plan | 01/01/09 |
(33) MTL Incorporated 401(k) Profit Sharing Plan | 01/01/09 |
01/01/12 | |
(34) Martek Power Retirement Savings Plan | |
1. | Merger of the Wheelock, Inc. Section 401(k) Profit Sharing Plan |
a. | Active Participants as of December 31, 2006, in the Wheelock, Inc. Section 401(k) Profit Sharing Plan were 100% vested in their accrued employer contributions upon the merger into this Plan. |
b. | Active Participants in the Wheelock, Inc. Section 401(k) Profit Sharing Plan who had three or more Years of Service as of December 31, 2006 are 100% vested in all future Company Retirement Contributions made under the Plan. |
c. | Future Company Retirement Contributions for all active Participants in the Wheelock, Inc. Section 401(k) Profit Sharing Plan who had less than three Years of Service as of December 31, 2006, are subject to the vesting schedule under this Plan. |
d. | All years of service that a participant accrued under the Wheelock, Inc. Section 401(k) Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. |
e. | The Normal Retirement Age for those Participants with an Account Balance as of December 31, 2006, in the Wheelock, Inc. Section 401(k) Profit Sharing Plan will be age 60 under this Plan. |
2. | Merger of the Cannon Technologies Inc. Profit Sharing Plan |
a. | Active Participants as of December 31, 2006, in the Cannon Technologies Inc. Profit Sharing Plan are 100% vested in their accrued employer contributions upon the merger into this Plan. |
b. | Active Participants in the Cannon Technologies Inc. Profit Sharing Plan who had three or more Years of Service as of December 31, 2006, are 100% vested in all future Company Retirement Contributions made under the Plan. |
c. | Future Company Retirement Contributions, for all active Participants in the Cannon Technologies Inc. Profit Sharing Plan who had less than three Years of Service as of December 31, 2006, are subject to the vesting schedule under this Plan. |
d. | All years of service that a participant accrued under the Cannon Technologies Inc. Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. |
3. | Merger of the Cooper US, Inc. Profit Sharing Plan |
a. | Active Participants as of April 30, 2007, in the Cooper US, Inc. Profit Sharing Plan, are 100% vested in their accrued employer matching contributions upon the merger into this Plan. |
b. | All years of service that a participant has accrued under the Cooper US, Inc. Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. Furthermore, there shall be no reduction in accrued years of service that may result from changes in the plan year, vesting computation period, and vesting computation method. |
c. | Accrued non-elective contributions and Future Company Retirement Contributions for all active participants in the Cooper US, Inc. Profit Sharing Plan as of April 30, 2007, will be subject to the vesting schedule under this Plan. |
d. | Participants with an Account Balance as of April 30, 2007, in the Cooper US, Inc. Profit Sharing Plan shall become 100% vested in all Employer contributions under this Plan the first of the month following attainment of age 55. |
4. | Merger of the Madah-com Inc. 401(k) Profit Sharing Plan |
a. | Active participants as of December 31, 2007, in the Madah-Com Inc. 401(k) Profit Sharing Plan, are 100% vested in their accrued employer matching contributions upon the merger into this Plan. |
b. | Accrued non-elective contributions and Future Company Retirement Contributions for all active participants in the Madah-Com Inc. 401(k) Profit Sharing Plan as of December 31, 2007, are subject to the vesting schedule under this Plan. |
c. | All years of service that a participant has accrued under the Madah-Com Inc. 401(k) Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. |
5. | Merger of the iO Lighting 401(k) Plan |
a. | All years of service that a participant has accrued under the iO Lighting 401(k) Plan will be recognized for purposes of determining a Member’s vested interest under this Plan. |
6. | Merger of the Roam Secure 401(k) Plan |
a. | All years of service that a participant has accrued under the Roam Secure 401(k) Plan will be recognized for purposes of determining a Member’s vested interest under this Plan. |
7. | Merger of the GS Metals Corp Retirement Savings Plan |
a. | Active Participants as of December 31, 2008, in the GS Metals Corp Retirement Savings Plan were 100% vested in their accrued employer matching contributions upon the merger into this Plan. |
b. | All years of service that a participant has accrued under the GS Metals Corp Retirement Savings Plan will be recognized for purposes of determining a Member’s vested interest in future Company Retirement Contributions under this Plan. Furthermore, there shall be no reduction in accrued years of service that may result from changes in the plan year, vesting computation period, and vesting computation method. |
c. | The normal retirement age for all former participants of the GS Metals Corp Retirement Savings Plan will be the later of age 55 or the fifth anniversary of the participant’s Employment Commencement Date. |
8. | Merger of the Sure Power, Inc. 401(k) Profit Sharing Plan |
a. | Active Participants as of December 31, 2008, in the Sure Power, Inc. 401(k) Profit Sharing Plan were 100% vested in their accrued employer nonelective contributions upon the merger into this Plan. |
b. | Active Participants in the Sure Power, Inc. 401(k) Profit Sharing Plan who had three or more Years of Service as of December 31, 2008 are 100% vested in all future Company Retirement Contributions made under the Plan. |
c. | Future Company Retirement Contributions for all active Participants in the Sure Power, Inc. 401(k) Profit Sharing Plan who had less than three Years of Service as of December 31, 2008, are subject to the vesting schedule under this Plan. |
d. | All years of service that a participant accrued under the Sure Power, Inc. 401(k) Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. |
9. | Merger of the MTL Incorporated 401(k) Profit Sharing Plan |
a. | Active Participants as of December 31, 2008, in the MTL Incorporated 401(k) Profit Sharing Plan were 100% vested in their accrued employer matching contributions upon the merger into this Plan. |
b. | The accrued nonelective contributions of active participants as of December 31, 2008, in the MTL Incorporated 401(k) Profit Sharing Plan continue to vest according the vesting schedule defined under the MTL Incorporated 401(k) Profit Sharing Plan |
c. | Active Participants in the MTL Incorporated 401(k) Profit Sharing Plan who had three or more Years of Service as of December 31, 2008 will continue to vest according to the nonelective vesting schedule as defined under the MTL Incorporated 401(k) Profit Sharing Plan for purposes of future Company Retirement Contributions made under the Plan. |
d. | Future Company Retirement Contributions for all active Participants in the MTL Incorporated 401(k) Profit Sharing Plan who had less than three Years of Service as of December 31, 2008, are subject to the vesting schedule under this Plan. |
e. | All years of service that a participant accrued under the MTL Incorporated 401(k) Profit Sharing Plan is recognized for purposes of determining a Member’s vested interest under this Plan. |
10. | Merger of the Martek Power Retirement Savings Plan |
a. | All years of service that a participant accrued under the terms of the Martek Power Retirement Savings Plan (“Martek Plan”) as of December |
b. | The accrued Matching Contributions in the Martek Plan of active participants as of the Martek Date continue to vest according to the vesting schedule defined under the Martek Plan as of the Martek Date. |
c. | All Matching Contributions to the Plan occurring after the Martek Date on behalf of all former Martek Plan participants will be 100% vested at all times. |
d. | The accrued Nonelective Contributions in the Martek Plan of active participants as of the Martek Date, continue to vest according to the vesting schedule defined under the Martek Plan as of the Martek Date. |
e. | Active participants with three or more years of service under the terms of the Martek Plan as of the Martek Date, continue to vest according to the Nonelective Contribution vesting schedule as defined under the Martek Plan as of the Martek Date for purposes of Company Retirement Contributions made under the Plan. |
f. | All Company Retirement Contributions to the Plan occurring after the Martek Date are subject to the vesting schedule specified under the Plan, for those former Martek Plan participants with less than three years of service under the terms of the Martek Plan as of the Martek Date. |
(1) | Company Retirement Contributions. The term “Company Retirement Contributions” shall mean the profit sharing contributions made to the Plan in accordance with the provisions of an IAR Addendum. |
(2) | IAR Account. The term "IAR Account" shall mean the separate account to which the Company Retirement Contributions are allocated and credited in accordance with the provisions of an Addendum. |
(3) | Participating Unit. The term "Participating Unit" shall mean an employment unit or facility named in an Addendum with respect to which Company Retirement Contributions are made on behalf of a Member. |
A. | NAME OF PARTICIPATING UNIT: |
B. | COMPANY RETIREMENT CONTRIBUTIONS: |
1. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage |
2. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who did not elect retiree medical coverage |
3. | Active Members on October 1, 1989, who had not attained age 50 on December 31, 1989 |
A. | NAME OF PARTICIPATING UNIT: |
B. | COMPANY RETIREMENT CONTRIBUTIONS: |
1. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage |
2. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who did not select retiree medical coverage |
3. | Active Members on October 1, 1989, who had not attained age 50 on December 31, 1989 |
A. | NAME OF PARTICIPATING UNIT: |
B. | COMPANY RETIREMENT CONTRIBUTIONS: |
1. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage |
2. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who did not elect retiree medical coverage |
3. | Active Members on October 1, 1989, who had not attained age 50 on December 31, 1989 |
A. | NAME OF PARTICIPATING UNIT: |
B. | COMPANY RETIREMENT CONTRIBUTIONS: |
1. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who elected retiree medical coverage |
2. | Active Members on October 1, 1989, who attained at least age 50 on December 31, 1989 and who did not elect retiree medical coverage |
3. | Active Members on October 1, 1989, who had not attained age 50 on December 31, 1989 |
ARTICLE I Definitions | 2 | |
1.1 | Plan Definitions | 2 |
1.2 | Interpretation | 6 |
ARTICLE II Service | 7 | |
2.1 | Definitions | 7 |
2.2 | Crediting of Hours of Service | 7 |
2.3 | Crediting of Continuous Service | 7 |
2.4 | Eligibility Service | 8 |
2.5 | Vesting Service | 8 |
ARTICLE III Eligibility | 9 | |
3.1 | Eligibility | 9 |
3.2 | Transfers of Employment | 9 |
3.3 | Reemployment | 9 |
3.4 | Notification Concerning New Eligible Employees | 9 |
3.5 | Effect and Duration | 10 |
ARTICLE IV Tax‑deferred contributions | 11 | |
4.1 | Tax-Deferred Contributions | 11 |
4.2 | Amount of Tax‑Deferred Contributions | 11 |
4.3 | Changes in Reduction Authorization | 11 |
4.4 | Suspension of Tax-Deferred Contributions | 11 |
4.5 | Resumption of Tax-Deferred Contributions | 12 |
4.6 | Delivery of Tax-Deferred Contributions | 12 |
4.7 | Vesting of Tax-Deferred Contributions | 12 |
4.8 | Catch-Up Contributions | 12 |
ARTICLE V After‑tax and rollover contributions | 13 | |
5.1 | After‑Tax Contributions | 13 |
5.2 | Amount of After‑Tax Contributions by Payroll Withholding | 13 |
5.3 | Changes in Payroll Withholding Authorization | 13 |
5.4 | Suspension of After‑Tax Contributions by Payroll Withholding | 13 |
5.5 | Resumption of After‑Tax Contributions by Payroll Withholding | 14 |
5.6 | Rollover Contributions | 14 |
5.7 | Delivery of After-Tax Contributions | 15 |
5.8 | Vesting of After-Tax Contributions and Rollover Contributions | 15 |
5.9 | Overall Limitation on Tax-Deferred Contributions and After-Tax Contributions | 15 |
ARTICLE VI Employer contributions | 16 | |
6.1 | No Employer Contributions | 16 |
ARTICLE VII Limitations on contributions | 17 | |
7.1 | Definitions | 17 |
7.2 | Code Section 402(g) Limit | 19 |
7.3 | Distribution of Excess Deferrals | 20 |
7.4 | Limitation on Tax‑Deferred Contributions of Highly Compensated Employees | 21 |
7.5 | Determination and Distribution of Excess Tax‑Deferred Contributions | 22 |
7.6 | Limitation on Certain Contributions, Including After‑Tax Contributions of Highly Compensated Employees | 23 |
7.7 | Determination and Forfeiture or Distribution of Excess Contributions | 24 |
7.8 | Miscellaneous ADP/ACP Testing Provisions | 25 |
7.9 | Determination of Income or Loss | 25 |
7.10 | Code Section 415 Limitations on Crediting of Contributions and Forfeitures | 26 |
7.11 | Coverage Under Other Qualified Defined Contribution Plan | 26 |
7.12 | Correction Provision | 26 |
7.13 | Scope of Limitations | 27 |
ARTICLE VIII Trust funds and separate accounts | 28 | |
8.1 | General Fund | 28 |
8.2 | Investment Funds | 28 |
8.3 | Loan Investment Fund | 28 |
8.4 | Income on Trust | 29 |
8.5 | Separate Accounts | 29 |
8.6 | Sub-Accounts | 29 |
8.7 | Voting of Employer Stock and Procedures Regarding Tender Offers | 29 |
ARTICLE IX Life insurance contracts | 30 | |
9.1 | No Life Insurance Contracts | 30 |
ARTICLE X Deposit and investment of contributions | 31 | |
10.1 | Future Contribution Investment Elections | 31 |
10.2 | Deposit of Contributions | 31 |
10.3 | Fund Transfers | 31 |
10.4 | Investment of Employer Contributions | 31 |
10.5 | Diversification of Employer Stock | 32 |
ARTICLE XI Crediting and valuing separate accounts | 33 | |
11.1 | Crediting Separate Accounts | 33 |
11.2 | Valuing Separate Accounts | 33 |
11.3 | Plan Valuation Procedures | 33 |
11.4 | Finality of Determinations | 34 |
11.5 | Notification | 34 |
ARTICLE XII loans | 35 | |
12 | Application for Loan | 35 |
12.2 | Reduction of Account Upon Distribution | 35 |
12.3 | Requirements to Prevent a Taxable Distribution | 35 |
12.4 | Administration of Loan Investment Fund | 36 |
12.5 | Default | 36 |
12.6 | Special Rules Applicable to Loans | 37 |
12.7 | Loans Granted Prior to Amendment or Upon Plan Merger | 37 |
ARTICLE XIII Withdrawals while employed | 38 | |
13.1 | Withdrawals of After-Tax Contributions | 38 |
13.2 | Withdrawals of Rollover Contributions | 38 |
13.3 | Withdrawals of Tax-Deferred Contributions | 38 |
13.4 | Limitations on Withdrawals Other than Hardship Withdrawals | 38 |
13.5 | Conditions and Limitations on Hardship Withdrawals | 38 |
13.6 | Order of Withdrawal from a Participant's Sub‑Accounts | 40 |
13.7 | Restrictions on Withdrawal of Certain Transferred Amounts | 40 |
13.8 | HEART Act Reservist Withdrawals | 40 |
13.9 | Qualified Reservist Distributions | 41 |
ARTICLE XIV Termination of employment and settlement date | 42 | |
14.1 | Termination of Employment and Settlement Date | 42 |
ARTICLE XV distributions | 43 | |
15.1 | Distributions to Participants | 43 |
15.2 | Distributions to Beneficiaries | 43 |
15.3 | Cash Outs and Participant Consent | 43 |
15.4 | Required Commencement of Distribution | 44 |
15.5 | Minimum Distribution Requirements | 44 |
15.6 | Reemployment of a Participant | 48 |
15.7 | Restrictions on Alienation | 48 |
15.8 | Facility of Payment | 49 |
15.9 | Unclaimed Accounts | 49 |
15.10 | Distribution Pursuant to Qualified Domestic Relations Orders | 50 |
15.11 | Default to Discontinue 2009 RMDs | 50 |
ARTICLE XVI Form of payment | 51 | |
16.1 | Form of Payment | 51 |
16.2 | Direct Rollover | 51 |
16.3 | Notice Regarding Form of Payment | 52 |
16.4 | Distribution in the Form of Employer Stock | 52 |
ARTICLE XVII beneficiaries | 54 | |
17.1 | Designation of Beneficiary | 54 |
17.2 | Spousal Consent Requirements | 54 |
ARTICLE XVIII administration | 55 | |
18.1 | Committee | 55 |
18.2 | Fiduciary Responsibility | 55 |
18.3 | Committee Power and Rules | 56 |
18.4 | Reliance | 56 |
18.5 | Indemnification | 56 |
19 | Claims Review Procedure | 57 |
18.7 | Exhaustion of Remedies and Limitation of Actions | 58 |
18.8 | Qualified Domestic Relations Orders | 58 |
ARTICLE XIX Amendment and termination | 59 | |
19.1 | Amendment | 59 |
19.2 | Limitation on Amendment | 59 |
19.3 | Termination | 59 |
19.4 | Reorganization | 60 |
19.5 | Withdrawal of an Employer | 60 |
ARTICLE XX Adoption by related companies | 62 | |
20.1 | Adoption by Related Companies | 62 |
20.2 | Extension of Coverage | 62 |
20.3 | Effective Plan Provisions | 62 |
ARTICLE XXI Miscellaneous provisions | 63 | |
21.1 | No Commitment as to Employment | 63 |
21.2 | Benefits | 63 |
21.3 | No Guarantees | 63 |
21.4 | Expenses | 63 |
21.5 | Precedent | 63 |
21.6 | Duty to Furnish Information | 63 |
21.7 | Withholding | 64 |
21.8 | Merger, Consolidation, or Transfer of Plan Assets | 64 |
21.9 | Correction of Plan Failures | 64 |
21.10 | Condition on Employer Contributions | 64 |
21.11 | Return of Contributions to an Employer | 64 |
21.12 | Validity of Plan and Forum Selection | 65 |
21.13 | Trust Agreement | 65 |
21.14 | Parties Bound | 65 |
21.15 | Application of Certain Plan Provisions | 65 |
21.16 | Leased Employees | 65 |
21.17 | Transferred Funds | 66 |
21.18 | Certain Provisions Not Applicable to Bargaining Units | 66 |
21.19 | Uniformed Services | 66 |
21.20 | Transfer from Other Qualified Plans | 66 |
21.21 | Transfer to Other Qualified Plans | 67 |
21.22 | Issuance of Employer Stock | 67 |
21.23 | Application of Windsor Decision | 67 |
21.24 | Miscellaneous Investment Proceeds | 68 |
ARTICLE XXII MERGER OF COOPER INDIVIDUAL ACCOUNT RETIREMENT PLAN FOR BARGAINING UNIT EMPLOYEES | 69 | |
22.1 | Merger of Cooper Individual Account Retirement Plan for Bargaining Unit Employees | 69 |
22.2 | Separate Accounts | 69 |
22.3 | Continuing Provisions | 69 |
ARTICLE XXIII MERGER OF SHAPER LIGHTING EMPLOYEE PROFIT SHARING AND 401(k) PLAN & TRUST | 70 | |
23 | Merger of Shaper Lighting Employee Profit Sharing and 401(k) Plan & Trust | 70 |
23.2 | Separate Accounts | 70 |
23.3 | Continuing Provisions | 70 |
ARTICLE XXIV EFFECTIVE DATE | 71 | |
24.1 | General | 71 |
24.2 | Legal Compliance Effective Date Provisions | 71 |
1.1 | Plan Definitions |
(a) | The "determination year" means the Plan Year. |
(b) | The "look back year" means the 12-month period immediately preceding the determination year. |
(c) | An Employee's "compensation" shall mean his compensation as defined in Section 7.10. |
1.2 | Interpretation |
2.1 | Definitions |
(a) | The "continuous service" of an employee means the service credited to him in accordance with the provisions of Section 2.3 of the Plan. |
(b) | The "employment commencement date" of an employee means the date he first completes an Hour of Service. |
(c) | A "maternity/paternity absence" means a person's absence from employment with an Employer or a Related Company because of the person's pregnancy, the birth of the person's child, the placement of a child with the person in connection with the person's adoption of the child, or the caring for the person's child immediately following the child's birth or adoption. A person's absence from employment will not be considered a maternity/paternity absence unless the person furnishes the Administrator such timely information as may reasonably be required to establish that the absence was for one of the purposes enumerated in this paragraph and to establish the number of days of absence attributable to such purpose. |
(d) | The "reemployment commencement date" of an employee means the first date following a severance date on which he again completes an Hour of Service. |
(e) | The "severance date" of an employee means the earlier of (i) the date on which he retires, dies, or his employment with an Employer and all Related Companies is otherwise terminated, or (ii) the first anniversary of the first date of a period during which he is absent from work with an Employer and all Related Companies for any other reason; provided, however, that if he terminates employment with or is absent from work with an Employer and all Related Companies on account of service with the armed forces of the United States, he shall not incur a severance date if he is eligible for reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 and he returns to work with an Employer or a Related Company within the period during which he retains such reemployment rights. |
2.2 | Crediting of Hours of Service |
2.3 | Crediting of Continuous Service |
2.4 | Eligibility Service |
2.5 | Vesting Service |
3.1 | Eligibility |
3.2 | Transfers of Employment |
3.3 | Reemployment |
3.4 | Notification Concerning New Eligible Employees |
3.5 | Effect and Duration |
4.1 | Tax-Deferred Contributions |
4.2 | Amount of Tax‑Deferred Contributions |
4.3 | Changes in Reduction Authorization |
4.4 | Suspension of Tax-Deferred Contributions |
4.5 | Resumption of Tax-Deferred Contributions |
4.6 | Delivery of Tax-Deferred Contributions |
4.7 | Vesting of Tax-Deferred Contributions |
5.1 | After‑Tax Contributions |
5.2 | Amount of After‑Tax Contributions by Payroll Withholding |
5.3 | Changes in Payroll Withholding Authorization |
5.4 | Suspension of After‑Tax Contributions by Payroll Withholding |
5.5 | Resumption of After‑Tax Contributions by Payroll Withholding |
5.6 | Rollover Contributions |
(a) | The Plan will accept a direct rollover of an eligible rollover distribution from (a) a qualified plan described in Section 401(a) or Section 403(a) of the Code, (b) an annuity contract described in Section 403(b) of the Code, and (c) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. |
(b) | The Plan will accept a participant contribution of an eligible rollover distribution from (a) a qualified plan described in Section 401(a) or Section 403(a) of the Code, (b) an annuity contract described in Section 403(b) of the Code and (c) an eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state. |
(c) | The Plan will accept a participant rollover contribution of the portion of a distribution from an individual retirement account or annuity described in Section 408(a) or Section 408(b) of the Code that is eligible to be rolled over and would otherwise be includible in gross income. |
5.7 | Delivery of After-Tax Contributions |
5.8 | Vesting of After-Tax Contributions and Rollover Contributions |
5.9 | Overall Limitation on Tax-Deferred Contributions and After-Tax Contributions |
6.1 | No Employer Contributions |
7.1 | Definitions |
(a) | The "actual deferral percentage" with respect to an Eligible Employee for a particular Plan Year means the ratio of the Tax‑Deferred Contributions made on his behalf for the Plan Year to his test compensation for the Plan Year, except that, to the extent permitted by regulations issued under Section 401(k) of the Code, the Sponsor may elect to take into account in computing the numerator of each Eligible Employee's actual deferral percentage the qualified matching contributions made to the Plan on his behalf for the Plan Year; provided, however, that contributions made on a Participant's behalf for a Plan Year shall be included in determining his actual deferral percentage for such Plan Year only if the contributions are made to the Plan prior to the end of the 12-month period immediately following the Plan Year to which the contributions relate. The determination and treatment of the actual deferral percentage amounts for any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. |
(b) | The "aggregate limit" means the sum of (i) 125 percent of the greater of the average contribution percentage for eligible participants other than Highly Compensated Employees for the Plan Year or the average actual deferral percentage for Eligible Employees other than Highly Compensated Employees for the Plan Year and (ii) the lesser of 200 percent or two plus the lesser of such average contribution percentage or average actual deferral percentage, or, if it would result in a larger aggregate limit, the sum of (iii) 125 percent of the lesser of the average contribution percentage for eligible participants other than Highly Compensated Employees for the Plan Year or the average actual deferral percentage for Eligible Employees other than Highly Compensated Employees for the Plan Year and (iv) the lesser of 200 percent or two plus the greater of such average contribution percentage or average actual deferral percentage. |
(c) | The "annual addition" with respect to a Participant for a limitation year means the sum of the Tax-Deferred Contributions, Employer Contributions, and After-Tax Contributions allocated to his Separate Account for the limitation year (including any excess contributions that are distributed pursuant to this Article), the employer contributions, employee contributions, and forfeitures allocated to his accounts for the limitation year under any other qualified defined contribution plan (whether or not terminated) maintained by an Employer or a Related Company concurrently with the Plan, and amounts described in Sections 415(l)(2) and 419A(d)(2) of the Code allocated to his account for the limitation year. |
(d) | The "Code Section 402(g) limit" means the dollar limit imposed by Section 402(g)(1) of the Code or established by the Secretary of the Treasury pursuant to Section 402(g)(5) of |
(e) | The "contribution percentage" with respect to an eligible participant for a particular Plan Year means the ratio of the sum of the matching contributions made to the Plan on his behalf and the After-Tax Contributions made by him for the Plan Year to his test compensation for such Plan Year, except that, to the extent permitted by regulations issued under Section 401(m) of the Code, the Sponsor may elect to take into account in computing the numerator of each eligible participant's contribution percentage the Tax‑Deferred Contributions made to the Plan on his behalf for the Plan Year; provided, however, that any Tax-Deferred Contributions and/or qualified matching contributions that were taken into account in computing the numerator of an eligible participant's actual deferral percentage may not be taken into account in computing the numerator of his contribution percentage; and provided, further, that contributions made by or on a Participant's behalf for a Plan Year shall be included in determining his contribution percentage for such Plan Year only if the contributions are made to the Plan prior to the end of the 12-month period immediately following the Plan Year to which the contributions relate. The determination and treatment of the contribution percentage amounts for any Participant shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury. |
(f) | An "elective contribution" means any employer contribution made to a plan maintained by an Employer or any Related Company on behalf of a Participant in lieu of cash compensation pursuant to his written election to defer under any qualified CODA as described in Section 401(k) of the Code, any simplified employee pension cash or deferred arrangement as described in Section 402(h)(1)(B) of the Code, any eligible deferred compensation plan under Section 457 of the Code, or any plan as described in Section 501(c)(18) of the Code, and any contribution made on behalf of the Participant by an Employer or a Related Company for the purchase of an annuity contract under Section 403(b) of the Code pursuant to a salary reduction agreement. |
(g) | An "eligible participant" means any Employee who is eligible to make After-Tax Contributions or to have Tax-Deferred Contributions made on his behalf (if Tax-Deferred Contributions are taken into account in computing contribution percentages) or to participate in the allocation of matching contributions (including qualified matching contributions). |
(h) | An "excess deferral" with respect to a Participant means that portion of a Participant's Tax‑Deferred Contributions that when added to amounts deferred under other plans or arrangements described in Sections 401(k), 408(k), or 403(b) of the Code, would exceed the Code Section 402(g) limit and is includable in the Participant's gross income under Section 402(g) of the Code. |
(i) | A "limitation year" means the Plan Year. |
(j) | A "matching contribution" means any employer contribution allocated to an Eligible Employee's account under the Plan or any other plan of an Employer or a Related Company solely on account of elective contributions made on his behalf or employee contributions made by him. |
(k) | A "qualified matching contribution" means any matching contribution that is a qualified matching contribution as defined in regulations issued under Section 401(k) of the Code, is nonforfeitable when made, and is distributable only as permitted in regulations issued under Section 401(k) of the Code. In no event shall the portion of any matching contribution designated as a qualified matching contribution hereunder exceed the Eligible Employee's "QMAC limit" for the Plan Year. The "QMAC limit" applicable to an Eligible Employee means the greatest of (1) 5% of the Eligible Employee's Compensation, (2) the Eligible Employee's Tax-Deferred Contributions for the Plan Year, or (3) 2 times the "representative match rate" multiplied by the Eligible Employee's Tax-Deferred Contributions for the Plan Year. The "representative match rate" means the lowest "match rate" for any Eligible Employee who is not a Highly Compensated Employee for the Plan Year and who is in either (1) a determination group consisting of 1/2 of all Eligible Employees during the Plan Year who are not Highly Compensated Employees for the Plan Year or (2) the group consisting of all Eligible Employees who are employed by an Employer or a Related Company on the last day of the Plan and who are not Highly Compensated Employees for the Plan Year, whichever would provide the greater representative rate. A "match rate" means the Matching Contributions made on behalf of an Eligible Employee for the Plan Year divided by the Eligible Employee's Tax-Deferred Contributions for the Plan Year; provided, however, that if Matching Contributions are made at different rates for different levels of Compensation, the "match rate" shall be determined assuming Tax-Deferred Contributions equal to 6% of Compensation. |
(l) | The "test compensation" of an Eligible Employee for a Plan Year means compensation as defined in Section 414(s) of the Code and regulations issued thereunder, limited, however, to $200,000 (subject to adjustment annually as provided in Section 401(a)(17)(B) and Section 415(d) of the Code; provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for Plan Years beginning in such calendar year). If the test compensation of a Participant is determined over a period of time that contains fewer than 12 calendar months, then the annual compensation limitation described above shall be adjusted with respect to that Participant by multiplying the annual compensation limitation in effect for the Plan Year by a fraction the numerator of which is the number of full months in the period and the denominator of which is 12; provided, however, that no proration is required for a Participant who is covered under the Plan for less than one full Plan Year if the formula for allocations is based on Compensation for a period of at least 12 months. |
7.2 | Code Section 402(g) Limit |
7.3 | Distribution of Excess Deferrals |
7.4 | Limitation on Tax‑Deferred Contributions of Highly Compensated Employees |
(d) | a percentage that is equal to 125 percent of the average actual deferral percentage for all other Eligible Employees for the Plan Year; or |
(e) | a percentage that is not more than 200 percent of the average actual deferral percentage for all other Eligible Employees and that is not more than two percentage points higher than the average actual deferral percentage for all other Eligible Employees for the Plan Year. |
7.5 | Determination and Distribution of Excess Tax‑Deferred Contributions |
7.6 | Limitation on Certain Contributions, Including After‑Tax Contributions of Highly Compensated Employees |
(a) | a percentage that is equal to 125 percent of the average contribution percentage for all other eligible participants for the Plan Year; or |
(b) | a percentage that is not more than 200 percent of the average contribution percentage for all other eligible participants and that is not more than two percentage points higher than the average contribution percentage for all other eligible participants for the Plan Year. |
7.7 | Determination and Forfeiture or Distribution of Excess Contributions |
7.8 | Miscellaneous ADP/ACP Testing Provisions |
(a) | by comparing the average actual deferral percentage of all Eligible Employees who are Highly Compensated Employees for the Plan Year to the average actual deferral percentage for the Plan Year of those Eligible Employees who are not Highly Compensated Employees and who have satisfied the minimum age and service requirements under Code Section 410(a)(1); or |
(b) | separately with respect to Eligible Employees who have not satisfied the minimum age and service requirements under Code Section 410(a)(1) and Eligible Employees who have satisfied such minimum age and service requirements. |
(a) | by comparing the average contribution percentage of all eligible participants who are Highly Compensated Employees for the Plan Year to the average contribution percentage for the Plan Year of those eligible participants who are not Highly Compensated Employees and who have satisfied the minimum age and service requirements under Code Section 410(a)(1); or |
(b) | separately with respect to eligible participants who have not satisfied the minimum age and service requirements under Code Section 410(a)(1) and eligible participants who have satisfied such minimum age and service requirements. |
7.9 | Determination of Income or Loss |
7.10 | Code Section 415 Limitations on Crediting of Contributions and Forfeitures |
7.11 | Coverage Under Other Qualified Defined Contribution Plan |
7.12 | Correction Provision |
7.13 | Scope of Limitations |
8.1 | General Fund |
8.2 | Investment Funds |
8.3 | Loan Investment Fund |
8.4 | Income on Trust |
8.5 | Separate Accounts |
8.6 | Sub-Accounts |
8.7 | Voting of Employer Stock and Procedures Regarding Tender Offers |
9.1 | No Life Insurance Contracts |
10.1 | Future Contribution Investment Elections |
10.2 | Deposit of Contributions |
10.3 | Fund Transfers |
10.4 | Investment of Employer Contributions |
10.5 | Diversification of Employer Stock |
11.1 | Crediting Separate Accounts |
11.2 | Valuing Separate Accounts |
11.3 | Plan Valuation Procedures |
(a) | First, the value of the Trust Fund shall be determined by valuing all of the assets of the Trust Fund at fair market value. |
(b) | Next, the net increase or decrease in the value of the Trust Fund attributable to net income and all profits and losses, realized and unrealized, during the valuation period shall be determined on the basis of the valuation under paragraph (a) taking into account appropriate adjustments for contributions, loan payments, and transfers to and distributions, withdrawals, loans, and transfers from such Trust Fund during the valuation period. |
(c) | Finally, the net increase or decrease in the value of the Trust Fund shall be allocated among Separate Accounts in the Trust Fund in the ratio of the balance of the portion of such Separate Account in the Trust Fund as of the preceding Valuation Date less any distributions, withdrawals, loans, and transfers from such Separate Account balance in the Trust Fund since the Valuation Date to the aggregate balances of the portions of all Separate Accounts in the Trust Fund similarly adjusted, and each Separate Account in the Trust Fund shall be credited or charged with the amount of its allocated share. Notwithstanding the foregoing, the Administrator may adopt such accounting procedures as it considers appropriate and equitable to establish a proportionate crediting of net increase or decrease in the value of the Trust Fund for contributions, loan payments, and |
11.4 | Finality of Determinations |
11.5 | Notification |
12.1 | Application for Loan |
12.2 | Reduction of Account Upon Distribution |
12.3 | Requirements to Prevent a Taxable Distribution |
(d) | The interest rate on any loan to a Participant shall be a reasonable interest rate commensurate with current interest rates charged for loans made under similar circumstances by persons in the business of lending money. |
(e) | The amount of any loan to a Participant (when added to the outstanding balance of all other loans to the Participant from the Plan or any other plan maintained by an Employer or a Related Company) shall not exceed the lesser of: |
(i) | $50,000, reduced by the excess, if any, of the highest outstanding balance of any other loan to the Participant from the Plan or any other plan maintained by an Employer or a Related Company during the preceding 12-month period over the outstanding balance of such loans on the date a loan is made hereunder; or |
(ii) | 50 percent of the vested portions of the Participant's Separate Account and his vested interest under all other plans maintained by an Employer or a Related Company. |
(f) | The term of any loan to a Participant shall be no greater than five years, except in the case of a loan used to acquire any dwelling unit which within a reasonable period of time is to be used (determined at the time the loan is made) as a principal residence of the Participant. |
(g) | Except as otherwise permitted under Treasury Regulation, substantially level amortization shall be required over the term of the loan with payments made not less frequently than quarterly. |
12.4 | Administration of Loan Investment Fund |
12.5 | Default |
12.6 | Special Rules Applicable to Loans |
(a) | Minimum Loan Amount: A Participant may not request a loan for less than $1,000. |
(b) | Maximum Number of Outstanding Loans: A Participant may have no more than two loans outstanding, including no more than one real estate loan described in Section 12.6(c). A Participant with two outstanding loans may not apply for another loan until an existing loan is paid in full and may not refinance an existing loan or obtain an additional loan for the purpose of paying off an existing loan. |
(c) | Maximum Period for Real Estate Loans: The term of any loan to a Participant that is used to acquire any dwelling unit which within a reasonable period of time is to be used (determined at the time the loan is made) as a principal residence of the Participant shall be no greater than ten years. |
(d) | Pre-Payment Without Penalty: A Participant may pre-pay all or any part of the balance of any loan hereunder prior to the date it is due without penalty. |
(e) | Effect of Termination of Employment: Upon a Participant's termination of employment, a Participant may continue to make monthly loan payments, and the balance of any outstanding loan hereunder shall not become due and owing merely by reason of his termination of employment. |
(f) | Repayment by Spousal Beneficiary: If a Participant dies with an outstanding loan and with his surviving spouse as Beneficiary, the Beneficiary may repay the entire loan balance or may make payments with coupons in accordance with procedures established by the Committee. |
12.7 | Loans Granted Prior to Amendment or Upon Plan Merger |
13.1 | Withdrawals of After-Tax Contributions |
13.2 | Withdrawals of Rollover Contributions |
13.3 | Withdrawals of Tax-Deferred Contributions |
13.4 | Limitations on Withdrawals Other than Hardship Withdrawals |
13.5 | Conditions and Limitations on Hardship Withdrawals |
(g) | expenses previously incurred by or necessary for the Participant, the Participant's spouse, or any dependent of the Participant (as defined in Code Section 152, without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof) to obtain medical care deductible under Code Section 213(d), determined without regard to whether the expenses exceed any applicable income limit; |
(h) | costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant; |
(i) | payment of tuition, related educational fees, and room and board expenses for the next 12 months of post secondary education for the Participant, or the Participant's spouse, child, or other dependent (as defined in Code Section 152, without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof; |
(j) | payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage on the Participant's principal residence; |
(k) | payment of funeral or burial expenses for the Participant's deceased parent, spouse, child, or dependent (as defined in Code Section 152, without regard to subsection (d)(1)(B) thereof); or |
(l) | beginning January 1, 2007, expenses for the repair of damage to the Participant's principal residence that would qualify for a casualty loss deduction under Code Section 165 (determined without regard to whether the loss exceeds any applicable income limit). |
13.6 | Order of Withdrawal from a Participant's Sub‑Accounts |
13.7 | Restrictions on Withdrawal of Certain Transferred Amounts |
13.8 | HEART Act Reservist Withdrawals |
13.9 | Qualified Reservist Distributions |
14.1 | Termination of Employment and Settlement Date |
15.1 | Distributions to Participants |
15.2 | Distributions to Beneficiaries |
15.3 | Cash Outs and Participant Consent |
15.4 | Required Commencement of Distribution |
(a) | Unless a Participant elects a later date (with the failure of the Participant to file an application for distribution being treated as an election to postpone distribution), 60 days after the close of the Plan Year in which (i) the Participant's Normal Retirement Date occurs, (ii) the 10th anniversary of the year in which he commenced participation in the Plan occurs, or (iii) his Settlement Date occurs, whichever is latest; or |
(b) | the April 1 following the close of the calendar year in which he attains age 70 1/2, whether or not his Settlement Date has occurred, except that if a Participant is not a five‑percent owner (as defined in Section 416 of the Code) at any time during the five‑Plan‑Year period ending within the calendar year in which he attained age 70 1/2, distribution of such Participant's vested interest in his Separate Account shall, at the election of such Participant, commence no later than the April 1 following the close of the calendar year in which he attains age 70 ½ or retires, whichever is later (referred to herein as the Participant's "Required Beginning Date"). |
15.5 | Minimum Distribution Requirements |
(a) | General Rules. |
(1) | Precedence. The requirements of this Section will take precedence over any inconsistent provisions of the Plan. |
(2) | Requirements of Treasury Regulation Incorporated. All distributions required under this Section will be determined and made in accordance with the Treasury Regulation under Section 401(a)(9) of the Code. |
(3) | TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Section, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. |
(b) | Time and Manner of Distribution. |
(1) | Required Beginning Date. The Participant’s entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant’s Required Beginning Date. |
(2) | Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant’s entire interest will be distributed, or begin to be distributed, no later than as follows: |
(A) | If the Participant 's surviving spouse is the Participant’s sole designated beneficiary, then distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later. |
(B) | If the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, then distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. |
(C) | If there is no designated beneficiary as of September 30 of the year following the year of the Participant’s death, the Participant’s entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant 's death. |
(D) | If the Participant’s surviving spouse is the Participant’s sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 15.5(b)(2), other than Section 15.5(b)(2)(A), will apply as if the surviving spouse were the Participant. |
(3) | Forms of Distribution. Unless the Participant’s interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first distribution calendar year distributions will be made in accordance with Sections 15.5(c) and 15.5(d). If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements Section 401(a)(9) of the Code and the Treasury Regulation. |
(c) | Required Minimum Distribution During a Participant's Lifetime. |
(1) | Amount of Required Minimum Distribution for Each Distribution Calendar Year. During the Participant’s lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: |
(A) | the quotient obtained by dividing the Participant's account balance by the distribution period in the Uniform Lifetime Table set forth in Treasury Regulation Section 1.401(a)(9)-9, using the Participant’s age as of the Participant’s birthday in the distribution calendar year; or |
(B) | if the Participant’s sole designated beneficiary for the distribution calendar year is the Participant’s spouse, the quotient obtained by dividing the Participant’s account balance by the number in the Joint and Last Survivor Table set forth in Treasury Regulation Section 1.401(a)(9)-9, using the Participant’s and spouse’s attained ages as of the Participant’s and spouse’s birthdays in the distribution calendar year. |
(2) | Lifetime Required Minimum Distributions Continue Through Year of Participant’s Death. Required minimum distributions will be determined under this Section 15.5(c) beginning with the first distribution calendar year and up to and including the distribution calendar year that includes the Participant’s date of death. |
(d) | Required Minimum Distribution After Participant's Death. |
(1) | Death On or After Date Distributions Begin. |
(A) | Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by |
(i) | The Participant’s remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent calendar year following death. |
(ii) | If the Participant’s surviving spouse is the Participant’s sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant’s death using the surviving spouse’s age as of the spouse’s birthday in that year. For distribution calendar years after the year of the surviving spouse’s death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse’s birthday in the calendar year of the spouse’s death, reduced by one for each subsequent calendar year following death. |
(iii) | If the Participant’s surviving spouse is not the Participant’s sole designated beneficiary, the designated beneficiary’s remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant’s death, reduced by one for each subsequent calendar year following death. |
(B) | No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant’s death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant 's account balance by the Participant’s remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent calendar year following death. |
(A) | Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant’s death is the quotient obtained by dividing the Participant's account balance by the remaining life expectancy of the Participant’s designated beneficiary, determined as provided in Section 15.5(d)(1). |
(B) | No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated beneficiary as of September |
(C) | Death of Surviving Spouse Before Distributions to Surviving Spouse are Required to Begin. If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant’s sole designated beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 15.5(b)(2)(A), this Section 15.5(d)(2) will apply as if the surviving spouse were the Participant. |
(e) | Definitions. |
(1) | Designated beneficiary. The individual who is designated as the Beneficiary under Section1.1 and is the designated beneficiary under Section 401(a)(9) of the Code and Treasury Regulation Section 1.401(a)(9)-4. |
(2) | Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant’s death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date. For distributions beginning after the Participant’s death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 15.5(b)(2). The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that distribution calendar year. |
(3) | Life expectancy. Life expectancy as computed by use of the Single Life Table in Treasury Regulation Section 1.401(a)(9)-9. |
(4) | Participant’s account balance. The account balance as of the last valuation date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. |
(5) | Required Beginning Date. The date specified in Section 15.4(b). |
15.6 | Reemployment of a Participant |
15.7 | Restrictions on Alienation |
15.8 | Facility of Payment |
15.9 | Unclaimed Accounts |
(a) | Each Participant and/or each Beneficiary must file with the Committee from time to time in writing his address to which United States mail to him is to be sent and each change of such address. Any communication, statement or notice addressed to a Participant or Beneficiary at such last address filed with the Committee or if no address is filed with the Committee then at the last such address as shown on the Sponsor’s records will be binding on the Participant or Beneficiary for all purposes of the Plan. Neither the Plan nor any person acting on behalf of the Plan (including the Committee and the Trustee) shall be required to search for or locate a Participant or Beneficiary. |
(b) | Any other provision of the Plan to the contrary notwithstanding: an “Unclaimed Account” (as herein below defined) of a Participant or Beneficiary shall be forfeited and shall be used to reduce future Employer Contributions as though the Participant or |
15.10 | Distribution Pursuant to Qualified Domestic Relations Orders |
15.11 | Default to Discontinue 2009 RMDs |
16.1 | Form of Payment |
16.2 | Direct Rollover |
(m) | An "eligible retirement plan" means any of the following: (i) an individual retirement account described in Section 408(a) of the Code, (ii) an individual retirement annuity described in Section 408(b) of the Code , (iii) an annuity plan described in Section 403(a) of the Code that accepts rollovers, (iv) a qualified trust described in Section 401(a) of the Code that accepts rollovers, (v) an annuity contract described in Section 403(b) of the Code that accepts rollovers, (vi) an eligible plan under Section 457(b) of the Code that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for amounts transferred into such plan from the Plan, or (vii) effective for distributions made on or after January 1, 2008, a Roth IRA, as described in Section 408A of the Code, provided, that for distributions made prior to January 1, 2010, such rollover shall be subject to the limitations contained in Section 408A(c)(3)(B) of the Code. Notwithstanding the foregoing, the portion of a Participant's "eligible rollover distribution" that consists of his After-Tax Contributions may only be transferred to an individual retirement account or annuity described in Section 408(a) or (b) of the Code or to a qualified defined contribution plan described in Section 401(a) or 403(a) of the Code that agrees to |
(n) | An "eligible rollover distribution" means any distribution of all or any portion of the balance of a Participant's Separate Account; provided, however, that an eligible rollover distribution does not include the following: |
(1) | any distribution to the extent such distribution is required under Section 401(a)(9) of the Code, |
(2) | any distribution that is one of a series of substantially equal periodic payment made not less frequently than annually for the life or life expectancy of the "qualified distributee" or the joint lives or life expectancies of the "qualified distributee" and the "qualified distributee's" designated beneficiary, or for a specified period of ten years or more, or |
(o) | A "qualified distributee" means a Participant, his surviving spouse, his spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, or, for periods on and after January 1, 2010, a deceased Participant's nonspouse beneficiary who is his designated beneficiary within the meaning of Section 401(a)(9)(E) of the Code. |
16.3 | Notice Regarding Form of Payment |
16.4 | Distribution in the Form of Employer Stock |
17.1 | Designation of Beneficiary |
17.2 | Spousal Consent Requirements |
18.1 | Committee |
18.2 | Fiduciary Responsibility |
(f) | The Committee shall be the "Named Fiduciary," as that term is defined in Section 402(a)(2) of ERISA, for the general administration of the Plan. The Committee shall have no responsibility for or control over the investment of the Plan assets held in the funds established hereunder. |
(g) | The Investment Committee shall be appointed and may be removed by the Board, and shall be the "Named Fiduciary," as that term is defined in Section 402(a)(2) of ERISA, with respect to the control or management of the assets of the Plan, and with respect to the selection, retention or replacement of the Trustee, and any Investment Manager. The Investment Committee shall have the exclusive authority and responsibility: |
(i) | to appoint and remove Investment Managers with respect to the Plan, and the Trustee or any successor Trustee under the Trust Agreement; and |
(ii) | to direct the segregation of all or a portion of the assets of any Investment Fund into an Investment Manager account or accounts at any time and from time to time, and to add to or withdraw assets from such Investment Manager account or accounts as it deems desirable or appropriate. |
(h) | The Committee, the Investment Committee and any other persons who jointly or severally have authority to control and manage the operation and administration of the Plan may allocate to and among any one or more of them their respective fiduciary responsibilities, other than the power to appoint an Investment Manager, to manage or control Trust assets under the Plan, and may designate others to carry out fiduciary responsibilities, other than such "trustee responsibilities," under the Plan. Such allocation and designation, respectively, shall be effected by written instruments, copies of which shall be delivered to the Sponsor, such committee of the Board, such committee of officers, or such officers of the Sponsor as shall be designated by the Board. Such persons, and fiduciaries designated by such persons as above provided, may employ others to render advice to them relative to their respective responsibilities under the Plan. |
18.3 | Committee Power and Rules |
18.4 | Reliance |
18.5 | Indemnification |
18.6 | Claims Review Procedure |
(c) | the date on which the Claimant's request was filed with the Committee; provided, however, that the date on which the Claimant's request for review was in fact filed with the Committee shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph; |
(d) | the specific portions of the denial of his claim which the Claimant requests the Committee to review; |
(e) | a statement by the Claimant setting forth the basis upon which he believes the Committee should reverse the previous denial of his claim for benefits and accept his claim as made; and |
(f) | any written material (offered as exhibits) which the Claimant desires the Committee to examine in its consideration of his position as stated pursuant to paragraph (c) of this Section. |
18.7 | Exhaustion of Remedies and Limitation of Actions |
18.8 | Qualified Domestic Relations Orders |
19.1 | Amendment |
19.2 | Limitation on Amendment |
19.3 | Termination |
(a) | As of the termination date, each Investment Fund shall be valued and all Separate Accounts and Sub‑Accounts shall be adjusted in the manner provided in Article XI, with any unallocated contributions or forfeitures being allocated as of the termination date in the manner otherwise provided in the Plan. In determining the net worth of the Trust, there shall be included as a liability such amounts as shall be necessary to pay all expenses in connection with the termination of the Trust and the liquidation and distribution of the property of the Trust, as well as other expenses, whether or not accrued, and shall include as an asset all accrued income. |
(b) | All Separate Accounts shall then be disposed of to or for the benefit of each Participant or Beneficiary in accordance with the provisions of Article XV as if the termination date were his Settlement Date; provided, however, that notwithstanding the provisions of Article XV, if the Plan does not offer an annuity option and if neither his Employer nor a Related Company establishes or maintains another defined contribution plan (other than an employee stock ownership plan as defined in Section 4975(e)(7) of the Code), the Participant's written consent to the commencement of distribution shall not be required regardless of the value of the vested portions of his Separate Account. |
(c) | Notwithstanding the provisions of paragraph (b) of this Section, no distribution shall be made to a Participant of any portion of the balance of his Tax‑Deferred Contributions |
19.4 | Reorganization |
19.5 | Withdrawal of an Employer |
20.1 | Adoption by Related Companies |
20.2 | Extension of Coverage |
20.3 | Effective Plan Provisions |
21.1 | No Commitment as to Employment |
21.2 | Benefits |
21.3 | No Guarantees |
21.4 | Expenses |
21.5 | Precedent |
21.6 | Duty to Furnish Information |
21.7 | Withholding |
21.8 | Merger, Consolidation, or Transfer of Plan Assets |
21.9 | Correction of Plan Failures |
21.10 | Condition on Employer Contributions |
21.11 | Return of Contributions to an Employer |
(a) | is made under a mistake of fact, or |
(b) | is disallowed as a deduction under Section 404 of the Code, |
21.12 | Validity of Plan and Forum Selection |
21.13 | Trust Agreement |
21.14 | Parties Bound |
21.15 | Application of Certain Plan Provisions |
21.16 | Leased Employees |
21.17 | Transferred Funds |
21.18 | Certain Provisions Not Applicable to Bargaining Units |
21.19 | Uniformed Services |
21.20 | Transfer from Other Qualified Plans |
21.21 | Transfer to Other Qualified Plans |
21.22 | Issuance of Employer Stock |
21.23 | Application of Windsor Decision |
(a) | the term "spouse" includes an individual married to a person of the same sex if the individuals are lawfully married under state law, and the term "marriage" includes such a marriage between individuals of the same sex; |
(b) | there shall be recognized a marriage of same-sex individuals that was validly entered into in a state whose laws authorize the marriage of two individuals of the same sex even if the married couple is domiciled in a state that does not recognize the validity of same-sex marriages; and |
(c) | the terms "spouse," "husband and wife," "husband," and "wife" do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term "marriage" does not include such formal relationships. |
21.24 | Miscellaneous Investment Proceeds |
22.1 | Merger of Cooper Individual Account Retirement Plan for Bargaining Unit Employees |
22.2 | Separate Accounts |
22.3 | Continuing Provisions |
23.1 | Merger of Shaper Lighting Employee Profit Sharing and 401(k) Plan & Trust |
23.2 | Separate Accounts |
23.3 | Continuing Provisions |
24.1 | General |
24.2 | Legal Compliance Effective Date Provisions |
EATON CORPORATION | |
By: Title: |
Description of Covered Group | Date Plan Coverage Effective | Plan Effective Date Prior to Plan Merger |
Employees covered by a collective bargaining agreement with: | ||
UAW Local 164, Auburn, IN | October 1, 1997 | N/A |
IAM and Aerospace Workers, Local 77, Eden Prairie, MN | July 1, 1998 | January 1, 1990 |
Beaver Salaried Employees Association (BSEA), Beaver, PA | September 1, 1998 | February 1, 1994 |
IBEW, AFL-CIO, Local 201, Beaver, PA | September 1, 1998 | February 1, 1994 |
IBEW, AFL-CIO, Local 1833, Horseheads, NY | September 1, 1998 | February 1, 1994 |
IAMAW Local 1165, Lincoln, IL | May 1, 1999 | January 1, 1994 |
IAM Local 70, Hutchinson, KS | July 1, 2000 | July 3, 1988 |
UPIU Local 7967, Cleveland, OH | July 1, 2000 | January 1, 1995 |
UAW Local 475, Jackson, MI | January 1, 2001 | N/A |
IUE Local 792, Jackson, MS | January 1, 2002 | N/A |
UAW Local 1404, Columbia City, IN | July 1, 2003 | N/A |
Centurion/John Crane/EKK Eagle American Shop Union, Warwick, RI | January 1, 2006 | N/A |
UAW Local 2262, Euclid OH | July 1, 2007 | November 1, 2002 |
IBEW Local 2131, Richmond, California | January 1, 2014 | May 5, 1966 |
Description of Covered Group Employees covered by a collective bargaining agreement with: | Date Plan Coverage Effective | Plan Effective Date Prior to Plan Merger | Coverage End Date |
• IAM Local 78, Milwaukee, WI | July 1, 1996 | N/A | __________, 1980 |
• IAM Local 1061, Milwaukee, WI | July 1, 1996 | N/A | March 15, 2003 |
• USWA Local 7509, Shelbyville, TN | September 1, 1996 | N/A | __________, 2003 |
• UAW Local 220, Marshall, MI | January 1, 1997 | N/A | July 30, 2006 |
• Metal Processors Union IUAP & NW AFL-CIO, Local 16, Rochelle, IL | January 1, 1997 | N/A | __________, 2006 |
• UPIU Local 7334, Massillon, OH | March 1, 1999 | [N/A] | [DATE] |
• UAW Local 1609, Winimac, IN | December 1, 1999 | January 1, 1995 | __________, 1998 |
• IAMAW Local 725, Los Angeles, CA | January 1, 2000 | N/A | [DATE] |
• UAW Local 1966, Jackson, MI | January 1, 2002 | N/A | November 8, 2007 |
• IAMAW Local 2528, Hohenwald, TN | May 1, 2003 | N/A | July 29, 2005 |
• PACE – Local 7433, Saginaw, MI | June 1, 2003 | January 1, 1990 | December 17, 2007 |
• United Employees Union, Elizabeth, NJ | September 3, 2005 | N/A | __________, 2006 |
• IAM Local 97, Portage, MI | September 1, 2006 | N/A | October 21, 2008 |
1. | Article VI is replaced by Article VIA, as follows: |
6A.1 | Applicability |
6A.2 | Matching Contributions |
6A.3 | Payment of Employer Contributions |
6A.4 | Vesting of Employer Contributions |
6A.5 | Election of Former Vesting Schedule |
2. | The following provision is added to Article XIII and is applicable with respect to Participants described in Section 6A.1 for whom matching contributions are made: |
3. | The following provision is added to Article XVI: |
(a) | He may elect to receive monthly or annual installments, the amount of which is determined by the Retired Participant at retirement. Monthly installments shall begin as soon as practicable following his written direction to the Administrator. For annual installments, the first installment will be paid as soon as practicable following the close of the Plan Year in which the Participant retires and each subsequent installment will be paid as close as practicable to the annual anniversary of the first payment. Each installment shall be paid in cash on a pro rata basis from each Investment Fund in which he has an interest. Payments shall be made until the Retired Participant's Separate Account is depleted. Payments under this option must be at least equal to the amount required under Section 401(a)(9) of the Code and regulations issued thereunder. |
(b) | He may elect to defer receipt of his Separate Account until such time as he instructs the Administrator that he wishes to receive his Separate Account in whole or in part. In no event, however, may the Retired Participant defer receipt of his first payment beyond the April 1 following the calendar year in which he attains age 70-1/2, and such first payment and all subsequent payments must be at least equal to the amounts required under Section 401(a)(9) of the Code and regulations issued thereunder. |
(c) | If the total value of the Participant's Separate Account exceeds $5,000, the designated Beneficiary is his spouse, and the Participant's death occurred prior to the date the Participant reached age 50, the spouse may elect a total distribution to be made as soon as practicable after the Participant's death or may elect to leave the Participant's Separate Account in the Plan. If the spouse elects to leave the Participant's Separate Account in the Plan, the spouse shall be treated as a terminated Participant. Amounts which remain in the Plan must be withdrawn (in one lump sum only) not later than by the Participant's Normal Retirement Date; no partial distributions shall be permitted. |
(d) | If the total value of the Participant's Separate Account exceeds $5,000, the designated Beneficiary is his spouse, and the Participant's death occurred on or after the date the Participant reached age 50, the spouse may elect a total distribution to be made as soon as practicable after the Participant's death or may elect to leave the Participant's Separate Account in the Plan. If the spouse elects to leave the Participant's Separate Account in the Plan, he shall be treated as a Retired Participant and the investment and payout |
(e) | If the total value of the Participant's Separate Account exceeds $5,000 and the designated Beneficiary is the spouse, the spouse shall be treated as a Retired Participant and the investment and payout options which are available to a Retired Participant shall be available to the spouse. |
Re: | Separate Plan Provisions Relating to: |
1. | Article VI is replaced by Article VIB, as follows: |
6B.1 | Applicability |
6B.2 | Matching Contributions |
6B.3 | Vesting of Employer Contributions |
6B.4 | Profit Sharing Contributions |
2. | The following provision is added to Article XIII and is applicable with respect to Participants described in Section 6B.1 for whom matching contributions were made: |
13B.8 | Withdrawal Provisions Relating to Matching Contributions |
21C.23 | Transfer from the Eaton Corporation Engine Components Division |
Date of Birth | Percentage of Compensation Contribution |
Before January 1, 1946 | 7% |
From January 1, 1946 through December 31, 1950 | 6% |
From January 1, 1951 through December 31, 1955 | 5% |
On or after January 1, 1956 | 4% |
(a) | A Participant shall be 100 percent vested in, and have a nonforfeitable right to, the matching contributions credited to his Employer Contributions Sub-Account (Matching) during a given Plan Year |
(b) | A Participant shall be 100 percent vested in, and have a nonforfeitable right to, the employer retirement contributions credited to his Employer Contributions Sub‑Account (Retirement) for a Plan Year after he has been credited with five years of Vesting Service. Notwithstanding the foregoing, a Participant shall be 100 percent vested in, and have a nonforfeitable right to, his Employer Contributions Sub-Account (Retirement), if he ceases to be employed by the Employers on or after his 65th birthday. Moreover, the Employer Contributions Sub-Account of each Participant who terminated employment in connection with the closing of the Elizabeth, New Jersey location in 2006 shall be fully vested. |
(c) | In determining the Vesting Service of an Eligible Employee who was employed by Hayward Industries on September 2, 2005, service earned by such Eligible Employee under the Hayward Industries, Inc. Pension Plan shall be included as Vesting Service under the Plan. |
2. | A new paragraph 12D.6(f) is added to Section 12.6 to provide as follows: |
(f) | Amounts Not Available: The amount a Participant may borrow shall be determined after excluding any amount which has been allocated to his Employer Contributions Sub-Accounts for a period of less than 24 months ending on the date of his loan request. |
3. | The following provision is added to Article XIII and is applicable with respect to Participants described in Section 6D.1 for whom matching contributions or employer retirement contributions are made: |
4. | The following provisions are added to Article XIV and are applicable to Participants described in Section 6D.1 for whom employer retirement contributions are made: |
(a) | If the Participant has no vested interest in his Separate Account upon the occurrence of his Settlement Date or his vested interest in his Separate Account as |
(b) | If the Participant's vested interest in his Separate Account exceeds $5,000 and the Participant is eligible for and consents in writing to a single sum payment of his vested interest in his Separate Account, the non-vested balance remaining in the Participant's Employer Contributions Sub-Account (Retirement) shall be forfeited and his Separate Account closed as of the last day of the Plan Year in which the single sum payment occurs, provided that such distribution is made because of the Participant's Settlement Date. A distribution is deemed to be made because of a Participant's Settlement Date if it occurs prior to the end of the second Plan Year beginning on or after the Participant's Settlement Date. |
(c) | If neither paragraph (a) nor paragraph (b) is applicable, the non-vested balance remaining in the Participant's Employer Contributions Sub-Account (Retirement) shall continue to be held in such Sub-Account and shall not be forfeited until the Participant has been absent from employment with the Employer for five years. |
(a) | he returns to employment with an Employer or a Related Company before he incurs a five year break in service commencing after the date he received, or is deemed to have received, distribution of his vested interest in his Separate Account; |
(b) | he resumes employment covered under the Plan before the earlier of (i) the end of the five-year period beginning on the date he is reemployed or (ii) the date he incurs a five year break in service commencing after the date he received, or is deemed to have received, distribution of his vested interest in his Separate Account; and |
(c) | if he received actual distribution of his vested interest in his Separate Account, he repays to the Plan the full amount of such distribution before the earlier of (i) the end of the five year period beginning on the date he is reemployed or (ii) the date he incurs a five year break in service commencing after the date he received distribution of his vested interest in his Separate Account. |
2. | The following provision is added to Article XIII and is applicable with respect to Participants described in Section 6E.1 for whom matching contributions are made: |
1. | Article VI is replaced by Article VIF, as follows: |
1. | Section 3.1 is replaced by Section 3G.1, as follows: |
2. | Section 4.2 is replaced by Section 4G.2, as follows: |
3. | Section 5.2 is replaced by Section 5G.2, as follows: |
5G.9 | Overall Limitation on Tax-Deferred Contributions and After-Tax Contributions |
6H.1 | Applicability |
6H.4 | Vesting of Employer Contributions |
Vested Percentage Years of Vesting Service | |
Less than 2 | 0 |
2 | 20 |
3 | 40 |
4 | 60 |
5 | 80 |
6 | 100 |
6H.6 | Forfeitures to Reduce Employer Contributions |
2. | The following provision is added to Article XIII and is applicable with respect to Participants described in Section 6H.1 for whom matching contributions are made: |
3. | The following provisions are added to Article XIV and are applicable to Participants described in Section 6H.1 for whom employer retirement contributions are made: |
(a) | If the Participant has no vested interest in his Separate Account upon the occurrence of his Settlement Date or his vested interest in his Separate Account as of the date of distribution does not exceed $5,000 resulting in the distribution or deemed distribution to the Participant of his entire vested interest in his Separate Account, the non-vested balance remaining in the Participant's Employer Contributions Sub-Account shall be forfeited and his Separate Account closed as of the last day of the Plan Year (i) in which the Participant's Settlement Date occurs, if the Participant has no vested interest in his Separate Account and is therefore deemed to have received distribution on that date, or (ii) in which actual distribution is made to the Participant. |
(b) | If the Participant's vested interest in his Separate Account exceeds $5,000 and the Participant is eligible for and consents in writing to a single sum payment of his vested interest in his Separate Account, the non-vested balance remaining in the Participant's Employer Contributions Sub-Account shall be forfeited and his Separate Account closed as of the last day of the Plan Year in which the single sum payment occurs, provided that such distribution is made because of the Participant's Settlement Date. A distribution is deemed to be made because of a Participant's Settlement Date if it occurs prior to the end of the second Plan Year beginning on or after the Participant's Settlement Date. |
(c) | If neither paragraph (a) nor paragraph (b) is applicable, the non-vested balance remaining in the Participant's Employer Contributions Sub-Account shall continue to be held in such Sub-Account and shall not be forfeited until the Participant has been absent from employment with the Employer for five years. |
(a) | he returns to employment with an Employer or a Related Company before he incurs a five year break in service commencing after the date he received, or is deemed to have received, distribution of his vested interest in his Separate Account; |
(b) | he resumes employment covered under the Plan before the earlier of (i) the end of the five-year period beginning on the date he is reemployed or (ii) the date he incurs a five year break in service commencing after the date he received, or is deemed to have received, distribution of his vested interest in his Separate Account; and |
(c) | if he received actual distribution of his vested interest in his Separate Account, he repays to the Plan the full amount of such distribution before the earlier of (i) the end of the five year period beginning on the date he is reemployed or (ii) the date he incurs a five year break in service commencing after the date he received distribution of his vested interest in his Separate Account. |
(1) | Account. The term "Account" shall mean the individual account established, maintained, and administered, including all subaccounts, to reflect the interest of each Eligible Employee who becomes a Member pursuant to the provisions of Article II of this Appendix A or in accordance with any Addendum for each inactive Member. |
(2) | Addendum. The term “Addendum” shall mean the special overriding provisions applicable to Members employed at a facility listed on Schedule B that is attached to and made a part of this Appendix A. |
(3) | Affiliate. The term “Affiliate” shall mean any member of a controlled group of corporations (as determined under §414(b) of the Code) of which the Company is a member; any member of a group of trades or businesses under common control (as determined under §414(c) of the Code) with the Company; any member of an affiliated service group (as determined under §414(m) of the Code) of which the Company is a member; and any other entity which is required to be aggregated with the Company pursuant to the provisions of §414(o) of the Code. |
(4) | Affiliated Group. The term “Affiliated Group” shall mean the group of entities which are Affiliates. |
(5) | Allocation Date. The term “Allocation Date” shall mean any date within a Plan Year as of which Contribution Amounts are allocated pursuant to the provisions of Section 4.01 of this Appendix A. |
(6) | Company. The term “Company” shall mean Eaton Electric Holdings LLC, its corporate successors, and the surviving corporation resulting from any merger or consolidation of Eaton Electric Holdings LLC with any other corporation or corporations. |
(7) | Company Contributions. The term “Company Contributions” shall mean the profit sharing contributions made to the Plan by the Company or the Employer in accordance with the provisions of Article III of this Appendix A. |
(8) | Consolidated DC Participant. The term “Consolidated DC Participant” shall mean an individual who is listed on Schedule C, and whose Account consists of assets transferred from the Cooper Industries, Inc. Consolidated Defined Contribution Plan on November 30, 2001. |
(9) | Contribution Amount. The term “Contribution Amount” shall mean the amount of Company Contributions allocated to each Member as provided in Section 3.02 of Appendix A applicable to such Member. |
(10) | Contribution Hour. Except as otherwise provided in an applicable Addendum, the term “Contribution Hour” shall mean an hour of employment for which a Member receives pay from the Employer, including overtime hours (but not premium hours), holiday hours, vacation hours, jury duty hours and bereavement leave hours. Notwithstanding the foregoing but subject to the provisions of an applicable Addendum, a Contribution Hour shall not include any paid hours for any other absence or other periods during which no duties are performed for the Company. |
(11) | Eligible Employee. The term “Eligible Employee” shall mean a person who is employed on an hourly rate basis by the Employer at a facility listed on Schedule B of this Appendix A and who is a member of the Union listed on the applicable addendum or who is not a member of said Union but whose benefits eligibility and terms are determined under a collective bargaining agreement to which said Union is a party. |
(12) | Employer. The term "Employer" shall mean the Company and any Affiliate which has a facility covered under this Appendix A. |
(13) | Member. The term “Member” shall mean an Eligible Employee who becomes a participant in the Plan pursuant to the provisions of Article II of this Appendix A. |
(14) | Merged Plan. The term “Merged Plan” shall mean each of the plans which are listed on Schedule A and which have been merged into the IAR Plan. |
(15) | Normal Retirement Age. The term “Normal Retirement Age” shall mean age 65. |
(16) | Pay Period. The term “Pay Period” shall mean the periodic payroll period for which a Member receives compensation from the Employer while an Eligible Employee. |
(17) | Retirement Date. The term “Retirement Date” shall mean the date on which an active or inactive Member terminates employment with the Affiliated Group. |
(18) | Total Disability. The term “Total Disability” shall mean incapacity of a Member incurred while an Employee by reason of any medically demonstrated physical or mental condition which the Employer finds, on the basis of qualified medical evidence, will permanently prevent such Member from being able, or would endanger his life if he continued, to engage in any employment with the Affiliated Group or in any other employment or occupation for remuneration or profit which might reasonably be |
(19) | Union. The term “Union” shall mean the collective bargaining agent set forth on an applicable Addendum. |
(20) | Vested Interest. The term “Vested Interest” shall mean the percentage of a Member’s Account which, pursuant to the provisions of the Plan, is nonforfeitable. |
(21) | Vesting Service. The term “Vesting Service” shall mean the measure of service used to determine the Vested Interest of a Member in his Account pursuant to the provisions of Section 5.01. |
Years of Vesting Service of a Member | Vested Interest | |
Less than 2 years | 0 | % |
2 years but less than 3 years | 25% | |
3 years but less than 4 years | 50% | |
4 years but less than 5 years | 75% | |
5 or more years | 100% |
Plan Name | Effective Date |
1. Individual Account Retirement Plan for Bargaining Unit Employees of the Americus Plant (PN #176) | November 30, 2001 |
2. Individual Account Retirement Plan for Metalux Drivers Bargaining Unit at Americus (PN #177) | November 30, 2001 |
3 Individual Account Retirement Plan for Bargaining Unit Employees of Bussmann/Ellisville (PN #170) | November 30, 2001 |
4. Individual Account Retirement Plan for Bargaining Unit Employees at East Stroudsburg, Pennsylvania (PN #162) | November 30, 2001 |
5. Individual Account Retirement Plan for Bargaining Unit Employees at Halo Lighting at Elk Grove, Illinois (PN #164) | November 30, 2001 |
6. Individual Account Retirement Plan for Bargaining Unit Employees of the Cooper Lighting Division at Ellaville, Georgia (PN #179) | November 30, 2001 |
7. Individual Account Retirement Plan for Bargaining Unit Employees of the Eufaula Plant (PN #173) | November 30, 2001 |
8. Individual Account Retirement Plan for Bargaining Unit Employees of Cooper Power Systems in Fayetteville, Arkansas (PN #311) | November 30, 2001 |
9. Individual Account Retirement Plan for Bargaining Unit Employees at the Meadow Lands, Pennsylvania Plant (PN #305) | November 30, 2001 |
10. Individual Account Retirement Plan for Hourly Employees of Cooper Lighting Division at Bloomington, California (PN #232) | November 30, 2001 |
11. Individual Account Retirement Plan for Bargaining Unit Employees of Cooper Lighting Division at Vicksburg, Mississippi (PN #121) | November 30, 2001 |
12. Individual Account Retirement Plan for Bargaining Unit Employees of the Cooper Hand Tools Division at Cortland, New York (PN #208) | November 1, 2003 |
Plan Name | Effective Date |
13. Individual Account Retirement Plan for Hourly-Paid Employees at Greenville, Mississippi ( PN# 157) | November 1, 2003 |
14. Individual Account Retirement Plan for Bargaining Unit Employees of Crouse-Hinds Division in Montebello, California (PN #300) | November 1, 2003 |
15. Individual Account Retirement Plan for Hourly-Paid Employees in the UAW Bargaining Unit at Apex Division in Dayton, Ohio (PN #142) | May 1, 2004 |
16. Wheelock, Inc. Section 401(k) Plan for Union Employees at Long Branch, New Jersey (including Neptune and Oceanport) | January 1, 2007 |
17. GS Metals Corp Retirement Savings Plan at Pickneyville, Illinois | January 1, 2009 |
1. Americus, Georgia |
2. Ellisville, Missouri |
3. Elk Grove, Illinois |
4. Fayetteville, Arkansas – through December 31, 2015 only |
5. Meadow Lands, Pennsylvania |
6. Bloomington, California |
7. Syracuse, New York |
8. Vicksburg, Mississippi |
9. Long Branch, New Jersey (including Neptune and Oceanport) |
10. Pinckneyville, Illinois |
Last Name | First Name |
ALFRED SR | CASTAIN |
ARENDT | LINDA |
ARLING | L |
ARNETT | RONALD H |
BAIRD | BOBBY |
BALLARD | CONSTANCE |
BEVAN | JAN ELAINE |
BILLIPS | DALE |
BOHANNAN | MONNICA |
BUFORD | MARY |
CAROTHERS | JUDY |
COLSON | GILLAN |
COX | PATRICK |
CREECH | LORRAINE |
CRONIN | MICHAEL |
CZARNETA | MARIAN |
DALTON | LONARD |
DANIELSEN | KENNETH |
DARING | KENNETH |
DAVIS | LEWIS |
DAVIS | PATRICIA |
DIAZ | ARNOLDO |
DONNELL | SAMUEL |
DREWS | LAWRENCE |
DREYER | R |
DUNAWAY | EDDIE |
EDLIN | JOYCE |
FINCH JR | JOHN |
FORD | RONALD JR. |
FRATTA | FEDERICO |
GENTRY | GREGORY |
GILBERTSON | CRAIG |
GRIMES | DEBBIE |
GROVES | ROBERT |
HAMILTON | STAN |
HARRISON | JOE |
HARTLEY | RITA |
Last Name | First Name |
HATFIELD | WANDA |
HOLLAND J | H |
JANIK | EDWIN |
JONES | ALICE |
KNOWLES | IAN |
KUDLACEK | JOSEPH |
LANCASTER | RONALD |
LAUBSCHER | KAREN |
LEE | H |
LEONARD | KEVIN |
LIST | ROLAND |
MCCURLEY | ROBERT J |
MEDINA | PABLO |
MESSNER | R |
MILLER | DORA |
MIRAMONTEZ | MARY |
MITCHELL | HAROLD |
MOORE | LARRY |
MOORE | ROGER |
MOSHER | THOMAS L |
NEAL | TOMMY |
NEIGER | ROBERT |
NORWOOD | B |
PACK | DEBBIE |
PERRY | R |
PIERCE | MICHAEL |
RHODES | LOUELLA |
ROBERTS | MARK |
ROBINSON | BRIAN |
RODRIGUEZ | KATHLEEN |
SADLER | EARNESTINE |
SAMPSON | HAROLD |
SARVER | DEBORAH |
SCHUTSKY | HENRY |
STURGEON | FRED |
SWITALA | LEO |
TALLEY | MARK |
THOMPSON | ROBIN |
VAN DUSEN | HAZEL |
VANVACTOR | CHARLES |
VINSON | BRENDA |
WARNEKE | GARY |
WILLIAMS | WANDA |
2. | Union (Section 1.01(19)): Local No. 2194, International Brotherhood of Electrical Workers, AFL-CIO |
3. | Contribution Hour: (Section 1.01(10)): Standard definition |
4. | Contribution Rate: (Section 3.02): |
Effective Date of Contribution Rate for All Employees | Position Grade | Contribution Rate |
For each Contribution Hour on and after January 1, 1989, but prior to January 1, 1991 | I II | $.10 $.12 |
For each Contribution Hour on and after January 1, 1991 but prior to January 1, 1992 | I II | $.15 $.18 |
For each Contribution Hour on and after January 1, 1992 but prior to October 31, 1992 | I II | $.20 $.25 |
Effective Date of Contribution Rate For Employees Hired Prior to January 1, 1980 | Position Grade | Contribution Grade |
For each Contribution Hour on and after October 31, 1992, but prior to November 1, 1993 | I II | $.30 $.35 |
For each Contribution Hour on and after November 1, 1993, but prior to November 3, 1996 | I II | $.35 $.40 |
For each Contribution Hour on and after November 3, 1996, but prior to November 1, 1998 | I II | $.40 $.45 |
For each Contribution Hour on and after November 1, 1998, but prior to October 29, 2000 | I II | $.45 $.50 |
For each Contribution Hour on and after October 29, 2000, but prior to October 26, 2003 | I II | $.50 $.55 |
For each Contribution Hour on and after October 26, 2003, but prior to October 31, 2004 | I II | $.55 $.60 |
Effective Date of Contribution Rate For Employees Hired on or after January 1, 1980, but prior to October 31, 1999 | Position Grade | Contribution Grade |
For each Contribution Hour on and after October 31, 1992, but prior to November 1, 1993 | I II | $.25 $.30 |
For each Contribution Hour on and after November 1, 1993, but prior to November 3, 1996 | I II | $.30 $.35 |
For each Contribution Hour on and after November 3, 1996, but prior to November 1, 1998 | I II | $.35 $.40 |
For each Contribution Hour on and after November 1, 1998 but prior to October 29, 2000 | I II | $.40 $.45 |
For each Contribution Hour on and after October 29, 2000, but prior to October 26, 2003 | I II | $.45 $.50 |
For each Contribution Hour on and after October 26, 2003, but prior to October 31, 2004 | I II | $.50 $.55 |
Effective Date of Contribution Rate For Employees Hired on and after October 31, 1999, but prior to October 31, 2004 | Position Grade | Contribution Rate |
For each Contribution Hour on and after October 31, 1999, but prior to October 31, 2004 | I II | $.35 $.35 |
Effective Date of Contribution Rate For All Employees On and After October 31, 2004 | Labor Grades | Contribution Rate |
For each Contribution Hour on and after October 31, 2004, but prior to February 28, 2008 | 1, 2, 3, 5, 7, 9, 10 4, 6, 8, 11, 12, 13, 14 | $.55 $.60 |
For each Contribution Hour on and after February 28, 2008, but prior to October 28, 2013 | 1, 2, 3, 5, 7, 9, 10 4, 6, 8, 11, 12, 13, 14, 15 | $.55 $.60 |
For each Contribution Hour on and after October 28, 2013 | 1, 2, 3, 5, 7, 9, 10 4, 6, 8, 11, 12, 13, 14, 15 | $.60 $.65 |
2. | Union (Section 1.01 (19)): Metalux Association of Drivers prior to January 3, 2005 |
3. | Contribution Hour (Section 1.01(10): Prior to January 1, 2005, “Contribution Mile” which shall mean each mile driven by an active Member for which such Member receives pay from the Employer. |
Effective Date of Contribution Rate | Contribution Rate Per Contribution Mile |
On and after January 1, 1989, but prior to September 1, 1989 Type of Trip Eufaula Trip $.74 per trip 40 Mile Radius $.45 per trip Trips | $.0027 (double driver) $.0031 (single driver) |
On and after September 1, 1989, but prior to September 1, 1990 | $.1752 |
On and after September 1, 1990, but prior to September 1, 1991 | $.2190 |
Effective Date of Contribution Rate | Contribution Rate Per Contribution Mile |
On and after September 1, 1991, but prior to November 15, 1992 | $.2630 |
On and after November 15, 1992, but prior to November 8, 1993 | $.3000 |
On and after November 8, 1993, but prior to January 3, 2005 | $.3400 |
5. | Vested Interested (Section 5.02): Effective as of December 4, 2004, Vested Interest of any Member covered by the |
3. | Contribution Hour (Section 1.01(10): The term “Contribution Hour” shall mean an hour of employment for which a Member receives pay from the Employer, including overtime, holiday hours, vacation hours, jury duty hours, bereavement leave hours and Union business hours; provided, however, a Contribution Hour shall not include any paid hours for any other absence or other periods during which no duties are performed for the Employer. |
Effective Dates | Labor Grade | Contribution Rate |
On and after January 1, 1989, but prior to February 17, 1992 | 1,2, and 3 4 5 6 | $.29 $.36 $.45 $.51 |
On and after February 17, 1992, but prior to February 15, 1993 | 1,2, and 3 4 5 6 | $.32 $.39 $.49 $.56 |
On and after February 15, 1993, but prior to February 21, 1994 | 1,2, and 3 4 5 6 | $.34 $.42 $.52 $.61 |
On and after February 21, 1994, but prior to February 13, 1995 | 1,2, and 3 4 5 6 | $.36 $.44 $.55 $.65 |
On and after February 13, 1995, but prior to February 19, 1996 | 1,2, and 3 4 5 6 | $.39 $.47 $.58 $.68 |
On and after February 19, 1996, but prior to February 17, 1997 | 1,2, and 3 4 5 6 | $.42 $.50 $.61 $.71 |
Effective Dates | Labor Grade | Contribution Rate |
On and after February 17, 1997, but prior to February 2, 1998 | 1,2, and 3 4 5 6 | $.45 $.53 $.64 $.74 |
On and after February 2, 1998, but prior to February 22, 1999 | 1,2, and 3 4 5 6 | $.48 $.56 $.67 $.77 |
On and after February 22, 1999, but prior to February 21, 2000 | 1,2, and 3 4 5 6 | $.51 $.59 $.70 $.80 |
On and after February 21, 2000, but prior to February 25, 2002 | 1,2, and 3 4 5 6 | $.54 $.62 $.73 $.83 |
1,2, and 3 4 5 6 | $.59 $.67 $.78 $.88 | |
On and after February 14, 2005, but prior to February 22, 2010 | 1, 2, and 3 4 5 6 | $.65 $.75 $.85 $.95 |
On and after February 22, 2010, but prior to April 2, 2011 | 1, 2, and 3 4 5 6 | $.70 $.80 $.90 $1.00 |
On and after April 2, 2011, but prior to April 13, 2015 | 1, 2, and 3 4 5 6 | $.75 $.85 $.95 $1.05 |
On and after April 13, 2015 | 1, 2, and 3 4 5 6 | $.80 $.90 $1.00 $1.10 |
1. | Covered Facility: East Stroudsburg, Pennsylvania |
2. | Union (Section 1.01 (19)): International Association of Machinists and Aerospace Workers, Local No. 1800, District 28 |
3. | Contribution Hour (Section 1.01(10): Prior to May 10, 2003 – standard definition. On and after May 10, 2003, due to the closing of the East Stroudsburg, Pennsylvania facility, no Contribution Hours shall be applicable. |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate | |
Day Work | Base Incentive | |||
For each Contribution Hour on and after January 1, 1989, but prior to August 14, 1990 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.32 $.32 $.38 $.38 $.44 | $.32 $.38 $.38 $.44 -- |
For each Contribution Hour on and after August 14, 1990, but prior to June 27, 1993 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.35 $.35 $.42 $.42 $.48 | $.35 $.42 $.42 $.48 -- |
For each Contribution Hour on and after June 27, 1993, but prior to April 13, 1997 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.52 | $.52 |
For each Contribution Hour on and after April 13, 1997, but prior to April 12, 1998 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.54 | $.54 |
For each Contribution Hour on and after April 12, 1998, but prior to April 11, 1999 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.55 | $.55 |
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate | |
For each Contribution Hour on and after April 11, 1999, but prior to July 3, 2000 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.57 | $.57 |
For each Contribution Hour on and after July 3, 2000, but prior to July 2, 2001 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.60 | $.60 |
For each Contribution Hour on and after July 2, 2001, but prior to July 1, 2002 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.62 | $.62 |
For each Contribution Hour on and after July 1, 2002, but prior to May 10, 2003 | I II III IV V | IA-1 2-5 6 7-8 9-10 | $.64 | $.64 |
Due to the closing of the East Stroudsburg facility, no Contribution Rate shall be applicable to such facility after May 10, 2003. |
6. | Vested Interest: (Section 5.02): Due to the sale of the Cooper Power Systems Pole Line Hardware product line to Hubbell Power Systems, the East Stroudsburg, Pennsylvania facility of the Cooper Power Systems Division will be closed as of May 10, 2003. In conjunction with such closing, effective as of September 19, 2002, the Vested Interest of any Member who is employed as an Eligible Employee covered by this Addendum on such date shall be fully vested. |
7. | Closing: Effective as of May 9, 2003, coverage under the Plan was closed due to the closing of the East Stroudsburg, Pennsylvania facility. |
2. | Union (Section 1.01(19)): Local No. 134, International Brotherhood of Electrical Workers, AFL-CIO |
Effective Date of Contribution Rate | Position Grade | Labor Classification | Contribution Rate |
On and after January 1, 1989 but prior to September 1, 1993 | I I I I I I I II II II II II II | Assembler Janitor Machine Operator Returned Goods Set-Up “B” Order Filler Storage Receiver Material Handler Checker Set-Up “A” Maintenance Mechanic “A” Group Leader | $.45 $.45 $.45 $.45 $.45 $.45 $.45 $.50 $.50 $.50 $.50 $.50 $.50 |
On and after September 1, 1993 through December 31, 2001 | I I I I I I I II II II II II II | Assembler Janitor Machine Operator Returned Goods Set-Up “B” Order Filler Storage Receiver Material Handler Checker Set-Up “A” Maintenance Mechanic “A” Group Leader | $.50 $.50 $.50 $.50 $.50 $.50 $.50 $.55 $.55 $.55 $.55 $.55 $.55 |
On and after January 1, 2002, but prior to August 22, 2005 | All | All | $.55 |
On and after August 22, 2005, but prior to August 23, 2008 | ALL | $.55 | |
On and after August 23, 2008 | ALL | $.65 |
5. | Elections Relating to Lump Sum Payment In Lieu of Wage Increase: Notwithstanding the provisions of Section 4.2 applying an election made thereunder to all Compensation of a Member and limiting the amount of such an election to 50 percent, with respect to any Lump Sum Merit Payment In Lieu of Wage Increase made in 2014 after September 7, 2014, a Member may elect to defer 100% of such Lump Sum Merit Payment In Lieu of Wage Increase. |
1. | Covered Facility: Ellaville, Georgia |
2. | Union (Section 1.01 (19)): Local No. 2194, International Brotherhood of Electrical Workers, AFL-CIO |
3. | Contribution Hour (Section 1.01(10)): Standard definition |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Contribution Rate |
On and after January 1, 1989, but prior to April 30, 1991 | $.10 |
On and after April 30, 1991, but prior to April 30, 1992 | $.15 |
On and after April 30, 1992, but prior to April 26, 1993 | $.20 |
On and after April 26, 1993, but prior to May 1, 1995 | $.25 |
On and after May 1, 1995, but prior to January 7, 2002 | $.30 |
On and after January 7, 2002, but prior to May 1, 2005 | $.35 |
On and after May 1, 2005 | $.40 |
Due to the closing of the Ellaville facility, no Contribution Rate shall be applicable to such facility after August 21, 2009. |
5. | Vested Interest (Section 5.02): The Ellaville, Georgia facility closed as of August 21, 2009. In conjunction with such closing, the Vested Interest of any Member employed as an Eligible Employee covered by this Addendum on such date shall be fully vested. |
6. | Closing: Effective as of August 21, 2009, coverage under the Plan was closed due to the closing of the Ellaville, Georgia facility. |
1. | Covered Facility: Eufaula, Alabama |
2. | Union (Section 1.01(19)): Local No. 779 International Brotherhood of Electrical Workers, AFL-CIO |
Effective Date of Contribution Rate | Position Grade | Classification | Contribution Rate |
On and after January 1, 1989, but prior to January 1, 1991 | I I I I I I II II II II | Material Handler Assembler Utility Forklift Driver Lead Utility Lead Assembler Press Operator Maintenance Helper Maintenance Lead Maintenance | $.10 $.10 $.10 $.10 $.10 $.10 $.12 $.12 $.12 $.12 |
On and after January 1, 1991, but prior to January 1, 1992 | I I I I I I II II II II | Material Handler Assembler Utility Forklift Driver Lead Utility Lead Assembler Press Operator Maintenance Helper Maintenance Lead Maintenance | $.15 $.15 $.15 $.15 $.15 $.15 $.18 $.18 $.18 $.18 |
Effective Date of Contribution Rate | Position Grade | Classification | Contribution Rate |
On and after January 1, 1992, but prior to October 12, 1992 | I I I I I I II II II II | Material Handler Assembler Utility Forklift Driver Lead Utility Lead Assembler Press Operator Maintenance Helper Maintenance Lead Maintenance | $.20 $.20 $.20 $.20 $.20 $.20 $.25 $.25 $.25 $.25 |
On and after October 12, 1992, but prior to September 27, 1993 | I I I I I I II II II II | Material Handler Assembler Utility Forklift Driver Lead Utility Lead Assembler Press Operator Maintenance Helper Maintenance Lead Maintenance | $.25 $.25 $.25 $.25 $.25 $.25 $.30 $.30 $.30 $.30 |
On and after September 27, 1993, but prior to January 1, 1997 | I I I I I I II II II II | Material Handler Assembler Utility Forklift Driver Lead Utility Lead Assembler Press Operator Maintenance Helper Maintenance Lead Maintenance | $.30 $.30 $.30 $.30 $.30 $.30 $.35 $.35 $.35 $.35 |
Effective Date of Contribution Rate | Position Grade | Classification | Contribution Rate |
On and after January 1, 1997, but prior to October 4, 1998 | I I I I I I I I I I I I I II II II II II II II | Material Handler Assembler Utility Forklift Lead Assembler Press Operator Lead Utility Lead Forklift Crane Operator Truck Driver Lead Press Operator Inspector Boxing Machine Operator Lead Maintenance General Maintenance Maintenance A Maintenance B Maintenance C Tool & Die A Tool & Die B | $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.35 $.40 $.40 $.40 $.40 $.40 $.40 $.40 |
On and after October 2, 1998, but prior to September 28, 2003 Members Hired Prior to October 2, 1998 Members Hired On or after October 2, 1998 | Labor Grade I $.45 Labor Grade II $.50 Labor Grade I $.35 Labor Grade II $.35 |
On and after September 28, 2003 but prior to September 25, 2005 Members Hired Prior to October 2, 1998 Members Hired On or after October 2, 1998 | Labor Grade I $.50 Labor Grade II $.55 Labor Grade I $.40 Labor Grade II $.40 |
On and after September 25, 2005 Members Hired Prior to October 2, 1998 Members Hired On or after October 2, 1998 | Labor Grade I $.55 Labor Grade II $.60 Labor Grade I $.45 Labor Grade II $.45 |
5. | Waiver of Vesting Requirement in Connection with Plant Closing: Notwithstanding the provisions of Section 5.02 of this Appendix A, vesting requirements shall be waived for affected Members as described in the Plant Closing and Effects Agreement related to the Eufaula, AL facility. |
2. | Union (Section 1.01(19)): General Drivers and Helpers, Local 832, affiliated with the International Brotherhood of Teamsters |
3. | Contribution Hour (Section 1.01(10): – Standard definition |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Labor Grades | Contribution Rate |
On and after April 1, 1999, but prior to February 4, 2002 | 1-5 6-10 | $.33 $.38 |
On and after February 4, 2002, but prior to January 1, 2005 | 1-5 6-10 | $.38 $.43 |
On and after January 1, 2005, but prior to February 4, 2008 | 1-5 6-10 | $.40 $.45 |
On and after February 4, 2008, but prior to January 1, 2013 | 1-5 6-11 | $.40 $.45 |
On and after January 1, 2013 | 1-5 6-11 | $.45 $.50 |
5. | Vested Interest (Section 5.02): Effective as of January 12, 2005, the Vested Interest of any Member covered by this Addendum on such date shall be fully vested. |
1. | Covered Facility: Meadow Lands, Pennsylvania |
2. | Union (Section 1.01(19)): Local No. 5, International Brotherhood of Electrical Workers, AFL-CIO; Effective August 1, 2012, Local No. 385, International Brotherhood of Electrical Workers, AFL-CIO is merged into Local No. 459, International Brotherhood of Electrical Workers, AFL-CIO. |
3. | Contribution Hour (Section 1.01(10)): Standard definition |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Contribution Rate |
On and after January 1, 1998, but prior to January 20, 2003 | $.25 |
On and after January 20, 2003, but prior to January 26, 2004 | $.30 |
On and after January 26, 2004, but prior to January 31, 2006 | $.35 |
On and after January 31, 2006, but prior to January 23, 2010 | $.40 |
On and after January 23, 2010, but prior to January 20, 2014 | $.45 |
On and after January 20, 2014, but prior to January 19, 2015 | $.50 |
On and after January 19, 2015 | $.60 |
5. | Thepitt Merger: Effective as of the close of business on August 31, 1998, the Thepitt Hourly Savings Plan (the “Thepitt Plan”) was merged into the Plan and the assets and liabilities of the Thepitt Plan have been held, maintained, invested and distributed pursuant to the provisions of the Plan. |
Transfer Date | Member |
June 1, 1999 | Virginia Bosnyak |
June 1, 1999 | Lillian M. Burns |
June 1, 1999 | Donald Hlad |
June 1, 1999 | Keith A. Neal |
June 1, 1999 | Keith Beck |
June 7, 1999 | Ronald P. Walls |
1. | Covered Facility: Bloomington, California |
2. | Union (Section 1.01(19)): Teamsters Automotive, Industrial and Allied Workers Local Union No. 495 |
3. | Contribution Hour (Section 1.01(10): – Standard definition |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Contribution Rate | |
On and after January 1, 1989, but prior to August 28, 2000 | $.45 | |
On and after August 28, 2000, but prior to September 1, 2004 | $.50 | |
On and after September 1, 2004, but prior to August 17, 2009 | $.55 | |
On and after August 17, 2009, but prior to August 15, 2010 | $.00 | |
On and after August 15, 2010, but prior to August 15, 2013 | $.55 | |
On and after August 15, 2013, but prior to August 15, 2014 | $.60 | |
On and after August 15, 2014, but prior to August 15, 2015 | $.65 | |
On and after August 15, 2015, but prior to August 15, 2016 | $.70 | |
On and after August 15, 2016, but prior to August 15, 2017 | $.75 | |
On and after August 15, 2017, but prior to August 15, 2018 | $.80 | |
On and after August 15, 2018 | $.85 |
2. | Union (Section 1.01(19)): Local No. 2084, International Brotherhood of Electrical Workers, AFL-CIO |
3. | Contribution Hour (Section 1.01(10): The term “Contribution Hour” shall mean an hour of employment for which a Member receives pay from the Employer, including overtime hours, holiday hours, vacation hours, jury duty hours, bereavement leave hours, and Workers’ Compensation benefit hours; provided that the disability for which any Workers’ Compensation benefits are payable is expected to last 12 months and such contributions are 100% vested. Notwithstanding the forgoing, a Contribution Hour shall not include any paid hours for any other absence or other periods during which no duties are performed for the Employer, except that Union business hours for which the Member receives pay from the Union shall be Contribution Hours. |
4. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Contribution Rate | ||||
Employees Hired Prior to April 1, 2011 | |||||
On and after January 1, 1989, but prior to July 1, 1990 | $.15 | ||||
On and after July 1, 1990, but prior to April 5, 1993 | $.50 | ||||
On and after April 5, 1993, but prior to April 3, 1995 | $.60 | ||||
On and after April 3, 1995, but prior to April 1, 1996 | $.65 | ||||
On and after April 1, 1996, but prior to April 1, 1997 | $.70 | ||||
On and after April 1, 1997, but prior to April 1, 1998 | $.75 | ||||
On and after April 1, 1998, but prior to March 29, 1999 | $.80 | ||||
On and after March 29, 1999, but prior to April 3, 2000 | $.85 |
On and after April 3, 2000, but prior to April 2, 2001 | $.90 | ||||
On and after April 2, 2001, but prior to April 1, 2002 | $.95 | ||||
On and after April 1, 2002, but prior to March 31, 2003 | $1.00 | ||||
On and after March 31, 2003, but prior to April 1, 2005 | $1.05 | ||||
On and after April 1, 2005, but prior to April 1, 2011 | $1.15 | ||||
On and after April 1, 2011, but prior to April 1, 2018 | $1.25 | ||||
On and after April 1, 2018 | $1.30 | ||||
Employees Hired On or After April 1, 2011 | |||||
On and after April 1, 2011, but prior to April 1, 2016 | $.60 | ||||
On and after April 1, 2016, but prior to April 1, 2018 | $0.65 | ||||
On and after April 1, 2018 | $0.70 | ||||
Notwithstanding the foregoing, effective as of July 1, 1990 and continuing through June 30, 1995, instead of the $.50 contribution rate set forth above, the Employer shall contribute a Contribution Amount to the Plan for each Pay Period for certain active Members who are Eligible Employees on July 1, 1990 based upon the applicable contribution rate set forth below: | |||||
Year of Birth | Completed Years of Service As of July, 1990 and Applicable Contribution Rates | ||||
5 | 6-9 | 10-12 | 13-15 | ||
1926-1928 | $.53 | $.50 | $.50 | $.50 | |
1929-1930 | $.57 | $.50 | $.50 | $.50 | |
1931-1935 | $.68 | $.58 | $.50 | $.50 | |
1936-1940 | $.65 | $.61 | $.58 | $.52 | |
1941-1945 | $.56 | $.52 | $.50 | $.50 |
On and after January 1, 1994 through December 31, 1996, the Employer shall also contribute a supplemental Contribution Amount of $.15 for each Contribution Hour during a pay period from January 1, 1989 through December 31, 1996, of each member who (i) completed an Hour of Service prior to April 1, 1990, (ii) is an Eligible Employee on January 1, 1994, and (iii) had not attained age 50 prior to January 1, 1994 or had attained age 50 prior to January 1, 1994 and is listed below: Charlie E. Allen Charles Lawton, Jr. Bernard W. Austin Donald H. Lescenski Flozell Baker Thomas R. Lowe David E. Britton Robert McDonald Paul B. Burns Paul J. Moran Harold V. Clark Carl F. O’Connor John E. Cooper Richard Q. Paetow Willie Davis Henry L. Randall Hiawatha R. Fitzgerald Sidney Reed Augustine A. Fargenei Robert T. Sears Jean L. France Hansel Smith Gary C. Garrison Peter L. Smith Gerald L. Harshberger Richard Snell Almott Harvey David K. Sutton David T. Hurachla David B. Tepsa Edward P. Kister Howard L. Young Christian Kubler John F. Zimmerman |
5. | Elections Relating to Lump Sum Merit Payments: Notwithstanding the provisions of Section 4.2 applying an election made thereunder to all Compensation of a Member and limiting the amount of such an election to 50 percent, (i) with respect to any Lump Sum Merit Payment made in 2014 after April 23, 2014, a |
2. | Union (Section 1.01(19)): Local 1873, International Brotherhood of Electrical Workers, AFL-CIO |
Employees Hired On and After November 1, 1985 | ||||
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate | |
On and after January 1,1989, but prior to January 1, 1992 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.28 $.32 $.37 | |
On and after January 1, 1992, but prior to January 1, 1994 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.30 $.35 $.41 | |
On and after January 1, 1994, but prior to January 1, 1995 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.32 $.37 $.43 | |
On and after January 1, 1995, but prior to January 1, 1996 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.34 $.39 $.45 | |
On and after January 1, 1996, but prior to January 1,1997 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.36 $.41 $.47 | |
Employees Hired On and After November 1, 1985 |
Employees Hired On and After November 1, 1985 | ||||
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate | |
On and after January 1, 1997, but prior to January 1, 2000 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.38 $.43 $.49 | |
On and after January 1, 2000, but prior to November 1, 2002 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.43 $.48 $.54 | |
On and after November 1, 2002, but prior to November 5, 2005 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.48 $.53 $.59 | |
On and after November 5, 2005, but prior to January 1, 2010 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14, 15 and 17 | $.50 $.55 $.60 | |
On and after January 1, 2010, but prior to June 24, 2013 | I II III IV | 1-7 8-13 14-15 16-17 | $.50 $.55 $.60 $.65 | |
On and after June 24, 2013 | I II III IV | 1-7 8-13 14-15 16-18 | $.50 $.55 $.60 $.65 | |
Employees Hired Prior to November 1, 1985 | ||||
On and after January 1, 1989, but prior to January 1, 1992 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.32 $.37 $.41 | |
On and after January 1, 1992, but prior to January 1, 1994 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.35 $.40 $.44 | |
Employees Hired Prior to November 1, 1985 | ||||
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate |
Employees Hired On and After November 1, 1985 | ||||
On and after January 1, 1994, but prior to January 1, 1995 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.37 $.42 $.47 | |
On and after January 1, 1995, but prior to January 1, 1996 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.40 $.45 $.50 | |
On and after January 1, 1996, bur prior to January 1, 1997 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.43 $.48 $.53 | |
On and after January 1, 1997, but prior to January 1, 2000 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.46 $.51 $.55 | |
On and after January 1, 2000, but prior to November 1, 2002 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.51 $.56 $.61 | |
On and after November 1, 2002, but prior to November 5, 2005 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14 and 15 | $.56 $.61 $.66 | |
On and after November 5, 2005, but prior to January 1, 2010 | I II III | 1,2,3,4, 5,6 and 7 8,9,10,11 12 and 13 14, 15 and 17 | $.60 $.65 $.70 | |
On and after January 1, 2010, but prior to June 24, 2013 | I II III IV | 1-7 8-13 14-15 16-17 | $.60 $.65 $.70 $.75 | |
Employees Hired Prior to November 1, 1985 | ||||
Effective Date of Contribution Rate | Position Grade | Labor Grade | Contribution Rate | |
On and after June 24, 2013 | I II III IV | 1-7 8-13 14-15 16-18 | $.60 $.65 $.70 $.75 | |
Supplemental Contribution Amounts for each Member who was an active Member on November 1, 1991 |
Employees Hired On and After November 1, 1985 | ||||
Active Members on November 1, 1991, who attained at least age 49 on December 31, 1991, and who elected retiree medical coverage | ||||
Age on December 31, 1991 | Monthly Supplemental Contribution Amount | |||
49 | $60.00 | |||
50 | $60.00 | |||
51 | $60.00 | |||
52 | $65.00 | |||
53 | $65.00 | |||
54 | $70.00 | |||
55 and older | $75.00 | |||
Active Members on November 1, 1991, who attained at least age 49 on December 31, 1991 and who do not have retiree medical coverage | ||||
Age on December 31, 1991 | Monthly Supplemental Contribution Amount | |||
49 | $105.00 | |||
Employees Hired Prior to November 1, 1985 | ||||
50 | $105.00 | |||
51 | $110.00 | |||
52 | $115.00 | |||
53 | $120.00 | |||
54 | $125.00 | |||
55 and older | $130.00 |
Active Members on November 1, 1991, who had not attained age 49 on December 31, 1991 | |
Age on December 31, 1991 | Monthly Supplemental Contribution Amount |
25 or less | $10.00 |
26 | $11.00 |
27 | $13.00 |
28 | $15.00 |
29 | $17.00 |
30 | $19.00 |
31 | $21.00 |
32 | $23.00 |
33 | $25.00 |
34 | $27.00 |
35 | $29.00 |
36 | $31.00 |
37 | $34.00 |
38 | $37.00 |
39 | $40.00 |
40 | $44.00 |
41 | $48.00 |
42 | $52.00 |
43 | $54.00 |
44 | $60.00 |
45 | $65.00 |
46 | $70.00 |
47 | $75.00 |
48 | $80.00 |
1. | Covered Participants: Individuals listed on Schedule C who formerly participated in the Cooper Industries, Inc. Consolidated Defined Contribution Plan |
2. | Accounts: The Account of each Consolidated DC Participant was credited with the assets transferred with respect to him from the Cooper Industries, Inc. Consolidated Defined Contribution Plan on November 30, 2001. Thereafter the Accounts were administered and maintained under the terms of the IAR Plan through December 31, 2013, and are administered and maintained under the terms of the Plan effective January 1, 2014. |
1. | Covered Participants: Individuals who formerly participated in the Individual Account Retirement Plan for Bargaining Unit Employees of the Cooper Hand Tools Division at Cortland, New York |
2. | Accounts: The Account of each Member covered by this Addendum was credited with the assets transferred with respect to him due to the merger of the Individual Account Retirement Plan for Bargaining Unit Employees of the Cooper Hand Tools Division at Cortland, New York into the Plan on November 1, 2003. Thereafter the Accounts were administered under the terms of the IAR Plan through December 31, 2013, and are administered and maintained under the terms of the Plan effective January 1, 2014. |
3. | Contribution Rate (Section 3.02): |
Effective Date of Contribution Rate | Contribution Rate |
On and after January 1, 1989, but prior to January 1, 1990 | $.10 |
On and after January 1, 1990, but prior to October 30, 1992 | $.35 |
On and after October 30, 1992, but prior to November 1, 1993 | $.40 |
On and after November 1, 1993, but prior to October 30, 1994 | $.45 |
On and after October 30, 1994, but prior to November 1, 1999 | $.50 |
On and after November 1, 1999, but prior to January 27, 2003 | $.55 |
On and after January 27, 2003, but prior to May 8, 2006 | $.60 |
On and after May 8, 2006, but prior to May 31, 2010 | $.65 |
On and after May 31, 2010 | $.75 |
1. | Covered Participants: Individuals who formerly participated in the Individual Account Retirement Plan for Hourly-Paid Employees at Greenville, Mississippi |
2. | Accounts: The Account of each Member covered by this Addendum was credited with the assets transferred with respect to him due to the merger of the Individual Account Retirement Plan for Hourly-Paid Employees at Greenville, Mississippi into the Plan on November 1, 2003. Thereafter the Accounts were administered and maintained under the terms of the IAR Plan through December 31, 2013, and are administered and maintained under the terms of the Plan effective January 1, 2014. |
1. | Covered Participants: Individuals who formerly participated in the Individual Account Retirement Plan for Bargaining Unit Employees of Crouse-Hinds Division in Montebello, California |
2. | Accounts: The Account of each Member covered by this Addendum was credited with the assets transferred with respect to him due to the merger of the Individual Account Retirement Plan for Bargaining Unit Employees of Crouse-Hinds Division in Montebello, California into the Plan on November 1, 2003. Thereafter the Accounts were administered and maintained under the terms of the IAR Plan through December 31, 2013, and are administered and maintained under the terms of the Plan effective January 1, 2014. |
1. | Covered Facility: Dayton, Ohio |
2. | Union (Section 1.01 (19)): International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, Local No. 1040 |
3. | Contribution Hour (Section 1.01(10): - Except as otherwise provided in an applicable Addendum, the term “Contribution Hour” shall mean an hour of employment for which a Member receives pay from the Employer, including overtime hours (but not premium hours), holiday hours, vacation hours, jury duty hours, Union business hours, and bereavement leave hours. Notwithstanding the foregoing, a Contribution Hour shall not include any paid hours for any other absence or other periods during which no duties are performed for the Company. |
4. | Contribution Rate (Section 3.02): $.35 |
5. | Vested Interest (Section 5.02): Effective as of October 3, 2004, the Vested Interest of any Member covered by this Addendum on such date shall be fully vested. |
1. | Covered Facility: Long Branch, New Jersey (including Neptune and Oceanport) |
2. | Union (Section 1.01 (19)): IBEW Local 2066 |
3. | Company Contributions (Section 3.02): |
Effective Date of Contribution Rate | Company Contribution |
Prior to May 1, 2009 | 2% |
On and after May 1, 2009, but prior to May 3, 2010 3,2010 | 2.25% |
On and after May 3, 2010, but prior to May 2, 2011 3,2011 | 2.5% |
On and after May 2, 2011, but prior to May 1, 2012 | 2.75% |
On and after May 1, 2012 | 3.0% |
4. | Vested Interest (Section 5.02): |
a. | Active Participants as of December 31, 2006, in the Wheelock, Inc. Section 401(k) Plan for Union Employees, were 100% vested in their accrued employer contributions upon the merger into this Plan. |
b. | Active Participants in the Wheelock, Inc. Section 401(k) Plan for Union Employees who had three or more Years of Service as of December 31, 2006, are 100% vested in all future Company Retirement Contributions made under the Plan. |
c. | Future Company Retirement Contributions for all active Participants in the Wheelock, Inc. Section 401(k) Plan for Union Employees who had less than three Years of Service as of December 31, 2006, are subject to the vesting schedule under this Plan. |
d. | All years of service that a participant accrued under the Wheelock, Inc. Section 401(k) Plan for Union Employees is recognized for purposes of determining a Member’s vested interest under this Plan. |
e. | The Normal Retirement Age for those Participants with an Account Balance as of December 31, 2006, in the Wheelock, Inc. Section 401(k) Plan for Union Employees will be age 60 under this Plan. |
1. | Covered Facility: Pinckneyville, Illinois |
2. | Union (Section 1.01 (19)): United Steelworkers of America, Local 7252. |
3. | Company Contributions (Section 3.02): |
Effective Date of Contribution Rate | Labor Grades | Contribution Rate |
On and After January 1, 2009, but prior to May 27, 2009 | 1-4 5-6 7 – Maintenance 1-2 7 – Maintenance 3-5 | $.62 $.67 $.75 $.90 |
On and after May 27, 2009 | 1-4 5-6 7 – Maintenance 1-2 7 – Maintenance 3-5 13 | $.62 $.67 $.75 $.90 $.42 |
4. | Vested Interest (Section 5.02): |
a. | Active Participants as of December 31, 2008, in the GS Metals Corp. Retirement Savings Plan were 100% vested in their accrued employer matching contributions upon the merger into this Plan. |
b. | All years of service that a participant has accrued under the GS Metals Corp. Retirement Savings Plan will be recognized for purposes of determining a Member’s vested interest in future Company Retirement Contributions under this Plan. Furthermore, there shall be no reduction in accrued years of service that may result from changes in the plan year, vesting computation period, and vesting computation method. |
c. | The normal retirement age for all former participants of the GS Metals Corp Retirement Savings Plan will be the later of age 55 or the fifth anniversary of the participant’s Employment Commencement Date. |
5. | Contribution Hour (Section 1.01 (10)):- Standard definition. Additionally, hours for paid personal days and days off awarded for perfect attendance are included. |
Title: | Title: Executive Vice President, |
1. | The first sentence of Article II is hereby amended in its entirety to read as follows: All officers of the Company and any other executive of the Company designated by the Board of Directors of Eaton Corporation plc (the "Board") shall be eligible to participate under the Limited Service Plan (a "Participant"). Each Participant shall be required to enter into an Agreement with the Company to evidence that participation. |
2. | The definition of "Change in Control" in Article III of the plan is hereby amended by replacing "Company" with "Eaton Corporation plc" in each place "Company" appears. |
3. | The first sentence of Section 8.06 of the Plan is hereby amended in its entirety to read as follows: The Company fully expects to continue the Plan but it reserves the right, at any time or from time to time, by action of the Board, to modify or amend the Plan, in whole or in part, or to terminate the Plan, in whole or in part, at any time and for any reason, including, but no limited to, adverse changes in federal tax laws. |
Year ended December 31 | ||||||||||||||||||||
(In millions) | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Income from continuing operations before income taxes and noncontrolling interests in consolidated subsidiaries | $ | 2,145 | $ | 1,761 | $ | 1,884 | $ | 1,251 | $ | 1,553 | ||||||||||
Adjustments | ||||||||||||||||||||
(Income) loss of equity investees | (11 | ) | (6 | ) | 2 | (2 | ) | (2 | ) | |||||||||||
Distributed income of equity investees | 9 | 4 | 77 | 19 | 3 | |||||||||||||||
Interest expensed | 237 | 250 | 290 | 165 | 154 | |||||||||||||||
Amortization of debt issue costs | 8 | 9 | 10 | 74 | 4 | |||||||||||||||
Estimated portion of rent expense representing interest | 75 | 81 | 80 | 66 | 65 | |||||||||||||||
Amortization of capitalized interest | 10 | 14 | 13 | 12 | 10 | |||||||||||||||
Adjusted income from continuing operations before income taxes | $ | 2,473 | $ | 2,113 | $ | 2,356 | $ | 1,585 | $ | 1,787 | ||||||||||
Fixed charges | ||||||||||||||||||||
Interest expensed | $ | 237 | $ | 250 | $ | 290 | $ | 165 | $ | 154 | ||||||||||
Interest capitalized | 13 | 13 | 11 | 23 | 18 | |||||||||||||||
Amortization of debt issue costs | 8 | 9 | 10 | 74 | 4 | |||||||||||||||
Estimated portion of rent expense representing interest | 75 | 81 | 80 | 66 | 65 | |||||||||||||||
Total fixed charges | $ | 333 | $ | 353 | $ | 391 | $ | 328 | $ | 241 | ||||||||||
Ratio of earnings to fixed charges | 7.43 | 5.99 | 6.03 | 4.83 | 7.41 |
Consolidated Subsidiaries (A) | Where Organized | |
Illumination Management Solutions, Inc. | California | |
Eaton Energy Solutions, Inc. | Colorado | |
Aeroquip International Inc. | Delaware | |
Bussmann International Holdings, LLC | Delaware | |
Bussmann International, Inc. | Delaware | |
CBE Services, Inc. | Delaware | |
Cooper B-Line, Inc. | Delaware | |
Cooper Bussmann, LLC | Delaware | |
Cooper Crouse-Hinds MTL, Inc. | Delaware | |
Cooper Crouse-Hinds, LLC | Delaware | |
Cooper Electrical International, LLC | Delaware | |
Cooper Enterprises LLC | Delaware | |
Cooper Finance USA, Inc. | Delaware | |
Cooper Industries International, LLC | Delaware | |
Cooper Industries Middle East, LLC | Delaware | |
Cooper Industries Poland, LLC | Delaware | |
Cooper Industries Vietnam, LLC | Delaware | |
Cooper Industries, LLC | Delaware | |
Cooper Interconnect, Inc. | Delaware | |
Cooper Lighting, LLC | Delaware | |
Cooper Notification, Inc. | Delaware | |
Cooper Power Systems, LLC | Delaware | |
Cooper Technologies Company | Delaware | |
Eaton Aerospace LLC | Delaware | |
Eaton Asia Investments Corporation | Delaware | |
Eaton Electric Holdings LLC | Delaware | |
Eaton Holding International LLC | Delaware | |
Eaton Hydraulics LLC | Delaware | |
Eaton Industrial Corporation | Delaware | |
Eaton Industries (Philippines), LLC | Delaware | |
Eaton International Corporation | Delaware | |
Eaton Worldwide LLC | Delaware | |
EIC Holding GP I | Delaware | |
EIC Holding GP II | Delaware | |
EIC Holding GP III | Delaware | |
EIC Holding GP IV | Delaware | |
EIC Holding I LLC | Delaware | |
EIC Holding II LLC | Delaware | |
EIC Holding III LLC | Delaware | |
EIC Holding IV LLC | Delaware | |
EIC Holding V LLC | Delaware | |
EIC Holding VI LLC | Delaware |
Consolidated Subsidiaries (A) | Where Organized | |
Intelligent Switchgear Organization LLC | Delaware | |
McGraw-Edison Development Corporation | Delaware | |
MTL Instruments LLC | Delaware | |
MTL Partners II, Inc. | Delaware | |
MTL Partners, Inc. | Delaware | |
Standard Automation & Control LP | Delaware | |
Vickers International Inc. | Delaware | |
Viking Electronics, Inc. | Delaware | |
Wright Line Holding, Inc. | Delaware | |
Wright Line LLC | Delaware | |
Azonix Corporation | Massachusetts | |
WPI-Boston Division, Inc. | Massachusetts | |
Eaton Ann Arbor LLC | Michigan | |
Cannon Technologies, Inc. | Minnesota | |
Cooper Wheelock, Inc. | New Jersey | |
RTK Instruments Limited Liability Company | New Jersey | |
Cooper Wiring Devices, Inc. | New York | |
Ephesus Lighting, Inc. | New York | |
Chagrin Highlands III Limited | Ohio | |
Eaton (US) LLC | Ohio | |
Eaton Aeroquip LLC | Ohio | |
Eaton CHB LLC | Ohio | |
Eaton Corporation | Ohio | |
Eaton Holding II LLC | Ohio | |
Eaton Holding LLC | Ohio | |
Eaton II (US) LLC | Ohio | |
Eaton Leasing Corporation | Ohio | |
Eaton US Holdings, Inc. | Ohio | |
Sure Power, Inc. | Oregon | |
Eaton Industries (Argentina) S.A. | Argentina | |
Cooper Electrical Australia Pty. Limited | Australia | |
Eaton Industries Pty. Ltd. | Australia | |
Elpro Technologies Pty. Limited | Australia | |
CTI-VIENNA Gesellschaft zur Prüfung elektrotechnischer Industrieprodukte GmbH | Austria | |
Eaton Holding (Austria) G.m.b.H. | Austria | |
Eaton Holding G.m.b.H. | Austria | |
Eaton Industries (Austria) G.m.b.H. | Austria | |
Eaton Holding SRL | Barbados | |
Eaton Electric SPRL | Belgium | |
Eaton Filtration BVBA | Belgium | |
Eaton Industries (Belgium) BVBA | Belgium | |
Cambridge International Insurance Company Ltd. | Bermuda | |
Cooper Finance Group Ltd. | Bermuda | |
Cooper Investment Group Ltd. | Bermuda | |
Eaton Industries Holdings Ltd. | Bermuda | |
Saturn Insurance Company Ltd. | Bermuda | |
Aeroquip do Brasil Ltda. | Brazil | |
Blinda Industria e Comercio Ltda. | Brazil | |
Bussmann do Brasil Ltda. | Brazil |
Consolidated Subsidiaries (A) | Where Organized | |
Cooper Power Systems do Brasil Ltda. | Brazil | |
Eaton Ltda. | Brazil | |
Eaton Power Solution Ltda. | Brazil | |
Hernis Scan System do Brasil Comercio E Servicos LTDA | Brazil | |
Moeller Electric Ltda. | Brazil | |
Moeller Industria de electro-electronicos do Amazonas Ltda. | Brazil | |
Digital Lighting Holdings Limited | British Virgin Islands | |
Phoenixtec International Corp. | British Virgin Islands | |
Senyuan International Investments Limited | British Virgin Islands | |
Silver Light International Limited | British Virgin Islands | |
Winner Hydraulics Ltd. | British Virgin Islands | |
Eaton Industries EOOD | Bulgaria | |
Aeroquip-Vickers Canada, Inc. | Canada | |
Cooper Finance (Canada) L.P. | Canada | |
Cooper Industries (Canada) Inc. | Canada | |
Cooper Industries (Electrical) Inc. | Canada | |
Cooper Industries Holdings (Canada) Inc. | Canada | |
Cyme International T & D Inc. | Canada | |
Eaton ETN Offshore Company | Canada | |
Eaton ETN Offshore II Company | Canada | |
Eaton Industries (Canada) Company | Canada | |
Fifth Light Technology Ltd. | Canada | |
Aeroquip Financial Ltd. | Cayman Islands | |
Cooper Colombia Investments, Ltd. | Cayman Islands | |
Cooper Netherlands Investments, Ltd. | Cayman Islands | |
Cooper Switzerland Investments, Ltd. | Cayman Islands | |
Cutler-Hammer Electrical Company | Cayman Islands | |
Cutler-Hammer Industries Ltd. | Cayman Islands | |
Eaton Holding I Limited | Cayman Islands | |
Eaton Holding II Limited | Cayman Islands | |
Eaton Holding III Limited | Cayman Islands | |
Georgetown Financial Services Ltd. | Cayman Islands | |
Green Holding Company | Cayman Islands | |
Senyuan International Holdings Limited | Cayman Islands | |
Eaton Industries (Chile) S.p.A. | Chile | |
Beijing Internormen-Filter Ltd. Co. | China | |
Cooper (Ningbo) Electric Co., Ltd. | China | |
Cooper Edison (Pingdingshan) Electronic Technologies Co., Ltd. | China | |
Cooper Electric (Changzhou) Co., Ltd. | China | |
Cooper Electric (Shanghai) Co., Ltd. | China | |
Cooper Electronic Technologies (Shanghai) Co., Ltd. | China | |
Cooper Shanghai Power Capacitor Co., Ltd. | China | |
Cooper Xi'an Fusegear Co., Ltd. | China | |
Cooper Yuhua (Changzhou) Electric Equipment Manufacturing Co., Ltd. | China | |
Digital Lighting (Dong Guan) Co., Ltd. | China | |
Dongguan Cooper Electronics Co. Ltd. | China | |
Dongguan Fu Li An Electronics Co., Ltd. | China | |
Dongguan Wiring Devices Electronics Co., Ltd. | China | |
Eaton (China) Investments Co., Ltd. | China |
Consolidated Subsidiaries (A) | Where Organized | |
Eaton Electrical (Zhongshan) Co., Ltd. | China | |
Eaton Electrical Equipment Co., Ltd. | China | |
Eaton Electrical Ltd. | China | |
Eaton Filtration (Shanghai) Co. Ltd. | China | |
Eaton Fluid Power (Shanghai) Co., Ltd. | China | |
Eaton Hydraulics (Luzhou) Co., Ltd. | China | |
Eaton Hydraulics (Ningbo) Co., Ltd. | China | |
Eaton Hydraulics Systems (Jining) Co., Ltd. | China | |
Eaton Industrial Clutches and Brakes (Shanghai) Co., Ltd. | China | |
Eaton Industries (Jining) Co., Ltd | China | |
Eaton Industries (Shanghai) Co., Ltd. | China | |
Eaton Industries (Wuxi) Co. Ltd. | China | |
Eaton Power Quality (Shanghai) Co., Ltd. | China | |
Eaton Senstar Automotive Fluid Connector (Shanghai) Co., Ltd. | China | |
Eaton Truck and Bus Components (Shanghai) Co., Ltd. | China | |
Funke+Huster (Tianjin) Electronics Co. Ltd. | China | |
Guangzhou Nittan Valve Co. Ltd. | China | |
Kaicheng Funke+Huster (Tangshan) Mining Electrical Co. Ltd. | China | |
Lian Zheng Electronics (Shenzhen) Co., Ltd. | China | |
Moeller Electric (Shanghai) Co., Ltd. | China | |
Phoenixtec Electronics (Shenzhen) Co., Ltd. | China | |
Santak Electronics (Shenzhen) Co., Ltd. | China | |
Shanghai Eaton Engine Components Co., Ltd. | China | |
UPE Electronics (Shenzhen) Co., Ltd. | China | |
Cooper Industries Colombia S.A.S. | Columbia | |
Eaton Industries (Colombia) S.A.S. | Columbia | |
Eaton Electrical S.A. | Costa Rica | |
Eaton Electric s.r.o. | Czech Republic | |
Eaton Elektrotechnika s.r.o. | Czech Republic | |
Eaton Industries s.r.o. | Czech Republic | |
Eaton Electric ApS | Denmark | |
Eaton Filtration (Denmark) ApS | Denmark | |
Cutler-Hammer, SRL | Dominican Republic | |
Eaton Industries (Egypt) LLC | Egypt | |
Eaton Holec OY | Finland | |
Eaton Power Quality OY (Finland) | Finland | |
Cooper Capri S.A.S. | France | |
Cooper Menvier France SARL | France | |
Cooper Securite S.A.S. | France | |
Eaton France Holding S.A.S. | France | |
Eaton Industries (France) S.A.S. | France | |
Eaton Power Quality S.A.S. | France | |
Eaton S.A.S. | France | |
Eaton Technologies S.A. | France | |
Martek Power F SAS | France | |
MP Group SAS | France | |
MTL Instruments SARL | France | |
Sefelec SAS | France | |
Semelec SAS | France |
Consolidated Subsidiaries (A) | Where Organized | |
CEAG Notlichtsysteme GmbH | Germany | |
Cooper Crouse-Hinds GmbH | Germany | |
Cooper Germany Holdings GmbH | Germany | |
Cooper Industries Finanzierungs-GbR | Germany | |
Cooper Industries Holdings GmbH | Germany | |
Cooper Investments Verwaltungsgesellschaft GmbH | Germany | |
Eaton Electric G.m.b.H. | Germany | |
Eaton Electrical IP G.m.b.H. & Co. KG | Germany | |
Eaton Germany G.m.b.H. | Germany | |
Eaton GmbH & Co. KG | Germany | |
Eaton Holding SE & Co. KG | Germany | |
Eaton Industrial IP G.m.b.H. & Co. KG | Germany | |
Eaton Industries G.m.b.H. | Germany | |
Eaton Industries Holding G.m.b.H. | Germany | |
Eaton Production International G.m.b.H. | Germany | |
Eaton Protection Systems IP G.m.b.H. & Co. KG | Germany | |
Eaton Safety IP G.m.b.H. & Co. KG | Germany | |
Eaton SE | Germany | |
Eaton Technologies G.m.b.H. | Germany | |
Eaton Technologies IP G.m.b.H. & Co. KG | Germany | |
FHF Bergbautechnik GmbH & Co. KG | Germany | |
FHF Funke+Huster Fernsig GmbH | Germany | |
FHF New World GmbH | Germany | |
Funke+Huster GmbH | Germany | |
GeCma Components electronic GmbH | Germany | |
Hein Moeller Stiftung G.m.b.H. | Germany | |
Institute for International Product Safety G.m.b.H. | Germany | |
Martek Power GmbH | Germany | |
MTL Instruments GmbH | Germany | |
Sefelec GmbH | Germany | |
Cooper Univel S.A. | Greece | |
Digital Lighting Co., Limited | Hong Kong | |
Eaton Enterprises Limited | Hong Kong | |
Eaton Power Quality Limited | Hong Kong | |
Martek Power Limited | Hong Kong | |
Riseson International Limited | Hong Kong | |
Scoremax Limited | Hong Kong | |
Silver Victory Hong Kong Limited | Hong Kong | |
Tai Ah Electrical Ltd. | Hong Kong | |
Vickers Systems Limited | Hong Kong | |
Cooper Bussmann Hungaria Kft. | Hungary | |
Eaton Enterprises (Hungary) Kft. | Hungary | |
Eaton Industries KFT | Hungary | |
Cooper India Private Limited | India | |
Eaton Fluid Power Limited | India | |
Eaton India Innovation Center LLP | India | |
Eaton Industrial Systems Private Limited | India | |
Eaton Industries Private Limited | India | |
Eaton Power Quality Private Limited | India |
Consolidated Subsidiaries (A) | Where Organized | |
Eaton Technologies Private Limited | India | |
Internormen Filters Private Limited | India | |
MTL Instruments Private Limited | India | |
The Oxalis Protection Technology India Private Limited | India | |
PT. Eaton Industries | Indonesia | |
PT. Fluid Sciences Batam | Indonesia | |
Abeiron III Limited | Ireland | |
Cooper Industries | Ireland | |
Cooper Industries Trading Limited | Ireland | |
Eaton Capital | Ireland | |
Eaton Finance (Ireland) Limited | Ireland | |
Eaton Industries (Ireland) Ltd. | Ireland | |
Tractech (Ireland) Limited | Ireland | |
Tractech Industries (Ireland) Limted | Ireland | |
TT (Ireland) Acquisition Limited | Ireland | |
Eaton Industries (Israel) Ltd. | Israel | |
Cooper Csa Srl | Italy | |
Eaton Filtration (Italy) S.r.l. | Italy | |
Eaton Fluid Power S.r.l. | Italy | |
Eaton Industries (Italy) S.r.l. | Italy | |
Eaton S.r.l. | Italy | |
Gitiesse S.r.l. | Italy | |
MTL Italia Srl | Italy | |
Cooper Industries Japan K.K. | Japan | |
Eaton Electric (Japan) Ltd. | Japan | |
Eaton Filtration Ltd. | Japan | |
Eaton Industries (Japan) Ltd. | Japan | |
Eaton Japan Co., Ltd. | Japan | |
Cooper Korea Ltd. | Korea | |
Eaton Industries (Korea) Limited | Korea | |
Shinhwa Takahashi Precision Co., Ltd. | Korea | |
Eaton Electric S.I.A. | Latvia | |
Aeroquip-Vickers International S.a.r.L. | Luxembourg | |
Cooper International Holdings S.a.r.l. | Luxembourg | |
Cooper Investment Group S a.r.l. | Luxembourg | |
Cooper Offshore Holdings S.a.r.l. | Luxembourg | |
Eaton Controls (Luxembourg) S.a.r.l. | Luxembourg | |
Eaton Finance S.a.r.l. | Luxembourg | |
Eaton Holding II S.a.r.l. | Luxembourg | |
Eaton Holding III S.a.r.l. | Luxembourg | |
Eaton Holding IV S.a.r.l. | Luxembourg | |
Eaton Holding IX S.a.r.l. | Luxembourg | |
Eaton Holding S.a.r.l. | Luxembourg | |
Eaton Holding V S.a.r.l. | Luxembourg | |
Eaton Holding VI S.a.r.l. | Luxembourg | |
Eaton Holding VIII S.a.r.l. | Luxembourg | |
Eaton Holding X S.a.r.l. | Luxembourg | |
Eaton Holding XII B.V./S.a.r.l. | Luxembourg | |
Eaton Industries (Luxembourg) B.V./S.a.r.l. | Luxembourg |
Consolidated Subsidiaries (A) | Where Organized | |
Eaton Moeller S.a.r.l. | Luxembourg | |
Eaton Services S.a.r.l. | Luxembourg | |
Eaton Technologies (Luxembourg) S.a.r.l. | Luxembourg | |
Martek Power SA | Luxembourg | |
Cooper Industries Malaysia SDN BHD | Malaysia | |
Eaton Industries Sdn. Bhd. | Malaysia | |
ETN Asia International Limited | Mauritius | |
ETN Holding 1 Limited | Mauritius | |
ETN Holding 2 Limited | Mauritius | |
ETN Holding 3 Limited | Mauritius | |
Arrow-Hart, S. de R.L. de C.V. | Mexico | |
Bussmann, S. de R.L. de C.V. | Mexico | |
Componentes de Iluminacion, S. de R.L. de C.V. | Mexico | |
Cooper Crouse-Hinds, S. de R.L. de C.V. | Mexico | |
Cooper Lighting de Mexico, S. de R.L. de C.V. | Mexico | |
Cooper Mexico Distribucion, S. de R.L. de C.V. | Mexico | |
Cooper Wiring Devices de Mexico, S.A de C.V. | Mexico | |
Cooper Wiring Devices Manufacturing, S. de R.L. de C.V. | Mexico | |
Eaton Controls, S. de R.L. de C.V. | Mexico | |
Eaton Enterprises, S. de R.L. de C.V. | Mexico | |
Eaton Industries, S. de R.L. de C.V. | Mexico | |
Eaton Solutions, S. de R.L. de C.V. | Mexico | |
Eaton Technologies, S. de R.L. de C.V. | Mexico | |
Eaton Trading Company, S. de R.L. de C.V. | Mexico | |
Eaton Truck Components, S. de R.L. de C.V. | Mexico | |
Electromanufacturas, S de R.L. de C.V. | Mexico | |
Iluminacion Cooper de las Californias, S de R.L. de C.V. | Mexico | |
Martek Power S.A. de C.V. | Mexico | |
Eaton Electric S.a.r.l. | Morocco | |
Eaton Industries (Morocco) LLC | Morocco | |
Cooper Crouse-Hinds B.V. | Netherlands | |
Cooper Industries Global B.V. | Netherlands | |
Cooper Safety B.V. | Netherlands | |
Eaton B.V. | Netherlands | |
Eaton C.V. | Netherlands | |
Eaton Holding (Netherlands) B.V. | Netherlands | |
Eaton Holding I B.V. | Netherlands | |
Eaton Holding III B.V. | Netherlands | |
Eaton Holding V B.V. | Netherlands | |
Eaton Holding VI B.V. | Netherlands | |
Eaton Holding VII B.V. | Netherlands | |
Eaton Industries (Netherlands) B.V. | Netherlands | |
Eaton International B.V. | Netherlands | |
Eaton Moeller B.V. | Netherlands | |
MTL Instruments B.V. | Netherlands | |
Turlock B.V. | Netherlands | |
Eaton Industries Company | New Zealand | |
Eaton International Industries Nigeria Limited | Nigeria | |
Cooper Crouse-Hinds AS | Norway |
Consolidated Subsidiaries (A) | Where Organized | |
Eaton Electric AS | Norway | |
Hernis Scan Systems A/S | Norway | |
Eaton Industries Panama S.A. | Panama | |
Eaton Industries SAC | Peru | |
Eaton Automotive Components Spolka z.o.o. | Poland | |
Eaton Automotive Spolka z.o.o. | Poland | |
Eaton Automotive Systems Spolka z.o.o. | Poland | |
Eaton Electric Spolka z.o.o. | Poland | |
Eaton Filtration (Poland) Sp. z.o.o. | Poland | |
Eaton I Spolka z.o.o. | Poland | |
Eaton Truck Components Spolka z.o.o. | Poland | |
Cooper Pretronica Lda. | Portugal | |
Eaton Madeira SGPS Lda. | Portugal | |
Cooper Industries Romania SRL | Romania | |
Eaton Electric S.r.l. | Romania | |
Eaton Electro Productie S.r.l. | Romania | |
Cooper Industries Russia LLC | Russia | |
Eaton LLC | Russia | |
Eaton II LP | Scotland | |
Eaton III LP | Scotland | |
Eaton Industries LP | Scotland | |
Eaton IV LP | Scotland | |
Eaton LP | Scotland | |
Eaton Manufacturing LP | Scotland | |
Eaton Electric d.o.o. | Serbia | |
Cooper Crouse-Hinds Pte. Ltd. | Singapore | |
Hernis Scan Systems - Asia Pte. Ltd. | Singapore | |
Oxalis Asia Pacific Pte Ltd | Singapore | |
Eaton Electric s.r.o. | Slovak Republic | |
Eaton Electric (South Africa) Pty Ltd. | South Africa | |
Eaton Hydraulics (Proprietary) Limited | South Africa | |
Eaton Truck Components (Proprietary) Ltd. | South Africa | |
Aeroquip Iberica S.L. | Spain | |
Cooper Crouse-Hinds, S.A. | Spain | |
Eaton Industries (Spain) S.L. | Spain | |
Productos Eaton Livia S.L. | Spain | |
Eaton Holec AB | Sweden | |
Eaton Power Quality AB | Sweden | |
Ultronics Nordic Sales AB | Sweden | |
Eaton Automation G.m.b.H | Switzerland | |
Eaton Automation Holding G.m.b.H. | Switzerland | |
Eaton Industries II G.m.b.H. | Switzerland | |
Eaton Industries Manufacturing G.m.b.H. | Switzerland | |
Eaton Manufacturing G.m.b.H. | Switzerland | |
Eaton Manufacturing II G.m.b.H. | Switzerland | |
Eaton Manufacturing III G.m.b.H. | Switzerland | |
Eaton Switzerland Holding I GmbH | Switzerland | |
Eaton Switzerland Holding II GmbH | Switzerland | |
Centralion Industrial Inc. | Taiwan |
Consolidated Subsidiaries (A) | Where Organized | |
Eaton Phoenixtec MMPL Co. Ltd. | Taiwan | |
RTE Far East Corporation | Taiwan | |
Eaton Electric (Thailand) Ltd. | Thailand | |
Eaton Electric Company Ltd. | Thailand | |
Eaton Industries (Thailand) Ltd. | Thailand | |
Martek Power Tunisie SARL | Tunisia | |
Eaton Elektrik Ticaret Limited Sirketi | Turkey | |
Polimer Hortum Teknolojileri Ticaret Limited Sirketi | Turkey | |
Polimer Kaucuk Sanayi ve Pazarlama A.S. | Turkey | |
D.P. Eaton Electric | Ukraine | |
Cooper Industries FZE | United Arab Emirates | |
Cooper Industries Healthcare Solutions FZ-LLC | United Arab Emirates | |
Eaton FZE | United Arab Emirates | |
Aphel Ltd. | United Kingdom | |
Aphel Technologies Ltd. | United Kingdom | |
Cooper (UK) Group Limited | United Kingdom | |
Cooper Bussmann (U.K.) Limited | United Kingdom | |
Cooper Controls (Watford) Limited | United Kingdom | |
Cooper Controls Limited | United Kingdom | |
Cooper Crouse-Hinds (UK) Ltd. | United Kingdom | |
Cooper Fulleon Limited | United Kingdom | |
Cooper Industries UK Subco Limited | United Kingdom | |
Cooper Lighting and Safety Limited | United Kingdom | |
Cooper MEDC Limited | United Kingdom | |
Cooper Security Limited | United Kingdom | |
Eaton Controls (UK) Limited | United Kingdom | |
Eaton Electric Limited | United Kingdom | |
Eaton Electric Sales Ltd. | United Kingdom | |
Eaton Holding (UK) II Limited | United Kingdom | |
Eaton Holding Limited | United Kingdom | |
Eaton Industries (England) Limited | United KIngdom | |
Eaton Industries (U.K.) Limited | United Kingdom | |
Eaton Limited | United Kingdom | |
Eaton Power Quality Limited | United Kingdom | |
Eaton Power Solutions Limited | United Kingdom | |
Eaton Safety Limited | United Kingdom | |
EX Innovations Limited | United Kingdom | |
Martek Power Limited (UK) | United Kingdom | |
Measurement Technology Limited | United Kingdom | |
Menvier Overseas Holdings Limited | United Kingdom | |
Mount Engineering Limited | United Kingdom | |
Ocean Technical Systems Limited | United Kingdom | |
Oxalis Group Limited | United Kingdom | |
Polaron Components Limited | United Kingdom | |
Redapt Engineering Co. Limited | United Kingdom | |
RTK Instruments Limited | United Kingdom | |
The MTL Instruments Group Limited | United Kingdom | |
Eaton Electrical, S.A. | Venezuela | |
(A) Other Eaton subsidiaries, many inactive, are not listed above. If considered in the aggregate, they would not be material. |
Registration number | Description | Filing date | ||
333-207689 | Form S-8 Registration Statement-2015 Stock Plan | October 30, 2015 | ||
333-202308 | Form S-3 Registration Statement | February 26, 2015 | ||
333-185206 | Multiple plans - Form S-8 Registration Statement | November 30, 2012 | ||
Amended and Restated 2012 Stock Plan | ||||
Second Amended and Restated 2009 Stock Plan | ||||
Amended and Restated 2008 Stock Plan | ||||
Amended and Restated 2004 Stock Plan | ||||
Amended and Restated 2002 Stock Plan | ||||
Amended and Restated 1998 Stock Plan | ||||
Amended and Restated 1995 Stock Plan | ||||
Eaton Incentive Compensation Deferral Plan II | ||||
Eaton Corporation Deferred Incentive Compensation Plan II | ||||
2005 Non-Employee Director Fee Deferral Plan | ||||
Eaton Savings Plan | ||||
Eaton Personal Investment Plan | ||||
Eaton Puerto Rico Retirement Savings Plan | ||||
Cooper Retirement Savings and Stock Ownership Plan | ||||
/s/ Ernst & Young LLP | |||
Cleveland, Ohio | |||
February 24, 2016 |
/s/ Alexander M. Cutler | /s/ Richard H. Fearon | ||
Alexander M. Cutler, Chairman; Principal Executive Officer; Director | Richard H. Fearon, Principal Financial Officer; Director | ||
/s/ Ken D. Semelsberger | /s/ Craig Arnold | ||
Ken D. Semelsberger, Principal Accounting Officer | Craig Arnold, Director | ||
/s/ Todd M. Bluedorn | /s/ Christopher M. Connor | ||
Todd M. Bluedorn, Director | Christopher M. Connor, Director | ||
/s/ Michael J. Critelli | /s/ Charles E. Golden | ||
Michael J. Critelli, Director | Charles E. Golden, Director | ||
/s/ Linda A. Hill | /s/ Arthur E. Johnson | ||
Linda A. Hill, Director | Arthur E. Johnson, Director | ||
/s/ Ned C. Lautenbach | /s/ Deborah L. McCoy | ||
Ned C. Lautenbach, Director | Deborah L. McCoy, Director | ||
/s/ Sandra Pianalto | |||
Gregory R. Page, Director | Sandra Pianalto, Director | ||
/s/ Gerald B. Smith | |||
Gerald B. Smith, Director |
1. | I have reviewed this annual report on Form 10-K of Eaton Corporation plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 24, 2016 | /s/ Alexander M. Cutler | ||||
Alexander M. Cutler | ||||||
Principal Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Eaton Corporation plc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | February 24, 2016 | /s/ Richard H. Fearon | ||||
Richard H. Fearon | ||||||
Principal Financial Officer |
Date: | February 24, 2016 | /s/ Alexander M. Cutler | ||||
Alexander M. Cutler | ||||||
Principal Executive Officer |
Date: | February 24, 2016 | /s/ Richard H. Fearon | ||||
Richard H. Fearon | ||||||
Principal Financial Officer |
Document and Entity Information Document - USD ($) shares in Millions, $ in Billions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Jan. 31, 2016 |
Jun. 30, 2015 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Eaton Corp plc | ||
Entity Central Index Key | 0001551182 | ||
Trading Symbol | ETN | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 31.6 | ||
Entity Ordinary Shares, Shares Outstanding | 458.9 |
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement [Abstract] | |||
Net sales | $ 20,855 | $ 22,552 | $ 22,046 |
Cost of products sold | 14,292 | 15,646 | 15,369 |
Selling and administrative expense | 3,596 | 3,810 | 3,886 |
Litigation settlements | 0 | 644 | 0 |
Research and development expense | 625 | 647 | 644 |
Interest expense - net | 232 | 227 | 271 |
Other (income) expense - net | (35) | (183) | (8) |
Income before income taxes | 2,145 | 1,761 | 1,884 |
Income tax (benefit) expense | 164 | (42) | 11 |
Net income | 1,981 | 1,803 | 1,873 |
Less net income for noncontrolling interests | (2) | (10) | (12) |
Net income attributable to Eaton ordinary shareholders | $ 1,979 | $ 1,793 | $ 1,861 |
Net income per share attributable to Eaton ordinary shareholders | |||
Diluted | $ 4.23 | $ 3.76 | $ 3.90 |
Basic | $ 4.25 | $ 3.78 | $ 3.93 |
Weighted-average number of ordinary shares outstanding | |||
Diluted | 467.1 | 476.8 | 476.7 |
Basic | 465.5 | 474.1 | 473.5 |
Cash dividends declared per ordinary share | $ 2.20 | $ 1.96 | $ 1.68 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Net income | $ 1,981 | $ 1,803 | $ 1,873 |
Less net income for noncontrolling interests | (2) | (10) | (12) |
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 |
Other comprehensive (loss) income, net of tax | |||
Currency translation and related hedging instruments | (1,078) | (1,019) | (28) |
Pensions and other postretirement benefits | 111 | (315) | 429 |
Cash flow hedges | 3 | (5) | 3 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (964) | (1,339) | 404 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | $ 1,015 | $ 454 | $ 2,265 |
Consolidated Balance Sheets Parentheticals - shares shares in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Ordinary shares outstanding | 458.8 | 467.9 |
Consolidated Statements of Shareholders' Equity Parenthetical - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2014 |
Dec. 31, 2013 |
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Consolidated Statements of Shareholders' Equity [Abstract] | |||
Issuance of shares under equity-based compensation plans - net, net of income tax benefit | $ 1 | $ 20 | $ 32 |
Eaton Corporation plc ordinary share par value | $ 0.01 |
Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2015 | |
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 a power management company with 2015 net sales of $20.9 billion. The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 97,000 employees in over 60 countries and sells products to customers in more than 175 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. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates 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. During the fourth quarter of 2015, the Company early adopted Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17). ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the Company's consolidated balance sheet starting in 2017. The Company elected to apply this standard prospectively for 2015 financial statements. As a result, prior periods were not retrospectively adjusted. Certain prior year amounts have been reclassified to conform to the current year presentation. Revenue Recognition Sales of products are recognized when a sales agreement is in place, products have been shipped to unaffiliated customers and title has transferred in accordance with shipping terms, the selling price is fixed and determinable and collectability is reasonably assured, all significant related acts of performance have been completed, and no other significant uncertainties exist. Shipping and handling costs billed to customers are included in Net sales and the related costs in Cost of products sold. Although the majority of the sales agreements contain standard terms and conditions, there are agreements that contain multiple elements or non-standard terms and conditions. As a result, judgment is required to determine the appropriate accounting, including whether the deliverables specified in these agreements should be treated as separate units of accounting for recognition purposes, and, if so, how the sales price should be allocated among the elements and when to recognize sales for each element. For delivered elements, sales generally are recognized only when the delivered elements have standalone value and there are no uncertainties regarding customer acceptance. Sales for service contracts generally are recognized as the services are provided. Eaton records reductions to revenue for 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. Goodwill and Indefinite Life Intangible Assets Goodwill is evaluated annually for impairment as of July 1 using either a quantitative or qualitative analysis. Goodwill is tested for impairment at the reporting unit level, which is equivalent to Eaton's operating segments and based on the net assets for each segment, including goodwill and intangible assets. Goodwill is assigned to each operating segment, 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 discounted cash flow model considers forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows are based on the Company's long-term operating plan and a terminal value is used to estimate the operating segment'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 significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows of the respective reporting unit. Sensitivity analyses are performed in order to assess the reasonableness of the assumptions and the resulting estimated fair values. 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 an operating segment is less than its carrying amount. Goodwill impairment testing for 2015 and 2014 was performed using a qualitative analysis, which 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 assessment, performed in 2013. The results of these qualitative analyses did not indicate a need to perform a quantitative analysis. Based on qualitative analyses performed in 2015 and 2014 and a quantitative analysis performed in 2013, the fair values of Eaton's reporting units continue to substantially exceed the respective carrying amounts. Indefinite life intangible assets consist of 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 2015 and 2014 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 2015 and 2014, the fair value of indefinite lived intangible assets substantially exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 5. 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. Cost of buildings are depreciated generally over 40 years and machinery and equipment over 3 to 10 years. At December 31, 2015, the weighted-average amortization period for intangible assets subject to amortization was 17 years for patents and technology, primarily as a result of the long life of aircraft platforms; 17 years for customer relationships; and 16 years for trademarks. Software is generally amortized up to a life of 10 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, but is approximately 11 years on a weighted average basis. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. 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. See Note 8 for additional information about warranty accruals. 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 the 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. Penalties on unrecognized income tax benefits have been accrued for jurisdictions where penalties are automatically applied to any deficiency, regardless of the merit of the position. For additional information about income taxes, see Note 9. Equity-Based Compensation Eaton recognizes equity-based compensation expense based on the grant date fair value of the award. Awards with service 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. Participants awarded restricted stock units (RSUs) do not receive dividends; therefore, their fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three or four years. The fair value of restricted stock awards (RSAs) and performance share units (PSUs) are determined based on the closing market price of the Company’s ordinary shares at the date of grant. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over three or four years. PSUs are entitled to receive one ordinary share for each PSU that vests based on satisfaction of a three-year service period and the achievement of certain performance metrics. Stock options are granted with an exercise price equal to the closing market price of Eaton ordinary shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. See Note 11 for additional information about equity-based compensation. 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 13 for additional information about hedges and derivative financial instruments. Recently Issued Accounting Pronouncement In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). This accounting standard supersedes all existing US GAAP revenue recognition guidance. Under ASU 2014-09, a company will recognize revenue when it transfers the control of promised goods or services to customers in an amount that reflects the consideration which the company expects to collect in exchange for those goods or services. ASU 2014-09 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14). This accounting standard defers the effective date of ASU 2014-09 for one year and permits early adoption as of the original effective date. Eaton is evaluating the impact of ASU 2014-09 and an estimate of the impact to the consolidated financial statements cannot be made at this time. |
Acquisitions and Sales of Businesses |
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Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Sales of Businesses | ACQUISITIONS AND SALES OF BUSINESSES Acquisition of Ephesus Lighting, Inc. On October 28, 2015, Eaton acquired Ephesus Lighting, Inc. (Ephesus). Ephesus is a leader in LED lighting for stadiums and other high lumen outdoor and industrial applications. Its sales over the last twelve months were $23. Ephesus is reported within the Electrical Products business segment. Acquisition of UK Safety Technology Manufacturer Oxalis Group Ltd. On January 12, 2015, Eaton acquired Oxalis Group Ltd. (Oxalis). Oxalis is a manufacturer of closed-circuit television camera stations, public address and general alarm systems and other electrical products for the hazardous area, marine and industrial communications markets. Its sales over the last twelve months were $9. Oxalis is reported within the Electrical Systems and Services business segment. Sale of Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions On May 9, 2014, Eaton sold the Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to Safran for $270, which resulted in a pre-tax gain of $154. Sale of Apex Tool Group, LLC In July 2010, Cooper Industries plc (Cooper) formed a joint venture, named Apex Tool Group, LLC (Apex), with Danaher Corporation (Danaher). On February 1, 2013, Cooper and Danaher sold Apex to Bain Capital for approximately $1.6 billion. |
Acquisition Integration and Restructuring Charges |
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Acquisition Integration and Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition Integration and Restructuring Charges | ACQUISITION INTEGRATION CHARGES Eaton incurs integration charges and transaction costs related to acquired businesses. A summary of these charges follows:
Business segment integration charges in 2015 and 2014 related primarily to the integration of Cooper Industries plc, which was acquired in 2012. Business segment integration charges in 2013 related primarily to the integrations of Cooper and Polimer Kaucuk Sanayi ve Pazarlama A.S., which was acquired in 2012. These charges were included in Cost of products sold or Selling and administrative expense, as appropriate. In Business Segment Information, the charges reduced Operating profit of the related business segment. The integration of Cooper included costs related to restructuring activities Eaton undertook in an effort to gain efficiencies in selling, marketing, traditional back-office functions and manufacturing and distribution. These actions resulted in charges of $20 during 2015, comprised of severance costs and other expense totaling $1 and $19, respectively, of which $14 were incurred in the Electrical Products segment, and $6 were incurred in the Electrical Systems and Services segment. In 2014, we incurred $95 of charges related to Cooper restructuring activities, comprised of severance costs totaling $69 and other expenses totaling $26, of which $53 and $42 were recognized in the Electrical Products and Electrical Systems and Services business segments, respectively. During 2013, these actions, comprised primarily of severance costs, resulted in charges of $36, of which $19 and $17 were recognized in the Electrical Products and Electrical Systems and Services business segments, respectively. Corporate integration charges related primarily to the acquisition of Cooper. These charges were included in Selling and administrative expense. In Business Segment Information, the charges were included in Other corporate expense - net. Acquisition-related transaction costs, such as investment banking, legal, and other professional fees, and costs associated with change in control agreements, are not included as a component of consideration transferred in an acquisition but are expensed as incurred. Acquisition-related transaction costs in 2013 related to the acquisition of Cooper and were included in Corporate above. These charges were included in Selling and administrative expense, Interest expense - net and Other (income) expense - net. In Business Segment Information, the charges were included in Interest expense - net and Other corporate expense - net. See Note 15 for additional information about business segments. |
Restructuring Charges Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING CHARGES During 2015, Eaton announced its commitment to undertake actions to reduce its cost structure in all business segments and at corporate. The restructuring charges incurred under this plan were $129 in 2015. These restructuring activities are anticipated to be $140 in 2016 and $130 in 2017. A summary of restructuring charges by segment follows:
A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows:
During 2014, Eaton undertook additional restructuring activities in an effort to gain efficiencies in operations. These actions resulted in charges of $54 during 2014, comprised of severance costs totaling $48 and other expenses totaling $6, of which $32, $16, $2 and $4 were recognized in the Vehicle, Hydraulics and Aerospace business segments, and Corporate, respectively. These charges were included in Cost of products sold, Selling and administrative expenses or Other income-net, as appropriate. In Business Segment Information, the charges reduced Operating profit of the related business segment. See Note 15 for additional information about business segments. |
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GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by segment follow:
A summary of other intangible assets follows:
Amortization expense related to intangible assets subject to amortization in 2015, and estimated amortization expense for each of the next five years, follows:
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT A summary of long-term debt, including the current portion, follows:
On October 3, 2014, Eaton refinanced a $500, five-year revolving credit facility and a $750, three-year revolving credit facility with a $500, four-year revolving credit facility that will expire October 3, 2018 and a $750, five-year revolving credit facility that will expire October 3, 2019, respectively. Eaton also maintains a $750, five-year revolving credit facility that will expire June 14, 2017. These refinancings maintain long-term revolving credit facilities at a total of $2,000. The revolving credit facilities 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, 2015 or 2014. The Company had available lines of credit of $850 from various banks for the issuance of letters of credit, of which there was $351 issued at December 31, 2015. Borrowings outside the United States are generally denominated in local currencies. The Company repaid the 5.45% debentures on April 1, 2015 for $300, the 4.65% notes on June 15, 2015 for $100 and the 0.95% senior notes for $600 on November 2, 2015. On March 20, 2014 and June 16, 2014, the Company repaid the $250, 5.95% notes due 2014 and the $300, floating rate notes due 2014, respectively. Short-term debt of $426 at December 31, 2015 included $400 short-term commercial paper in the United States, which had a weighted average interest rate of 0.78%, $8 of other short-term debt in the United States, and $18 of short-term debt outside the United States. The senior notes registered by Eaton Corporation under the Securities Act of 1933 (the Senior Notes) are fully and unconditionally guaranteed on an unsubordinated, unsecured basis by Eaton and certain of its direct and indirect subsidiaries. Substantially all of the other debt instruments issued by the Company or any of its subsidiaries is similarly guaranteed on an unsubordinated, unsecured basis by the identical group of guaranteeing entities. See Note 16 for additional information about the Senior Notes. 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 follow:
Interest paid on debt follows:
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Retirement Benefits Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS Eaton has defined benefits pension plans and other postretirement benefits plans. Obligations and Funded Status
Change in Benefit Obligations
Change in Plan Assets
The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 follow:
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss follow:
Benefits Expense
The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2016 follow:
Retirement Benefits Plans Assumptions For purposes of determining liabilities related to pension plans and other postretirement benefits plans in the United States, the Company updated its mortality assumption in 2014 to use the RP-2014 tables with a generational improvement scale based on MP-2014. In 2015, the Company updated its mortality assumption to use 2014 tables and a generational improvement scale that are based on MP-2015. Beginning in 2016, the Company will adopt a change in the method it will use to estimate the service and interest cost components of net periodic benefit cost for its defined benefit pension and other postretirement benefit plans. Historically, for the vast majority of its plans, the service and interest cost components were estimated using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in 2016, the Company will use a spot rate approach by applying the specific spot rates along the yield curve to the relevant projected cash flows in the estimation of the service and interest components of benefit cost, resulting in a more precise measurement. This change does not affect the measurement of total benefit obligations. The change will be accounted for as a change in estimate and, accordingly, will be accounted for prospectively starting in 2016. The discount rates that will be used to measure service and interest cost during 2016 are 4.3% and 3.3%, respectively. The discount rate that was measured at December 31, 2015 and would have been used for service and interest cost under the prior estimation method was 4.0%. The reductions in service cost and interest cost for 2016 associated with this change in estimate are expected to be $3 and $42, respectively. Pension Plans
The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical data taking into account each plan's target asset allocation. The discount rate was 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 follow:
Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A 1-percentage point change in the assumed health care cost trend rates would have the following effects:
Employer Contributions to Retirement Benefits Plans Contributions to pension plans that Eaton expects to make in 2016, and made in 2015, 2014 and 2013, follow:
The following table provides the estimated pension and other postretirement benefit payments for each of the next five years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, would reduce the gross payments listed below.
Pension Plan Assets Investment policies and strategies are developed on a country specific basis. The United States plans, representing 67% of worldwide pension assets, and the United Kingdom plans representing 27% of worldwide pension assets, are invested primarily for growth, as the majority of the assets are in plans with active participants and ongoing accruals. In general, the plans have their primary allocation to diversified global equities, primarily through index funds in the form of common collective trusts. The United States plans' target allocation is 33% United States equities, 32% non-United States equities, 8% real estate (primarily equity of real estate investment trusts), 22% debt securities and 5% other, including hedge funds, private equity and cash equivalents. The United Kingdom plans' target asset allocations are 65% equities and the remainder in debt securities, cash equivalents and real estate investments. The equity risk for the plans is managed through broad geographic diversification and diversification across industries 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 to achieve more economically desired market exposures and to use futures, swaps and options to gain or hedge exposures. Other Postretirement Benefits Plan Assets The Voluntary Employee Benefit Association trust which holds U.S. other postretirement benefits plan assets has investment guidelines that include allocations to global equities and fixed income investments. The trust's 2015 target investment allocation is 50% diversified global equities and 50% fixed income securities. The fixed income securities are primarily comprised of intermediate term, high quality, dollar denominated, fixed income instruments. The equity allocation is invested in a diversified global equity index fund in the form of a collective trust. 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 as follows:
Pension Plans A summary of the fair value of pension plan assets at December 31, 2015 and 2014, follows:
The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2014 and 2015 due to the following:
Other Postretirement Benefits Plans A summary of the fair value of other postretirement benefits plan assets at December 31, 2015 and 2014, follows:
Valuation Methodologies Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 and 2014. Common collective 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. 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. Bank loans - These securities consist of senior secured term loans of publicly traded and privately held United States and non-United States floating rate obligations (principally corporations of non-investment grade rating). The fair value is determined through third-party pricing models that primarily utilize dealer quoted current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. Real estate and equity securities - These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1. Cash equivalents - Primarily certificates of deposit, commercial paper, money market funds and repurchase agreements. Hedge funds - Consists of direct investments in hedge funds through limited partnership interests. Values are based on the estimated fair value of the ownership interest in the investment as determined by the General Partner. The majority of the holdings of the hedge funds are in equity securities traded on public exchanges. The investment terms of the hedge funds allow capital to be redeemed quarterly given prior notice with certain limitations. Exchange traded funds - Valued at the closing price of the exchange traded fund's shares. Other - Primarily insurance contracts for international plans and also futures contracts and over-the-counter options. These investments are valued based on the closing prices of future contracts or indices as available on Bloomberg or similar service, and private equity investments. For additional information regarding fair value measurements, see Note 12. 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 were as follows:
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Commitments and Contingencies |
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Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Contingencies Eaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, patent infringement, personal injuries, antitrust matters, and employment-related matters. Eaton is also subject to asbestos claims from historic products which may have contained asbestos. Historically, significant insurance coverage has been available to cover costs associated with these claims. 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. In December 2010, a Brazilian court held that a judgment obtained by a Brazilian company, Raysul, against another Brazilian company, Saturnia, which was sold by Eaton in 2006, could be enforced against Eaton Ltda. This judgment is based on an alleged violation of an agency agreement between Raysul and Saturnia. At December 31, 2015, the Company has a total accrual of 96 Brazilian Reais related to this matter ($24 based on current exchange rates), comprised of 60 Brazilian Reais recognized in the fourth quarter of 2010 ($15 based on current exchange rates) with an additional 36 Brazilian Reais recognized through December 31, 2015 ($9 based on current exchange rates). In 2010, Eaton filed motions for clarification with the Brazilian court of appeals which were denied on April 6, 2011. Eaton Holding and Eaton Ltda. filed appeals on various issues to the Superior Court of Justice in Brasilia. In April 2013, the Superior Court of Justice ruled in favor of Raysul. Additional motions for clarification were filed with the Superior Court of Justice in Brasilia and were denied. On February 2, 2015, a final appeal was filed with the Superior Court of Justice in Brasilia. The Company expects that any sum it may be required to pay in connection with this matter will not exceed the amount of the recorded liability. On October 5, 2006, ZF Meritor LLC and Meritor Transmission Corporation (collectively, Meritor) filed an action against Eaton in the United States District Court for Delaware. The action sought damages, which would have been trebled under United States antitrust laws, as well as injunctive relief and costs. The suit alleged that Eaton engaged in anti-competitive conduct against Meritor in the sale of heavy-duty truck transmissions in North America. On June 23, 2014, Eaton announced it signed a settlement agreement with Meritor in the amount of $500 that resolved the lawsuit and removed the uncertainty of a trial and appeal process. On July 16, 2014, Eaton paid Meritor the $500. Frisby Corporation, now known as Triumph Actuation Systems, LLC, and other claimants (collectively, Triumph) asserted claims alleging, among other things, unfair competition, defamation, malicious prosecution, deprivation of civil rights, and antitrust in the Hinds County Circuit Court of Mississippi in 2004 and in the Federal District Court of North Carolina in 2011. Eaton had asserted claims against Triumph regarding improper use of trade secrets and these claims were dismissed by the Hinds County Circuit Court. On June 18, 2014, Eaton announced it signed a settlement agreement with Triumph in the amount of $147.5 that resolved all claims and lawsuits and removed the uncertainty of a trial and appeal process. On July 8, 2014, Eaton paid Triumph the $147.5. 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's manufacturing facilities are required to be certified to ISO 14001, an international standard for environmental management systems. The Company routinely reviews EHS performance at each of its facilities and continuously strives to improve pollution prevention. 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 2015, the Company was involved with a total of 137 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, 2015 and 2014, the Company had an accrual totaling $131 and $140, 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 A summary of the current and long-term warranty accruals follows:
Lease Commitments Eaton leases certain real properties and equipment. A summary of minimum rental commitments at December 31, 2015 under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, for each of the next five years and thereafter in the aggregate, follow:
A summary of rental expense follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Eaton Corporation plc is domiciled in Ireland. Income (loss) before income taxes and income tax (benefit) expense are summarized below based on the geographic location of the operation to which such earnings and income taxes are attributable. Certain Eaton operations which are located outside the United States are subject to income tax in both the United States as well as the country in which the operations are located. As a result, income before tax by location and the components of income tax expense by taxing jurisdiction are not directly related. For purposes of this note, Puerto Rico is classified in Foreign - other since Puerto Rico is not part of the United States corporate tax system.
Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate follow:
During 2015, income tax expense of $164 was recognized (an effective tax expense rate of 7.7%) compared to income tax benefit of $42 for 2014 (an effective tax benefit rate of 2.4%) and income tax expense of $11 for 2013 (an effective tax expense rate of 0.6%). Excluding the net tax benefit of 7.6% for the Meritor and Triumph litigation settlements and related legal costs and the gain on the sale of the Aerospace businesses, all of which occurred in the second quarter of 2014, the income tax rate was 5.2% for 2014. The 2015 income tax rate increased from 2014 primarily due to greater levels of income earned in higher tax jurisdictions and net increases in worldwide tax liabilities. Excluding the previously mentioned litigation settlements and gain on the sale of businesses, the 2014 income tax rate increased from 2013 due to greater levels of income earned in higher tax jurisdictions and net increases in worldwide tax liabilities, partially offset by additional foreign tax credit recognition in the United States and recognition of deferred tax assets in foreign jurisdictions. See Note 8 and Note 2 for additional information about litigation settlements and sales of businesses, respectively. No provision has been made for income taxes on undistributed earnings of foreign subsidiaries of approximately $15.1 billion at December 31, 2015, since it is the Company's intention to indefinitely reinvest undistributed earnings of its foreign subsidiaries. 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. The Company expects to deploy capital to those markets which offer particularly attractive growth opportunities. Given expected population growth and economic growth rates, most of the particularly attractive markets are outside of the United States. The cash that is permanently reinvested is typically used to expand these operations either organically or through acquisitions. Beginning in December 2012, Eaton Corporation became owned by an Irish parent company which has provided enhanced cash flow flexibility without incurring significant incremental tax. In addition, the Company expects that minimal to no Irish tax would apply to dividends paid to the Irish parent due to the impact of the Irish foreign tax credit system. The Company's public dividends and share repurchases are funded primarily from Non-U.S. operations. Worldwide income tax payments follow:
Deferred Income Tax Assets and Liabilities Components of current and noncurrent deferred income taxes follow:
During the fourth quarter of 2015, the Company early adopted Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17). ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the Company's consolidated balance sheet starting in 2017. The Company elected to apply this standard prospectively for 2015 financial statements. As a result, prior periods were not retrospectively adjusted. In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). ASU 2013-11 requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions except where the deferred tax asset or other carryforward are not available for use. The adoption of this standard resulted in a reduction of the Company’s consolidated long term deferred tax assets by $262 in 2015 and $146 in 2014. At the end of 2015, United States federal income tax loss carryforwards and income tax credit carryforwards are available to reduce future United States federal income tax liabilities. These carryforwards and their respective expiration dates are summarized below:
United States state and local tax loss carryforwards and tax credit carryforwards with a future tax benefit are also available at the end of 2015. The deferred tax assets for these carryforwards and their respective expiration dates are summarized below:
At December 31, 2015, certain non-United States subsidiaries had tax loss carryforwards and income tax credit carryforwards that are available to offset future taxable income. These carryforwards and their respective expiration dates are summarized below:
Recoverability of Deferred Income Tax Assets Eaton is subject to the income tax laws in the jurisdictions in which it operates. In order to determine its income tax provision for financial statement purposes, Eaton must make significant estimates and judgments about its business operations in these jurisdictions. These estimates and judgments are also used in determining the deferred income tax assets and liabilities that have been recognized for differences between the financial statement and income tax basis of assets and liabilities, and income tax loss carryforwards and income tax credit carryforwards. Management evaluates the realizability of deferred income tax assets for each of the jurisdictions in which it operates. If the Company experiences cumulative pretax 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 would lead management to conclude otherwise. However, if the Company experiences cumulative pretax 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, tax law carryback capability in the particular country, prudent and feasible tax planning strategies, 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 follows:
Eaton's long-term policy has been to enter into tax planning strategies only if it is more likely than not that the benefit would be sustained upon audit. For example, 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 tax benefits were recognized, the net impact on the provision for income tax expense would be $475. As of December 31, 2015 and 2014, Eaton had accrued approximately $108 and $120, 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 Company has accrued penalties in jurisdictions primarily where they are automatically applied to any deficiency, regardless of the merit of the position. The resolution of the majority of Eaton's unrecognized income tax benefits is dependent upon uncontrollable factors such as the prospect of retroactive regulations; new case law; the willingness of the income tax authority to settle the issue, including the timing thereof; and other factors. Therefore, for the majority of 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. Eaton or its subsidiaries file income tax returns in Ireland and many countries around the world. The IRS has completed its examination of Eaton Corporation and Includible Subsidiaries United States income tax returns for 2007 through 2010 and has issued a Statutory Notice of Deficiency (Notice) as discussed below. The statute of limitations on these tax years remains open until the matter is resolved. In 2015, the IRS began its examination of tax years 2011 through 2013. During 2015, the Company extended the statute of limitations to September 2018 for tax years 2011 through 2013. Tax years 2014 and 2015 are still subject to examination by the IRS. With respect to the pre-acquisition years of BZ Holdings Inc. and Subsidiaries (the former U.S. holding company for Cooper Industries), the IRS examination of the United States income tax returns for 2010, 2011, and the period ended December 21, 2012 was completed and settled without significant effect on the consolidated financial statements. The statute of limitations closed for tax years 2010 and 2011 on September 15, 2015. The statute of limitations on the final return period ended December 21, 2012 remains open until September 15, 2016. On December 22, 2012, BZ Holdings Inc. and Subsidiaries joined the Eaton US Holdings Inc. and Includible Subsidiaries consolidated United States income tax return for 2012. Eaton is also under examination for the income tax filings in various states of the United States and in many other foreign jurisdictions. With only a few exceptions, Eaton Corporation and Includible Subsidiaries are no longer subject to income tax examinations from states and localities within the United States for years before 2011. Income tax returns of states and localities within the United States will be reopened to the extent of United States federal income tax adjustments, if any, going back to 2005 when those audit years are finalized. Some states and localities may not limit their assessment to the United States federal adjustments, and may require the opening of the entire tax year. In addition, with only a few exceptions, BZ Holdings Inc. and Includible Subsidiaries are no longer subject to United States state and local income tax examinations for years before 2011. With only a few exceptions, the other foreign subsidiaries of both Eaton and Cooper are no longer subject to examinations for years before 2007. At the end of the fourth quarter of 2011, the IRS issued a Notice for Eaton Corporation and Includible Subsidiaries 2005 and 2006 tax years (the 2011 Notice). The 2011 Notice proposed assessments of $75 in additional taxes plus $52 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 U.S., net of agreed credits and deductions. The Company has set its transfer prices for products sold between these affiliates at the same prices that the Company sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) the Company entered into with the IRS. For the years 2001 through 2004, the IRS had previously accepted the transfer pricing methodology related to these APAs after a comprehensive review conducted in two separate audit cycles. On December 16, 2011, immediately prior to the 2011 Notice being issued, the IRS sent a letter stating that it was retrospectively canceling the APAs, even though their respective APA terms had already expired. The Company is contesting the proposed assessments. The Company believes that it was in full compliance with the terms of the two APAs, and that the IRS's cancellation of these two APAs is without merit. On February 29, 2012, the Company filed a Petition with the U.S. Tax Court in which it asserted that the transfer pricing established in the APAs meets the arms-length standard set by the U.S. income tax laws, and accordingly, that the APAs should be enforced in accordance with their terms. The case involves both whether the APAs should be enforced and, if not, the appropriate transfer pricing methodology. The Company believes that another important U.S. Tax Court decision in 2015 further supports the Company's arms-length transfer pricing methodology. The case was tried before the U.S. Tax Court in August and September 2015. The case will be fully submitted to the Court after the parties complete post-trial briefing in April 2016. During the third quarter of 2014, the Company received a Notice from the IRS for the 2007 through 2010 tax years (the 2014 Notice) proposing assessments of $190 in additional taxes plus $72 in penalties, net of agreed credits and deductions. The proposed assessments pertain primarily to the same transfer pricing issues that are currently in litigation for the 2011 Notice, as noted above. During 2007 through 2010, the Company set its transfer prices for products sold between these affiliates consistent with the terms of a written APA between it and the IRS that covered the years at issue. To establish the relevant transfer prices, the APA relied on prices at which the Company sells the products to third parties. The Company has continued to apply the arms-length transfer pricing methodology for 2011 through the current reporting period. The 2014 Notice includes a separate proposed assessment involving the recognition of income for several of the Company’s controlled foreign corporations. The Company believes that these proposed assessments are without merit. On November 25, 2014, the Company filed a Petition with the U.S. Tax Court in which it challenged the IRS's adjustments. The Company expects the outcome of the 2014 Notice on the transfer pricing matter to be determined by the judicial decision related to the 2011 Notice. Also during the third quarter of 2014, the Company resolved an uncertain tax position with a European government. The resolution had minimal impact on the Company's Consolidated Statements of Income. During 2010, the Company received a tax assessment of $64, plus interest and penalties, in Brazil for the tax years 2005 through 2008 that relates to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. The Company is contesting the assessment, which is under review at the second of three administrative appeals levels. During 2013, the Brazilian tax authorities began an audit of tax years 2009 through 2012. During the third quarter of 2014, the Company received a tax assessment of $50, plus interest and penalties, for the 2009 through 2012 tax years (primarily relating to the same issues concerning the 2005 through 2008 tax years), which the Company is also contesting and is under review in the second of three administrative appeals levels. Multiple outside advisors have stated that Brazilian tax authorities are raising the issue for most clients with similar facts and that the matter is expected to require at least 10 years to resolve. The Company continues to believe that final resolution of the assessments will not have a material impact on its consolidated financial statements. For the first time, during 2015, the Organization for Economic Cooperation and Development (OECD), in conjunction with the G20, finalized broad-based international tax policy guidelines that involve transfer pricing and other international tax subjects. While some member jurisdictions automatically adopt the new OECD guidelines, most member countries can adopt the guidelines only by new law or regulations. The Company is currently adopting processes to comply with the reporting requirements specified by the guidelines and is evaluating the other parts of the guidelines. |
Eaton Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eaton Shareholders' Equity [Text Block] | EATON SHAREHOLDERS' EQUITY There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 458.8 million and 467.9 million of which were issued and outstanding at December 31, 2015 and 2014, 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, 2015 and 2014, and 10 million serial preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2015 and 2014. At December 31, 2015, there were 18,538 holders of record of Eaton ordinary shares. Additionally, 23,559 current and former employees were shareholders through participation in the Eaton Savings Plan, Eaton Personal Investment Plan, Eaton Puerto Rico Retirement Savings Plan. On September 28, 2011, Eaton Corporation's Board of Directors adopted a common share repurchase program (2011 Program) which authorized the purchase of up to 20 million common shares, not to exceed an aggregate purchase price of $1.25 billion. During 2012, no common shares were repurchased under the 2011 Program. On April 24, 2013, the Company's shareholders authorized the Board of Directors to adopt an ordinary share repurchase program (the 2013 Program) for up to 40 million ordinary shares at prices between 70% and 120% of the closing price of Eaton's ordinary shares on the day preceding the day of purchase. On October 22, 2013, Eaton's Board of Directors adopted the 2013 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 2015 and 2014, 11.3 million and 9.6 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $682 and $650, respectively. During 2013, no ordinary shares were repurchased under the 2013 Program. Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $16 and $19 of ordinary shares and marketable securities, as valued at December 31, 2015 and 2014, respectively, to fund a portion of these liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' equity at historical cost. On February 24, 2016, Eaton's Board of Directors declared a quarterly dividend of $0.57 per ordinary share, payable on March 18, 2016, to shareholders of record at the close of business on March 7, 2016. Comprehensive Income (Loss) Comprehensive income (loss) consists primarily of net income, currency translation and related hedging instruments, changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open derivative contracts designated as cash flow hedges. The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss):
The changes in Accumulated other comprehensive loss follow:
The reclassifications out of Accumulated other comprehensive loss follow:
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about defined benefit pension and other postretirement benefits items. Net Income Per Share Attributable to Eaton Ordinary Shareholders A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:
In 2015, 2014, and 2013, 1.6 million, 0.5 million, and 0.2 million stock options, respectively, were excluded from the calculation of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive. |
Equity-Based Compensation |
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-Based Compensation | EQUITY-BASED COMPENSATION Restricted Stock Units and Awards Restricted stock units (RSUs) and restricted stock awards (RSAs) have been issued to certain employees and directors. Participants awarded RSUs do not receive dividends; therefore, the fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three or four years. The fair value of RSAs is determined based on the closing market price of the Company’s ordinary shares at the date of grant. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over three or four years. A summary of the RSU and RSA activity for 2015 follows:
Information related to RSUs and RSAs follows:
As of December 31, 2015, total compensation expense not yet recognized related to non-vested RSUs and RSAs was $82, and the weighted-average period in which the expense is expected to be recognized is 2.7 years. Excess tax benefit for RSUs and RSAs totaled $5, and $10 for 2014 and 2013, respectively. There was no excess tax benefit for RSU's and RSA's in 2015. Performance Share Units In February 2015, the Compensation and Organization Committee of the Board of Directors approved the grant of performance share units (PSUs) to certain employees that vest based on the satisfaction of a three-year service period and the achievement of certain performance metrics over that same period. Upon vesting, PSU holders receive dividends that accumulate during the vesting period. The fair value of these PSUs is determined based on the closing market price of the Company's ordinary shares at the date of grant. Equity-based compensation expense is recognized over the period an employee is required to provide service based on the number of PSUs for which achievement of the performance objectives is probable. A summary of PSU activity for 2015 follows:
Information related to PSUs follows:
As of December 31, 2015, total compensation expense not yet recognized related to non-vested PSUs was $5 and the weighted average period in which the expense is to be recognized is 2 years. 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 follows:
A summary of stock option activity follows:
The aggregate intrinsic value in the table above represents the total excess of the $52.04 closing price of Eaton ordinary shares on the last trading day of 2015 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 follows:
As of December 31, 2015, total compensation expense not yet recognized related to non-vested stock options was $11, and the weighted-average period in which the expense is expected to be recognized is 1.7 years. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. A summary of financial instruments recognized at fair value, and the fair value measurements used, follows:
Eaton values its financial instruments using an industry standard market approach, in which prices and other relevant information is generated by market transactions involving identical or comparable assets or liabilities. No financial instruments were measured using unobservable inputs. Other Fair Value Measurements Long-term debt and the current portion of long-term debt had a carrying value of $8,023 and fair value of $8,231 at December 31, 2015 compared to $9,032 and $9,509, respectively, at December 31, 2014. 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. For those investments classified as “available-for-sale”, Eaton marks these investments to fair value with the offset recognized in Accumulated other comprehensive loss. A summary of the carrying value of short-term investments follows:
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Derivative Financial Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and, to a lesser extent, commodity contracts, to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes. Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated, and is effective, as part of a hedging relationship and, if so, as to the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as:
The gain or loss from a derivative financial instrument designated as a hedge that is effective is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The change in fair value of a derivative financial instrument that is not effective as a hedge is immediately recognized in income. 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. Gains and losses associated with commodity hedge contracts are classified in Cost of products sold. Eaton uses certain of its debt denominated in foreign currency to hedge portions of its net investments in foreign operations against foreign currency exposure (net investment hedges). Foreign currency denominated debt designated on an after-tax basis as non-derivative net investment hedging instruments was $83 and $84 at December 31, 2015 and 2014, respectively. See Note 6 for additional information about debt. Interest Rate Risk Eaton has entered into fixed-to-floating interest rate swaps to manage interest rate risk of certain long-term debt. These interest rate swaps are accounted for as fair value hedges of certain long-term debt. The maturity of the swap corresponds with the maturity of the debt instrument as noted in the table of long-term debt in Note 6. Eaton has also entered into a forward starting floating-to-fixed interest rate swap to manage interest rate risk on an anticipated debt refinancing in 2017. A summary of interest rate swaps outstanding at December 31, 2015, follows: Fixed-to-Floating Interest Rate Swaps
Forward Starting Floating-to-Fixed Interest Rate Swaps
Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows:
The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts entered into to manage currency volatility or exposure on intercompany sales 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 impact of derivative instruments to the Consolidated Statements of Income and Comprehensive Income follow:
Amounts recognized in net income follow:
Gains and losses described above were recognized in Interest expense - net. |
Accounts Receivable and Inventory |
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Accounts Receivable and Inventory [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Inventory | ACCOUNTS RECEIVABLE AND INVENTORY Accounts Receivable Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its accounts receivable based on the length of time the receivable is past due and any anticipated future write-off based on historic experience. Accounts receivable balances are written off against an allowance for doubtful accounts after a final determination of uncollectability has been made. Accounts receivable are net of an allowance for doubtful accounts of $50 and $60 at December 31, 2015 and 2014, respectively. Inventory Inventory is carried at lower of cost or market. Inventory in the United States is generally accounted for using the last-in, first-out (LIFO) method. Remaining United States and non-United States inventory is accounted for 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 follow:
Inventory at FIFO accounted for using the LIFO method was 43% and 41% at the end of 2015 and 2014, respectively. |
Business Segment and Geographic Region Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment and Geographic Region Information | BUSINESS SEGMENT AND GEOGRAPHIC REGION INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Eaton’s segments are as follows: Electrical Products and Electrical Systems and Services The Electrical Products segment consists of electrical components, industrial components, residential products, single phase power quality, emergency lighting, fire detection, wiring devices, structural support systems, circuit protection, and lighting products. The Electrical Systems and Services segment consists of power distribution and assemblies, three phase power quality, hazardous duty electrical equipment, intrinsically safe explosion-proof instrumentation, utility power distribution, power reliability equipment, and services. 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 several common global customers, but a large number of customers are located regionally. Sales are made directly to original equipment manufacturers, utilities, and certain other end users, as well as through distributors, resellers, and manufacturers' representatives. Hydraulics The Hydraulics segment is a global leader in hydraulics components, systems and services for industrial and mobile equipment. Eaton offers 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; filtration systems solutions; industrial drum and disc brakes; and golf grips. The principal markets for the Hydraulics segment include oil and gas, renewable energy, marine, agriculture, 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 are located globally. Products are 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. 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; and fuel systems including fuel pumps, sensors, valves, adapters and regulators. In addition, products included power and load management systems and displays and panels until these businesses were sold in May of 2014. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers. 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 and 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, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, fuel vapor components, fluid connectors and conveyance products for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars and agricultural equipment. Other Information No single customer represented greater than 10% of net sales in 2015, 2014 or 2013, respectively. The accounting policies of the business segments are generally the same as the policies described in Note 1, except that inventory and related cost of products sold of the segments are accounted for using the FIFO method and operating profit only reflects the service cost component related to pensions and other postretirement benefits. Intersegment sales and transfers are accounted for at the same prices as if the sales and transfers were made to third parties. These intersegment sales are eliminated in consolidation. Operating profit includes the operating profit from intersegment sales. For purposes of business segment performance measurement, the Company does not allocate items that are of a non-operating nature or are of a corporate or functional governance nature. Corporate expenses consist of transaction costs associated with the acquisition of certain businesses and corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs. Identifiable assets of the business segments exclude goodwill, other intangible assets, and general corporate assets, which principally consist of cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets. Business Segment Information
Business segment operating profit was reduced by acquisition integration charges as follows:
Corporate acquisition integration charges totaled $5, $25 and $37 in 2015, 2014 and 2013, respectively. Corporate acquisition integration charges related primarily to the acquisition of Cooper and are included above in Other corporate expense - net. Acquisition-related transaction costs, such as investment banking, legal and other professional fees, and costs associated with change in control agreements, are included above in Interest expense - net and Other corporate expense - net. These charges totaled $9 in 2013. There were no Corporate acquisition-related transition costs in 2014 and 2015. See Note 3 for additional information about acquisition integration charges and transaction costs.
Geographic Region Information Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net.
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Condensed Consolidating Financial Statements |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS On November 14, 2013, Eaton Corporation registered senior notes under the Securities Act of 1933 (the Senior Notes). Eaton and certain other of Eaton's 100% owned direct and indirect subsidiaries (the Guarantors) fully and unconditionally guaranteed (subject, in the case of the Guarantors, other than Eaton, to customary release provisions as described below), on a joint and several basis, the Senior Notes. The following condensed consolidating financial statements are included so that separate financial statements of Eaton, Eaton Corporation and each of the Guarantors are not required to be filed with the Securities and Exchange Commission. The consolidating adjustments primarily relate to eliminations of investments in subsidiaries and intercompany balances and transactions. The condensed consolidating financial statements present investments in subsidiaries using the equity method of accounting. See Note 6 for additional information related to the Senior Notes. The guarantee of a Guarantor that is not a parent of the issuer will be automatically and unconditionally released and discharged in the event of any sale of the Guarantor or of all or substantially all of its assets, or in connection with the release or termination of the Guarantor as a guarantor under all other U.S. debt securities or U.S. syndicated credit facilities, subject to limitations set forth in the indenture. The guarantee of a Guarantor that is a direct or indirect parent of the issuer will only be automatically and unconditionally released and discharged in connection with the release or termination of such Guarantor as a guarantor under all other debt securities or syndicated credit facilities (in both cases, U.S. or otherwise), subject to limitations set forth in the indenture. During 2015, the Company undertook certain steps to restructure ownership of various subsidiaries. The transactions were entirely among wholly-owned subsidiaries under the common control of Eaton. This restructuring has been reflected as of the beginning of the earliest period presented below.
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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
General Information | General Information and Basis of Presentation Eaton Corporation plc (Eaton or the Company) is a power management company with 2015 net sales of $20.9 billion. The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 97,000 employees in over 60 countries and sells products to customers in more than 175 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. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates 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. During the fourth quarter of 2015, the Company early adopted Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes (ASU 2015-17). ASU 2015-17 requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the Company's consolidated balance sheet starting in 2017. The Company elected to apply this standard prospectively for 2015 financial statements. As a result, prior periods were not retrospectively adjusted. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Business Description and Basis of Presentation | Eaton Corporation plc (Eaton or the Company) is a power management company with 2015 net sales of $20.9 billion. The Company provides energy-efficient solutions that help its customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton has approximately 97,000 employees in over 60 countries and sells products to customers in more than 175 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. |
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. These associate companies are not material either individually, or in the aggregate, to Eaton's consolidated financial statements. Eaton does not have off-balance sheet arrangements or financings with unconsolidated entities. In the ordinary course of business, the Company leases certain real properties and equipment, as described in Note 8. |
Foreign Currency Translation | Eaton's functional currency is United States Dollars (USD). The functional currency for most subsidiaries is their local currency. Financial statements for these subsidiaries are translated at year-end exchange rates 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. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year presentation. |
Revenue Recognition | Revenue Recognition Sales of products are recognized when a sales agreement is in place, products have been shipped to unaffiliated customers and title has transferred in accordance with shipping terms, the selling price is fixed and determinable and collectability is reasonably assured, all significant related acts of performance have been completed, and no other significant uncertainties exist. Shipping and handling costs billed to customers are included in Net sales and the related costs in Cost of products sold. Although the majority of the sales agreements contain standard terms and conditions, there are agreements that contain multiple elements or non-standard terms and conditions. As a result, judgment is required to determine the appropriate accounting, including whether the deliverables specified in these agreements should be treated as separate units of accounting for recognition purposes, and, if so, how the sales price should be allocated among the elements and when to recognize sales for each element. For delivered elements, sales generally are recognized only when the delivered elements have standalone value and there are no uncertainties regarding customer acceptance. Sales for service contracts generally are recognized as the services are provided. Eaton records reductions to revenue for 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. |
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. Goodwill is tested for impairment at the reporting unit level, which is equivalent to Eaton's operating segments and based on the net assets for each segment, including goodwill and intangible assets. Goodwill is assigned to each operating segment, 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 discounted cash flow model considers forecasted cash flows discounted at an estimated weighted-average cost of capital. The forecasted cash flows are based on the Company's long-term operating plan and a terminal value is used to estimate the operating segment'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 significant judgments, including judgments about appropriate discount rates, perpetual growth rates and the timing of expected future cash flows of the respective reporting unit. Sensitivity analyses are performed in order to assess the reasonableness of the assumptions and the resulting estimated fair values. 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 an operating segment is less than its carrying amount. Goodwill impairment testing for 2015 and 2014 was performed using a qualitative analysis, which 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 assessment, performed in 2013. The results of these qualitative analyses did not indicate a need to perform a quantitative analysis. Based on qualitative analyses performed in 2015 and 2014 and a quantitative analysis performed in 2013, the fair values of Eaton's reporting units continue to substantially exceed the respective carrying amounts. Indefinite life intangible assets consist of 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 2015 and 2014 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 2015 and 2014, the fair value of indefinite lived intangible assets substantially exceeded the respective carrying value. For additional information about goodwill and other intangible assets, see Note 5. |
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. Cost of buildings are depreciated generally over 40 years and machinery and equipment over 3 to 10 years. At December 31, 2015, the weighted-average amortization period for intangible assets subject to amortization was 17 years for patents and technology, primarily as a result of the long life of aircraft platforms; 17 years for customer relationships; and 16 years for trademarks. Software is generally amortized up to a life of 10 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, but is approximately 11 years on a weighted average basis. If most or all of the plan’s participants are no longer actively accruing benefits, the average life expectancy is used. |
Warranty Accruals | 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. See Note 8 for additional information about warranty accruals. |
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 the 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. Penalties on unrecognized income tax benefits have been accrued for jurisdictions where penalties are automatically applied to any deficiency, regardless of the merit of the position. For additional information about income taxes, see Note 9. |
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 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. Participants awarded restricted stock units (RSUs) do not receive dividends; therefore, their fair value is determined by reducing the closing market price of the Company’s ordinary shares on the date of grant by the present value of the estimated dividends had they been paid. The RSUs entitle the holder to receive one ordinary share for each RSU upon vesting, generally over three or four years. The fair value of restricted stock awards (RSAs) and performance share units (PSUs) are determined based on the closing market price of the Company’s ordinary shares at the date of grant. RSAs are issued and outstanding at the time of grant, but remain subject to forfeiture until vested, generally over three or four years. PSUs are entitled to receive one ordinary share for each PSU that vests based on satisfaction of a three-year service period and the achievement of certain performance metrics. Stock options are granted with an exercise price equal to the closing market price of Eaton ordinary shares on the date of grant. The fair value of stock options is determined using a Black-Scholes option-pricing model, which incorporates assumptions regarding the expected volatility, the expected option life, the risk-free interest rate, and the expected dividend yield. See Note 11 for additional information about equity-based compensation. |
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 13 for additional information about hedges and derivative financial instruments. |
Recently Issued Accounting Pronouncement | Recently Issued Accounting Pronouncement In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09). This accounting standard supersedes all existing US GAAP revenue recognition guidance. Under ASU 2014-09, a company will recognize revenue when it transfers the control of promised goods or services to customers in an amount that reflects the consideration which the company expects to collect in exchange for those goods or services. ASU 2014-09 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14). This accounting standard defers the effective date of ASU 2014-09 for one year and permits early adoption as of the original effective date. Eaton is evaluating the impact of ASU 2014-09 and an estimate of the impact to the consolidated financial statements cannot be made at this time. |
Acquisition Integration and Restructuring Charges (Tables) |
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Acquisition Integration and Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition Integration Charges and Transaction Costs | A summary of these charges follows:
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Restructuring Charges Summary of Restructuring Charges (Tables) |
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Summary of restructuring charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges by Segment [Table Text Block] | A summary of restructuring charges by segment follows:
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Restructuring Liability Rollforward [Table Text Block] | A summary of liabilities related to workforce reductions, plant closings and other associated costs announced in 2015 follows:
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Goodwill and Other Intangible Assets Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rollforward of goodwill | Changes in the carrying amount of goodwill by segment follow:
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Summary of other intangible assets | A summary of other intangible assets follows:
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Expense related to intangible assets subject to amortization in 2014, and for each of the next five years | Amortization expense related to intangible assets subject to amortization in 2015, and estimated amortization expense for each of the next five years, follows:
|
Debt Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of long-term debt, including the current portion | A summary of long-term debt, including the current portion, follows:
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Mandatory maturities of long-term debt for each of the next five years | Maturities of long-term debt for each of the next five years follow:
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Interest paid on debt | Interest paid on debt follows:
|
Retirement Benefits Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obligations and funded status | Obligations and Funded Status
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Change in benefit obligations | Change in Benefit Obligations
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Change in plan assets | Change in Plan Assets
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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 follow:
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Changes in pension and other postretirement benefits liabilities recognized in Accumulated other comprehensive loss | Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss follow:
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Benefits expense | Benefits Expense
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Estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost | The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2016 follow:
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Assumptions used to determine other postretirement obligations and expense | Pension Plans
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Assumptions used to determine other postretirement benefits obligations and expense | Assumptions used to determine other postretirement benefits obligations and expense follow:
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1-percentage change in the assumed health care cost trend rates | A 1-percentage point change in the assumed health care cost trend rates would have the following effects:
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Employer contributions to pension plans | Contributions to pension plans that Eaton expects to make in 2016, and made in 2015, 2014 and 2013, follow:
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Expected pension and other postretirement benefit payments and expected subsidy | For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, would reduce the gross payments listed below.
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Fair value of pension plan assets | A summary of the fair value of pension plan assets at December 31, 2015 and 2014, follows:
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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 2014 and 2015 due to the following:
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Fair value of other postretirement benefits plan assets | A summary of the fair value of other postretirement benefits plan assets at December 31, 2015 and 2014, follows:
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Employer contributions to defined contribution benefit plans, charged to expense | The total contributions related to these plans are charged to expense and were as follows:
|
Commitments and Contingencies Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current and long-term warranty accruals | A summary of the current and long-term warranty accruals follows:
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Future minimum rental commitments for noncancelable operating leases | A summary of minimum rental commitments at December 31, 2015 under noncancelable operating leases, which expire at various dates and in most cases contain renewal options, for each of the next five years and thereafter in the aggregate, follow:
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Rental expense | A summary of rental expense follows:
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Income Taxes Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
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Income tax (benefit) expense |
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Reconciliations of income taxes from the appropriate statutory rate | Reconciliations of income taxes from the Ireland national statutory rate of 25% to the consolidated effective income tax rate follow:
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Worldwide income tax payments | Worldwide income tax payments follow:
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Components of current and long-term deferred income taxes | Components of current and noncurrent deferred income taxes follow:
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United States federal income tax loss carryforwards and income tax credit carryforwards and expiration dates | These carryforwards and their respective expiration dates are summarized below:
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United States state and local tax loss carryforwards and tax credit carryforwards and expiration dates | The deferred tax assets for these carryforwards and their respective expiration dates are summarized below:
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Non-United States subsidiaries tax loss carryforwards and income tax credit carryforwards and expiration dates | These carryforwards and their respective expiration dates are summarized below:
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Summary of gross unrecognized income tax benefits | A summary of gross unrecognized income tax benefits follows:
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Eaton Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) | The following table summarizes the pre-tax and after-tax amounts recognized in Comprehensive income (loss):
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The changes in Accumulated other comprehensive loss follow:
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Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | The reclassifications out of Accumulated other comprehensive loss follow:
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 7 for additional information about defined benefit pension and other postretirement benefits items. |
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:
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Equity-Based Compensation Equity-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of RSU and RSA activity | A summary of the RSU and RSA activity for 2015 follows:
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Information Related to RSUs and RSAs | Information related to RSUs and RSAs follows:
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Share-based Compensation, Performance Shares Award Outstanding Activity [Table Text Block] | A summary of PSU activity for 2015 follows:
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Information Related to PSUs | Information related to PSUs follows:
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Assumptions used in determining fair value of stock options | A summary of the assumptions used in determining the fair value of stock options follows:
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Summary of stock option activity | A summary of stock option activity follows:
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Information related to stock options | Information related to stock options follows:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of financial instruments recognized at fair value and fair value measurement used | A summary of financial instruments recognized at fair value, and the fair value measurements used, follows:
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Summary of carrying value of short-term investments | A summary of the carrying value of short-term investments follows:
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Derivative Financial Instruments and Hedging Activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of interest rate swaps | A summary of interest rate swaps outstanding at December 31, 2015, follows: Fixed-to-Floating Interest Rate Swaps
Forward Starting Floating-to-Fixed Interest Rate Swaps
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Fair value of derivative financial instruments recognized in the Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows:
|
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Impact of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income | The impact of derivative instruments to the Consolidated Statements of Income and Comprehensive Income follow:
|
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Amounts recognized in net income | Amounts recognized in net income follow:
|
Accounts Receivable and Inventory (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable and Inventory [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of inventory | The components of inventory follow:
|
Business Segment and Geographic Region Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information - Net sales, Segment operating profit and Corporate |
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Business Segment Information - Acquisition integration charges | Business segment operating profit was reduced by acquisition integration charges as follows:
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Business Segment Information - Identifiable assets, Capital expenditures for property, plant, and equipment, and Depreciation of property, plant, and equipment |
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Geographic Region Information - Net sales and long-lived assets | Net sales are measured based on the geographic destination of sales. Long-lived assets consist of property, plant and equipment - net.
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Condensed Consolidating Financial Statements Condensed Consolidating Financial Statements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements |
|
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Accounting Policies [Abstract] | |||
Net sales | $ 20,855 | $ 22,552 | $ 22,046 |
Number of Eaton employees | 97,000 | ||
Countries of operation | over 60 | ||
Countries where products are sold | 175 | ||
Minimum [Member] | |||
Investments in associate companies [Line Items] | |||
Equity method of accounting, ownership interest | 20.00% | ||
Maximum [Member] | |||
Investments in associate companies [Line Items] | |||
Equity method of accounting, ownership interest | 50.00% |
Acquisitions and Sales of Businesses (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
May. 09, 2014 |
Feb. 01, 2013 |
Sep. 30, 2015 |
Dec. 31, 2014 |
|
Business Acquisition [Line Items] | ||||
Sale of Apex to Bain Capital by Cooper and Danaher | $ 1,600 | |||
Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses [Member] | Aerospace [Member] | ||||
Business Acquisition [Line Items] | ||||
Agreement to sell the Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to Safran USA Inc. | $ 270 | |||
Gain on sale of businesses, pre-tax | $ 154 | |||
Ephesus Lighting, Inc. [Member] | Electrical Products [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenue reported for last annual period of acquired entity | $ 23 | |||
Oxalis Group Ltd. [Member] | Electrical Systems and Services [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenue reported for last annual period of acquired entity | $ 9 |
Restructuring Charges Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 129 | $ 54 | ||
Severance Costs | 48 | |||
Other Restructuring Costs | 6 | |||
Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 112 | |||
Scenario, Forecast [Member] | Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | $ 130 | $ 140 | ||
Hydraulics [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 31 | 16 | ||
Aerospace [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 5 | 2 | ||
Vehicle [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 34 | 32 | ||
Corporate, Non-Segment [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 18 | $ 4 |
Restructuring Charges Restructuring Charges, Segments (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 129 | $ 54 |
Electrical Products [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 12 | |
Electrical Systems and Services [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 29 | |
Hydraulics [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 31 | 16 |
Aerospace [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 5 | 2 |
Vehicle [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | 34 | 32 |
Corporate, Non-Segment [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring Charges | $ 18 | $ 4 |
Restructuring Charges Restructuring Roll Forward (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | $ 0 | |
Restructuring Charges | 129 | $ 54 |
Payments for Restructuring | (62) | |
Restructuring Reserve, Translation and Other Adjustment | (13) | |
Restructuring Reserve | 54 | 0 |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | 0 | |
Restructuring Charges | 112 | |
Payments for Restructuring | (59) | |
Restructuring Reserve, Translation and Other Adjustment | 1 | |
Restructuring Reserve | 54 | 0 |
Other Restructuring [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve | 0 | |
Restructuring Charges | 17 | |
Payments for Restructuring | (3) | |
Restructuring Reserve, Translation and Other Adjustment | (14) | |
Restructuring Reserve | $ 0 | $ 0 |
Goodwill and Other Intangible Assets Schedule of Other Intangible Assets by Major Class (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Summary of other intangible assets | ||
Intangible assets not subject to amortization - trademarks | $ 1,661 | $ 1,844 |
Intangible assets subject to amortization | ||
Historical cost | 6,207 | 6,251 |
Accumulated amortization | 1,854 | 1,539 |
Customer relationships [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 3,544 | 3,674 |
Accumulated amortization | 1,010 | 834 |
Patents and technology [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 1,447 | 1,494 |
Accumulated amortization | 511 | 440 |
Trademarks [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 1,113 | 980 |
Accumulated amortization | 311 | 250 |
Other [Member] | ||
Intangible assets subject to amortization | ||
Historical cost | 103 | 103 |
Accumulated amortization | $ 22 | $ 15 |
Goodwill and Other Intangible Assets Intangible Assets Amortization Expense (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Intangible Assets Future Amortization Expense [Abstract] | |
2015 | $ 401 |
2016 | 394 |
2017 | 384 |
2018 | 364 |
2019 | 357 |
2020 | $ 352 |
Debt Schedule of Maturities of Long-term Debt (Details) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2016 | $ 242 |
2017 | 1,544 |
2018 | 576 |
2019 | 340 |
2020 | $ 241 |
Debt Interest Paid on Debt (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Debt Disclosure [Abstract] | |||
Interest paid on debt | $ 271 | $ 296 | $ 294 |
Retirement Benefits Plans - Components of Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets (Details 3) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
United States pension liabilities [Member] | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | $ 3,376 | $ 3,557 |
Accumulated benefit obligation | 3,219 | 3,403 |
Fair value of plan assets | 2,470 | 2,581 |
Non-United States pension liabilities [Member] | ||
Components of pension plans with an accumulated benefit obligation in excess of plan assets | ||
Projected benefit obligation | 1,387 | 1,524 |
Accumulated benefit obligation | 1,328 | 1,446 |
Fair value of plan assets | $ 650 | $ 673 |
Retirement Benefits Plans Retirement Benefits Plans - Estimated Future Pretax Amounts Recognized From AOCI to Net Periodic Benefit Cost (Details 6) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
United States pension liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | $ 165 |
Prior service cost (credit) | 1 |
Total | 166 |
Non-United States pension liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | 34 |
Prior service cost (credit) | 1 |
Total | 35 |
Other postretirement liabilities [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Actuarial loss | 5 |
Prior service cost (credit) | (14) |
Total | $ (9) |
Retirement Benefits Plans Retirement Benefits Plans - Discount Rates (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Benefits Plans - Discount Rates [Line Items] | ||
Discount Rates for Service and Interest Costs | 4.00% | |
Scenario, Forecast [Member] | ||
Retirement Benefits Plans - Discount Rates [Line Items] | ||
Discount Rate Service Costs | 4.30% | |
Discount Rate Interest Costs | 3.30% | |
Service Cost Reduction | $ 3 | |
Interest Cost Reduction | $ 42 |
Retirement Benefits Plans - Pension Plans Assumptions (Details 7) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
United States pension plans [Member] | |||
Assumptions used to determine benefit obligation at year-end | |||
Discount rate | 4.22% | 3.97% | 4.67% |
Rate of compensation increase | 3.18% | 3.16% | 3.16% |
Assumptions used to determine expense | |||
Discount rate | 3.97% | 4.67% | 3.97% |
Expected long-term return on plan assets | 8.50% | 8.40% | 8.45% |
Rate of compensation increase | 3.16% | 3.16% | 3.16% |
Non-United States pension plans [Member] | |||
Assumptions used to determine benefit obligation at year-end | |||
Discount rate | 3.46% | 3.33% | 4.20% |
Rate of compensation increase | 3.12% | 3.13% | 3.12% |
Assumptions used to determine expense | |||
Discount rate | 3.33% | 4.20% | 4.17% |
Expected long-term return on plan assets | 6.92% | 7.00% | 6.92% |
Rate of compensation increase | 3.13% | 3.12% | 3.09% |
Retirement Benefits Plans Retirement Benefits Plans - Employer Contributions to Retirement Benefits Plans (Details 9) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
United States pension plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | $ 59 | ||
Employer contributions to pension plans | 221 | $ 248 | $ 196 |
Non-United States pension plans [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | 103 | ||
Employer contributions to pension plans | 109 | 114 | 145 |
Total contributions [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year | 162 | ||
Employer contributions to pension plans | $ 330 | $ 362 | $ 341 |
Retirement Benefits Plans - Estimated Pension and Other Postretirement Benefit Payments (Details 10) $ in Millions |
Dec. 31, 2015
USD ($)
|
---|---|
United States pension plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2016 | $ 334 |
2017 | 270 |
2018 | 280 |
2019 | 287 |
2020 | 292 |
2021 - 2025 | 1,515 |
Non-United States pension plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2016 | 81 |
2017 | 82 |
2018 | 85 |
2019 | 86 |
2020 | 89 |
2021 - 2025 | 491 |
Other postretirement benefits plans [Member] | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
2016 | 65 |
Medicare prescription drug subsidy 2016 | (5) |
2017 | 61 |
Medicare prescription drug subsidy 2017 | (4) |
2018 | 57 |
Medicare prescription drug subsidy 2018 | (4) |
2019 | 52 |
Medicare prescription drug subsidy 2019 | (3) |
2020 | 48 |
Medicare prescription drug subsidy 2020 | (2) |
2021 - 2025 | 199 |
Medicare prescription drug subsidy 2021 - 2025 | $ (10) |
Retirement Benefits Plans Retirement Benefits Plans - Defined Contribution Plans (Details 13) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
Employer contributions to defined contribution plans | $ 137 | $ 141 | $ 121 |
Income Taxes Income (Loss) Before Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | $ 2,145 | $ 1,761 | $ 1,884 |
Ireland | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | (608) | (332) | 184 |
Foreign | |||
Income (Loss) Before Income Taxes [Line Items] | |||
Total income before income taxes | $ 2,753 | $ 2,093 | $ 1,700 |
Income Taxes Worldwide Income Tax Payments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Worldwide Income Tax Payments [Abstract] | |||
Income taxes paid | $ 302 | $ 258 | $ 272 |
Income Taxes Summary of Gross Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Summary of Gross Unrecognized Income Tax Benefits [Abstract] | |||
Balance at January 1 | $ 493 | $ 479 | $ 444 |
Increases and decreases as a result of positions taken during prior years | |||
Transfers from valuation allowances | 0 | (3) | 13 |
Other increases, including currency translation | 34 | 37 | 7 |
Other decreases, including currency translation | (34) | (3) | (7) |
Balances related to acquired businesses | (1) | (3) | 2 |
Increases as a result of positions taken during the current year | 109 | 65 | 35 |
Decreases relating to settlements with tax authorities | 0 | (51) | (6) |
Decreases as a result of a lapse of the applicable statute of limitations | (17) | (28) | (9) |
Balance at December 31 | $ 584 | $ 493 | $ 479 |
Eaton Shareholders' Equity Eaton Shareholders' Equity - Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Equity [Abstract] | |||
Net income attributable to Eaton ordinary shareholders | $ 1,979 | $ 1,793 | $ 1,861 |
Weighted-average number of ordinary shares outstanding - diluted | 467.1 | 476.8 | 476.7 |
Less dilutive effect of equity-based compensation | 1.6 | 2.7 | 3.2 |
Weighted-average number of ordinary shares outstanding - basic | 465.5 | 474.1 | 473.5 |
Net income per ordinary share - diluted | $ 4.23 | $ 3.76 | $ 3.90 |
Net income per ordinary share - basic | $ 4.25 | $ 3.78 | $ 3.93 |
Eaton Shareholders' Equity Eaton Shareholders' Equity (Textuals) (Details) $ / shares in Units, $ in Millions |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Feb. 24, 2016
$ / shares
|
Sep. 28, 2011
USD ($)
shares
|
Dec. 31, 2015
USD ($)
$ / shares
shares
|
Dec. 31, 2014
USD ($)
$ / shares
shares
|
Dec. 31, 2013
$ / shares
shares
|
Dec. 31, 2012
shares
|
Mar. 18, 2016
$ / shares
|
Dec. 31, 2015
€ / shares
|
Oct. 22, 2013
shares
|
|
Subsequent Event [Line Items] | |||||||||
Quarterly dividends, per share, declared | $ / shares | $ 2.20 | $ 1.96 | $ 1.68 | ||||||
Shareholders Equity Textuals Abstract | |||||||||
Ordinary shares authorized | 750,000,000 | ||||||||
Eaton Corporation plc ordinary share par value | $ / shares | $ 0.01 | ||||||||
Ordinary shares issued and outstanding | 458,800,000 | 467,900,000 | |||||||
Deferred ordinary shares authorized | 40,000 | ||||||||
Deferred ordinary shares par value | € / shares | € 1.00 | ||||||||
Deferred ordinary shares, shares issued and outstanding | 40,000 | 40,000 | |||||||
Preferred A Shares authorized | 10,000 | ||||||||
Preferred A Shares par value | $ / shares | $ 1.00 | ||||||||
Preferred A Shares, Shares Issued | 10,000 | 10,000 | |||||||
Preferred A Shares, Shares Outstanding | 10,000 | 10,000 | |||||||
Serial preferred shares authorized | 10,000,000 | ||||||||
Serial preferred share par value per share | $ / shares | $ 0.01 | ||||||||
Serial preferred shares, shares issued and outstanding | 0 | 0 | |||||||
Number of holders of record of Eaton ordinary shares | 18,538 | ||||||||
Number of current and former employees who were shareholders through various Eaton plans | 23,559 | ||||||||
Disclosure of Repurchase Agreements [Abstract] | |||||||||
2011 Retired Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 20,000,000 | ||||||||
2011 share repurchase program, maximum aggregate purchase price of shares authorized | $ | $ 1,250 | ||||||||
2011 share repurchase progam, shares purchased | 0 | ||||||||
2013 share repurchase program, number of shares authorized to be repurchased | 40,000,000 | ||||||||
2013 stock repurchase program, authorized repurchase price as percent of Eaton closing share price, low range | 70.00% | ||||||||
2013 stock repurchase program, authorized repurchase price as percent of Eaton closing share price, high range | 120.00% | ||||||||
2013 share repurchase program, shares purchased - shares | 11,300,000 | 9,600,000 | 0 | ||||||
2013 share repurchase program, shares purchased - cost | $ | $ 682 | $ 650 | |||||||
Employee Trust [Abstract] | |||||||||
Deferred compensation plan trust of shares and marketable secutities | $ | $ 16 | $ 19 | |||||||
Earnings Per Share, Diluted, Other Disclosures [Abstract] | |||||||||
Antidilutive securities excluded from computation of net income per ordinary share | 1,600,000 | 500,000 | 200,000 | ||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Quarterly dividends payable, amount per share | $ / shares | $ 0.57 | ||||||||
Quarterly dividends, per share, declared | $ / shares | $ 0.57 |
Restricted Stock Units and Awards Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense not yet recognized related to non-vested RSUs and RSAs | $ 82 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months | ||
Excess tax benefit for equity-based compensation | $ 5 | $ 10 | |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Non-vested at January 1 | 2.8 | ||
Granted | 1.1 | ||
Vested | (1.6) | ||
Forfeited | (0.2) | ||
Non-vested at December 31 | 2.1 | 2.8 | |
Non-vested at January 1 | $ 60.11 | ||
Granted | 67.46 | ||
Vested | 57.50 | ||
Forfeited | 66.94 | ||
Non-vested at December 31 | $ 65.06 | $ 60.11 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 8 months 12 days |
Equity-Based Compensation Information Related to Restricted Stock Units and Awards (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Information Related to Restricted Stock Units [Abstract] | |||
Pretax expense for RSUs and RSAs | $ 68 | $ 81 | $ 69 |
After-tax expense for RSUs and RSAs | 44 | 53 | 45 |
Fair value of vested RSUs and RSAs | $ 110 | $ 105 | $ 82 |
Equity-Based Compensation Performance Share Units (Details) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Pretax expense for PSUs | $ | $ 2 |
After-tax expense for PSUs | $ | 1 |
Employee Service Share-Based Compensation, Non Vested Awards, Total Compensation Cost Not Yet Recognized, Other Than Options, PSUs | $ | $ 5 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months |
Performance Share Unit [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested at January 1 | shares | 0.0 |
Granted | shares | 0.9 |
Vested | shares | 0.0 |
Forfeited | shares | (0.1) |
Non-vested at December 31 | shares | 0.8 |
Non-vested at January 1 | $ / shares | $ 0.00 |
Granted | $ / shares | 71.72 |
Vested | $ / shares | 0.00 |
Forfeited | $ / shares | 71.72 |
Non-vested at December 31 | $ / shares | $ 71.72 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years |
Equity-Based Compensation Stock Options Fair Value Assumptions (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||
Expected volatility | 29.00% | 34.00% | 36.00% |
Expected option life in years | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Expected dividend yield | 2.60% | 2.40% | 2.00% |
Risk-free interest rate minimum | 1.50% | 1.50% | 0.80% |
Risk-free interest rate maximum | 1.60% | 1.70% | 1.50% |
Weighted-average fair value of stock options granted | $ 15.25 | $ 19.46 | $ 17.49 |
Stock option vesting period | 3 years | ||
Stock option expiration date after date of grant | 10 years |
Equity-Based Compensation Stock Options Activity (Details) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Closing price of Eaton ordinary shares on last trading day | $ / shares | $ 52.04 |
Weighted-average exercise price per option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at January 1, 2015 | $ / shares | 47.30 |
Granted | $ / shares | 71.66 |
Exercised | $ / shares | 37.91 |
Forfeited and cancelled | $ / shares | 71.18 |
Outstanding at December 31, 2015 | $ / shares | 51.94 |
Exercisable at December 31, 2015 | $ / shares | $ 47.23 |
Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at January 1, 2015, shares | shares | 7.0 |
Granted, shares | shares | 0.8 |
Exercised, shares | shares | (1.4) |
Forfeited and cancelled, shares | shares | (0.2) |
Outstanding at December 31, 2015, shares | shares | 6.2 |
Exercisable at December 31, 2015, shares | shares | 5.0 |
Reserved for future grants at December 31, 2015, shares | shares | 25.5 |
Weighted-average remaining contractual life in years [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at December 31, 2015 | 4 years 3 months |
Exercisable at December 31, 2015 | 3 years 3 months |
Aggregate Intrinsic Value [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at December 31, 2015 | $ | $ 36.2 |
Exercisable at December 31, 2015 | $ | $ 36.2 |
Equity-Based Compensation Information Related to Stock Options (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Information Related to Stock Options [Abstract] | |||
Pretax expense for stock options | $ 12 | $ 12 | $ 11 |
After-tax expense for stock options | 8 | 8 | 7 |
Proceeds from stock options exercised | 52 | 54 | 121 |
Income tax benefit related to stock options exercised | |||
Tax benefit classified in operating activities in the Consolidated Statements of Cash Flows | 4 | 4 | 3 |
Excess tax benefit classified in financing activities in the Consolidated Statements of Cash Flows | 1 | 15 | 22 |
Intrinsic value of stock options exercised | 44 | 55 | 102 |
Total fair value of stock options vesting | $ 12 | $ 12 | $ 11 |
Stock options exercised, shares | 1.4 | 1.5 | 3.6 |
Non-vested stock option compensation expense not yet recognized | $ 11 | ||
Non-vested stock options weighted-average period for total compensation expense to be recognized | 1 year 8 months |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | $ 268 | $ 781 |
Short-term investments | 177 | 245 |
Net derivative contracts | 86 | 70 |
Long-term debt converted to floating interest rates by interest rate swaps - net | (94) | (74) |
Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 268 | 781 |
Short-term investments | 177 | 245 |
Net derivative contracts | 0 | 0 |
Long-term debt converted to floating interest rates by interest rate swaps - net | 0 | 0 |
Other observable inputs (Level 2) [Member] | ||
Summary of financial instruments recognized at fair value and fair value measurement used | ||
Cash | 0 | 0 |
Short-term investments | 0 | 0 |
Net derivative contracts | 86 | 70 |
Long-term debt converted to floating interest rates by interest rate swaps - net | (94) | (74) |
Unobservable inputs (Level 3) [Member] | ||
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 |
Long-term debt converted to floating interest rates by interest rate swaps - net | $ 0 | $ 0 |
Fair Value Measurements Fair Value Measurements (Details 1) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Time deposits, certificates of deposit and demand deposits with banks | $ 122 | $ 113 |
Money market investments | 55 | 131 |
Other | 0 | 1 |
Total short-term investments | $ 177 | $ 245 |
Fair Value Measurements Fair Value Measurements (Details Textuals) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Long-term debt and current portion of long term debt, carrying value | $ 8,023 | $ 9,032 |
Long-term debt and current portion of long-term debt, fair value | $ 8,231 | $ 9,509 |
Derivative Financial Instruments and Hedging Activities Fixed-to-Floating Interest Rate Swaps (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Derivative [Line Items] | |
Notional amount | $ 50 |
Fixed interest rate received | 2.52% |
Floating interest rate paid | 0.00% |
Notes due 2017 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 150 |
Fixed interest rate received | 5.30% |
Floating interest rate paid | 4.59% |
Senior notes due 2017 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 750 |
Fixed interest rate received | 1.50% |
Floating interest rate paid | 0.71% |
Notes due 2018 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 415 |
Fixed interest rate received | 5.60% |
Floating interest rate paid | 3.78% |
Notes due 2019 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 300 |
Fixed interest rate received | 6.95% |
Floating interest rate paid | 5.66% |
Debentures due 2019 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received | 8.875% |
Floating interest rate paid | 4.59% |
Debentures due 2020 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 150 |
Fixed interest rate received | 3.875% |
Floating interest rate paid | 2.45% |
Notes due 2021 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 275 |
Fixed interest rate received | 3.47% |
Floating interest rate paid | 2.07% |
Senior notes due 2022 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 1,350 |
Fixed interest rate received | 2.75% |
Floating interest rate paid | 0.80% |
Notes due 2023 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 200 |
Fixed interest rate received | 3.68% |
Floating interest rate paid | 1.40% |
Debentures due 2024 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received | 7.625% |
Floating interest rate paid | 3.01% |
Debentures due 2029 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 50 |
Fixed interest rate received | 7.65% |
Floating interest rate paid | 3.17% |
Debentures due 2034 [Member] | |
Derivative [Line Items] | |
Notional amount | $ 25 |
Fixed interest rate received | 5.45% |
Floating interest rate paid | 0.80% |
London Interbank Offered Rate (LIBOR) [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 3 months |
Derivative, Basis Spread on Variable Rate | 0.00% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2017 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 4.26% |
London Interbank Offered Rate (LIBOR) [Member] | Senior notes due 2017 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 0.46% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2018 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 6 months |
Derivative, Basis Spread on Variable Rate | 3.18% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2019 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 3 months |
Derivative, Basis Spread on Variable Rate | 5.07% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2019 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 6 months |
Derivative, Basis Spread on Variable Rate | 3.84% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2020 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 2.12% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2021 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 1.74% |
London Interbank Offered Rate (LIBOR) [Member] | Senior notes due 2022 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 0.56% |
London Interbank Offered Rate (LIBOR) [Member] | Notes due 2023 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 1 month |
Derivative, Basis Spread on Variable Rate | 1.07% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2024 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 6 months |
Derivative, Basis Spread on Variable Rate | 2.48% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2029 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 6 months |
Derivative, Basis Spread on Variable Rate | 2.57% |
London Interbank Offered Rate (LIBOR) [Member] | Debentures due 2034 [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 6 months |
Derivative, Basis Spread on Variable Rate | 0.28% |
Derivative Financial Instruments and Hedging Activities Forward Starting Floating-to-Fixed Interest Rate Swaps (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Derivative [Line Items] | |
Notional amount | $ 50 |
Fixed interest rate paid | 2.52% |
Floating interest rate received | 0.00% |
London Interbank Offered Rate (LIBOR) [Member] | |
Derivative [Line Items] | |
Debt Instrument, Term | 3 months |
Derivative, Basis Spread on Variable Rate | 0.00% |
Derivative Financial Instruments and Hedging Activities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 27 | $ 47 |
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 18 | 8 |
Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 97 | 85 |
Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 40 | 52 |
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 8 | 5 |
Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 8 | 13 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | ||
Derivatives designated as hedges | ||
Derivative, Notional Amount | $ 3,715 | $ 3,440 |
Derivative, Lower Remaining Maturity Range | 2 years | 2 years |
Derivative, Higher Remaining Maturity Range | 19 years | 19 years |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 0 | $ 0 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 96 | 84 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Fixed-to-floating interest rate swaps | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | $ 2 | 10 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Floating-to-fixed interest rate swaps | ||
Derivatives designated as hedges | ||
Derivative, Higher Remaining Maturity Range | 12 years | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | ||
Derivatives designated as hedges | ||
Derivative, Notional Amount | $ 50 | |
Derivative, Lower Remaining Maturity Range | 1 year | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Floating-to-fixed interest rate swaps | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | ||
Derivatives designated as hedges | ||
Derivative, Notional Amount | $ 724 | $ 432 |
Derivative, Lower Remaining Maturity Range | 1 month | 1 month |
Derivative, Higher Remaining Maturity Range | 36 months | 36 months |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 18 | $ 8 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 1 | 1 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 8 | 5 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Currency exchange contracts | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 6 | 3 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | ||
Derivatives designated as hedges | ||
Derivative, Notional Amount | $ 1 | $ 1 |
Derivative, Lower Remaining Maturity Range | 1 month | 1 month |
Derivative, Higher Remaining Maturity Range | 12 months | 12 months |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other current assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | $ 0 | $ 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other noncurrent assets [Member] | ||
Derivatives designated as hedges | ||
Derivative asset designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other current liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Commodity contracts | Other noncurrent liabilities [Member] | ||
Derivatives designated as hedges | ||
Derivative liability designated as hedging instrument | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | ||
Derivatives designated as hedges | ||
Derivative, Notional Amount | $ 4,198 | $ 4,447 |
Derivative, Lower Remaining Maturity Range | 1 month | 1 month |
Derivative, Higher Remaining Maturity Range | 12 months | 12 months |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | Other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | $ 27 | $ 47 |
Not Designated as Hedging Instrument [Member] | Currency exchange contracts | Other current liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 40 | 52 |
Japanese Yen notes due 2018 [Member] | Japanese Yen notes payable [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Debt denominated in foreign currency designated as non-derivative net investment hedging instrument | 83 | 84 |
Japanese Yen notes due 2018 [Member] | Japanese Yen notes payable [Member] | Non-derivative net investment hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Debt denominated in foreign currency designated as non-derivative net investment hedging instrument | $ 83 | $ 84 |
Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Amounts recognized in accumulated other comprehensive income | ||
Eaton's target percentage of managing intercompany balance sheet exposure | 100.00% | |
Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in Accumulated other comprehensive loss | $ 20 | $ (3) |
Gain (loss) reclassified from Accumulated other comprehensive loss | 16 | 5 |
Floating-to-fixed interest rate swaps | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in Accumulated other comprehensive loss | 0 | 0 |
Floating-to-fixed interest rate swaps | Interest expense - net [Member] | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) reclassified from Accumulated other comprehensive loss | 0 | (1) |
Currency exchange contracts | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) recognized in Accumulated other comprehensive loss | 20 | (3) |
Currency exchange contracts | Cost of products sold [Member] | Cash Flow Hedging [Member] | ||
Amounts recognized in accumulated other comprehensive income | ||
Gain (loss) reclassified from Accumulated other comprehensive loss | $ 16 | $ 6 |
Derivative Financial Instruments and Hedging Activities Amounts Recognized in Net income (Details) - Interest expense - net [Member] - Fair Value Hedging [Member] - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | $ 0 | $ 0 |
Interest Rate Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | 20 | 113 |
Related Long Term Debt Converted To Floating Interest Rates By Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative designated as fair value hedges | $ (20) | $ (113) |
Accounts Receivable and Inventory (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accounts Receivable and Inventory [Abstract] | ||
Allowance for doubtful accounts receivable | $ 50 | $ 60 |
Percentage of inventory at FIFO accounted for using the LIFO method | 43.00% | 41.00% |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 885 | $ 924 |
Work-in-process | 412 | 422 |
Finished goods | 1,131 | 1,201 |
Inventory at FIFO | 2,428 | 2,547 |
Excess of Replacement or Current Costs over Stated LIFO Value | (105) | (119) |
Total inventory | $ 2,323 | $ 2,428 |
Business Segment and Geographic Region Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Business Segment Information | |||
Net sales | $ 20,855 | $ 22,552 | $ 22,046 |
Segment operating profit | 3,133 | 3,312 | 3,178 |
Litigation settlements | 0 | (644) | 0 |
Amortization of intangible assets | (401) | ||
Interest expense - net | (232) | (227) | (271) |
Income before income taxes | 2,145 | 1,761 | 1,884 |
Income tax (benefit) expense | 164 | (42) | 11 |
Net income | 1,981 | 1,803 | 1,873 |
Less net income for noncontrolling interests | (2) | (10) | (12) |
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 |
Business segment acquisition integration pretax charges | 42 | 129 | 117 |
Total business acquisition transaction costs | 0 | 0 | 9 |
Entity-wide revenue, major customer, amount | 0 | 0 | 0 |
Electrical Products [Member] | |||
Business Segment Information | |||
Net sales | 6,976 | 7,254 | 7,026 |
Segment operating profit | 1,156 | 1,184 | 1,090 |
Business segment acquisition integration pretax charges | 25 | 66 | 44 |
Electrical Systems and Services [Member] | |||
Business Segment Information | |||
Net sales | 5,931 | 6,457 | 6,430 |
Segment operating profit | 776 | 843 | 889 |
Business segment acquisition integration pretax charges | 15 | 51 | 37 |
Hydraulics [Member] | |||
Business Segment Information | |||
Net sales | 2,459 | 2,975 | 2,981 |
Segment operating profit | 246 | 367 | 355 |
Business segment acquisition integration pretax charges | 2 | 12 | 36 |
Aerospace [Member] | |||
Business Segment Information | |||
Net sales | 1,807 | 1,860 | 1,774 |
Segment operating profit | 310 | 273 | 252 |
Vehicle [Member] | |||
Business Segment Information | |||
Net sales | 3,682 | 4,006 | 3,835 |
Segment operating profit | 645 | 645 | 592 |
All Segments [Member] | |||
Business Segment Information | |||
Business segment acquisition integration pretax charges | 42 | 129 | 117 |
Corporate [Member] | |||
Business Segment Information | |||
Litigation settlements | 0 | (644) | 0 |
Amortization of intangible assets | (406) | (431) | (437) |
Interest expense - net | (232) | (227) | (271) |
Pension and other postretirement benefits expense | (130) | (138) | (183) |
Inventory step-up adjustment | 0 | 0 | (34) |
Other corporate expense - net | (220) | (111) | (369) |
Corporate acquisition integration charges | $ 5 | $ 25 | $ 37 |
Business Segment and Geographic Region Information Business Segment and Geographic Region Information (Details 1) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Segment Reporting Information [Line Items] | |||
Total assets | $ 31,031 | $ 33,529 | $ 35,491 |
Goodwill | 13,479 | 13,893 | 14,495 |
Other intangible assets | 6,014 | 6,556 | 7,186 |
Capital expenditures for property, plant and equipment | 506 | 632 | 614 |
Depreciation of property, plant and equipment | 479 | 514 | 516 |
Electrical Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,538 | 3,012 | 3,204 |
Goodwill | 6,642 | 6,940 | 7,189 |
Capital expenditures for property, plant and equipment | 137 | 170 | 152 |
Depreciation of property, plant and equipment | 137 | 148 | 151 |
Electrical Systems and Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,285 | 2,512 | 2,683 |
Goodwill | 4,279 | 4,314 | 4,517 |
Capital expenditures for property, plant and equipment | 94 | 147 | 113 |
Depreciation of property, plant and equipment | 82 | 90 | 86 |
Hydraulics [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,138 | 1,315 | 1,362 |
Goodwill | 1,259 | 1,327 | 1,385 |
Capital expenditures for property, plant and equipment | 61 | 79 | 80 |
Depreciation of property, plant and equipment | 67 | 67 | 65 |
Aerospace [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 841 | 832 | 852 |
Goodwill | 956 | 962 | 1,048 |
Capital expenditures for property, plant and equipment | 33 | 28 | 29 |
Depreciation of property, plant and equipment | 28 | 28 | 27 |
Vehicle [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,579 | 1,668 | 1,716 |
Goodwill | 343 | 350 | 356 |
Capital expenditures for property, plant and equipment | 119 | 160 | 161 |
Depreciation of property, plant and equipment | 113 | 130 | 133 |
All Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 8,381 | 9,339 | 9,817 |
Capital expenditures for property, plant and equipment | 444 | 584 | 535 |
Depreciation of property, plant and equipment | 427 | 463 | 462 |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 3,157 | 3,741 | 3,993 |
Capital expenditures for property, plant and equipment | 62 | 48 | 79 |
Depreciation of property, plant and equipment | $ 52 | $ 51 | $ 54 |
Business Segment and Geographic Region Information Business Segment and Geographic Region Information (Details 2) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 20,855 | $ 22,552 | $ 22,046 |
Net property, plant and equipment | 3,565 | 3,750 | 3,833 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 11,396 | 11,701 | 11,092 |
Net property, plant and equipment | 1,982 | 1,988 | 1,966 |
Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 969 | 1,113 | 1,154 |
Net property, plant and equipment | 19 | 25 | 28 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,726 | 1,988 | 2,113 |
Net property, plant and equipment | 243 | 306 | 331 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 4,379 | 5,074 | 5,112 |
Net property, plant and equipment | 734 | 799 | 856 |
Asia Pacific [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 2,385 | 2,676 | 2,575 |
Net property, plant and equipment | $ 587 | $ 632 | $ 652 |
Condensed Consolidating Financial Statements Consolidating Statements of Comprehensive Income (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Condensed Income Statements, Captions [Line Items] | |||
Net sales | $ 20,855 | $ 22,552 | $ 22,046 |
Cost of products sold | 14,292 | 15,646 | 15,369 |
Selling and administrative expense | 3,596 | 3,810 | 3,886 |
Litigation settlements | 0 | 644 | 0 |
Research and development expense | 625 | 647 | 644 |
Interest expense (income) - net | 232 | 227 | 271 |
Other expense (income) - net | (35) | (183) | (8) |
Equity in (earnings) loss of subsidiaries, net of tax | 0 | 0 | 0 |
Intercompany expense (income) - net | 0 | 0 | 0 |
Income before income taxes | 2,145 | 1,761 | 1,884 |
Income tax (benefit) expense | 164 | (42) | 11 |
Net income | 1,981 | 1,803 | 1,873 |
Less net income for noncontrolling interests | (2) | (10) | (12) |
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (964) | (1,339) | 404 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | 1,015 | 454 | 2,265 |
Eaton Corporation plc [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 |
Selling and administrative expense | 141 | 171 | 32 |
Litigation settlements | 0 | ||
Research and development expense | 0 | 0 | 0 |
Interest expense (income) - net | 0 | 0 | 0 |
Other expense (income) - net | 0 | 0 | 0 |
Equity in (earnings) loss of subsidiaries, net of tax | (2,456) | (2,191) | (2,147) |
Intercompany expense (income) - net | 336 | 227 | 254 |
Income before income taxes | 1,979 | 1,793 | 1,861 |
Income tax (benefit) expense | 0 | 0 | 0 |
Net income | 1,979 | 1,793 | 1,861 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 1,979 | 1,793 | 1,861 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (964) | (1,339) | 404 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | 1,015 | 454 | 2,265 |
Eaton Corporation [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 6,925 | 6,990 | 6,695 |
Cost of products sold | 5,508 | 5,519 | 5,227 |
Selling and administrative expense | 1,223 | 1,246 | 1,400 |
Litigation settlements | 644 | ||
Research and development expense | 266 | 240 | 255 |
Interest expense (income) - net | 222 | 225 | 271 |
Other expense (income) - net | 27 | (17) | 8 |
Equity in (earnings) loss of subsidiaries, net of tax | (793) | (663) | (657) |
Intercompany expense (income) - net | (452) | (263) | (155) |
Income before income taxes | 924 | 59 | 346 |
Income tax (benefit) expense | 103 | (100) | (108) |
Net income | 821 | 159 | 454 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 821 | 159 | 454 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | 1 | (197) | 221 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | 822 | (38) | 675 |
Guarantors [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 6,654 | 6,885 | 6,421 |
Cost of products sold | 5,033 | 5,075 | 4,784 |
Selling and administrative expense | 737 | 743 | 749 |
Litigation settlements | 0 | ||
Research and development expense | 196 | 202 | 200 |
Interest expense (income) - net | 21 | 25 | 28 |
Other expense (income) - net | 2 | (81) | 4 |
Equity in (earnings) loss of subsidiaries, net of tax | (3,267) | (2,654) | (2,005) |
Intercompany expense (income) - net | 1,239 | 855 | (433) |
Income before income taxes | 2,693 | 2,720 | 3,094 |
Income tax (benefit) expense | (73) | 76 | (90) |
Net income | 2,766 | 2,644 | 3,184 |
Less net income for noncontrolling interests | 0 | 0 | 0 |
Net income attributable to Eaton ordinary shareholders | 2,766 | 2,644 | 3,184 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (947) | (1,368) | 475 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | 1,819 | 1,276 | 3,659 |
Other Subsidiaries [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | 12,538 | 13,521 | 13,579 |
Cost of products sold | 8,984 | 9,882 | 10,010 |
Selling and administrative expense | 1,495 | 1,650 | 1,705 |
Litigation settlements | 0 | ||
Research and development expense | 163 | 205 | 189 |
Interest expense (income) - net | (13) | (29) | (22) |
Other expense (income) - net | (64) | (85) | (20) |
Equity in (earnings) loss of subsidiaries, net of tax | (666) | (292) | (277) |
Intercompany expense (income) - net | (1,123) | (819) | 334 |
Income before income taxes | 3,762 | 3,009 | 1,660 |
Income tax (benefit) expense | 145 | (11) | 207 |
Net income | 3,617 | 3,020 | 1,453 |
Less net income for noncontrolling interests | (3) | (8) | (9) |
Net income attributable to Eaton ordinary shareholders | 3,614 | 3,012 | 1,444 |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | (1,170) | (1,646) | 262 |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | 2,444 | 1,366 | 1,706 |
Consolidating Adjustments [Member] | |||
Condensed Income Statements, Captions [Line Items] | |||
Net sales | (5,262) | (4,844) | (4,649) |
Cost of products sold | (5,233) | (4,830) | (4,652) |
Selling and administrative expense | 0 | 0 | 0 |
Litigation settlements | 0 | ||
Research and development expense | 0 | 0 | 0 |
Interest expense (income) - net | 2 | 6 | (6) |
Other expense (income) - net | 0 | 0 | 0 |
Equity in (earnings) loss of subsidiaries, net of tax | 7,182 | 5,800 | 5,086 |
Intercompany expense (income) - net | 0 | 0 | 0 |
Income before income taxes | (7,213) | (5,820) | (5,077) |
Income tax (benefit) expense | (11) | (7) | 2 |
Net income | (7,202) | (5,813) | (5,079) |
Less net income for noncontrolling interests | 1 | (2) | (3) |
Net income attributable to Eaton ordinary shareholders | (7,201) | (5,815) | (5,082) |
Other comprehensive (loss) income attributable to Eaton ordinary shareholders | 2,116 | 3,211 | (958) |
Total comprehensive (loss) income attributable to Eaton ordinary shareholders | $ (5,085) | $ (2,604) | $ (6,040) |
Condensed Consolidating Financial Statements Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
Nov. 20, 2012 |
---|---|---|---|---|---|
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | $ 268 | $ 781 | $ 915 | $ 577 | |
Short-term investments | 177 | 245 | |||
Accounts receivable - net | 3,479 | 3,667 | |||
Intercompany accounts receivable | 0 | 0 | |||
Inventory | 2,323 | 2,428 | |||
Prepaid expenses and other current assets | 369 | 979 | |||
Total current assets | 6,616 | 8,100 | |||
Property, plant and equipment - net | 3,565 | 3,750 | 3,833 | ||
Goodwill | 13,479 | 13,893 | 14,495 | ||
Other intangible assets | 6,014 | 6,556 | 7,186 | ||
Deferred income taxes | 362 | 228 | |||
Investment in subsidiaries | 0 | 0 | |||
Intercompany loans receivable | 0 | 0 | |||
Other assets | 995 | 1,002 | |||
Total assets | 31,031 | 33,529 | 35,491 | ||
Short-term debt | 426 | 2 | |||
Current portion of long-term debt | 242 | 1,008 | |||
Accounts payable | 1,758 | 1,940 | |||
Intercompany accounts payable | 0 | 0 | |||
Accrued compensation | 366 | 420 | |||
Other current liabilities | 1,833 | 1,985 | |||
Total current liabilities | 4,625 | 5,355 | |||
Long-term debt | 7,781 | 8,024 | |||
Pension liabilities | 1,586 | 1,812 | |||
Other postretirement benefits liabilities | 440 | 513 | |||
Deferred income taxes | 390 | 901 | |||
Intercompany loans payable | 0 | 0 | |||
Other noncurrent liabilities | 978 | 1,085 | |||
Total noncurrent liabilities | 11,175 | 12,335 | |||
Eaton shareholders' equity | 15,186 | 15,786 | |||
Noncontrolling interests | 45 | 53 | |||
Total equity | 15,231 | 15,839 | 16,863 | 15,178 | |
Total liabilities and equity | 31,031 | 33,529 | |||
Eaton and certain other of Eaton's principal 100% owned subsidiaries full and unconditional guarantee of the Senior Notes, on a joint and several basis | 100.00% | ||||
Eaton Corporation plc [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 0 | 1 | 3 | 7 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 0 | 0 | |||
Intercompany accounts receivable | 1 | 2 | |||
Inventory | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | |||
Total current assets | 1 | 3 | |||
Property, plant and equipment - net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Investment in subsidiaries | 29,627 | 26,612 | |||
Intercompany loans receivable | 0 | 0 | |||
Other assets | 0 | 0 | |||
Total assets | 29,628 | 26,615 | |||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable | 0 | 0 | |||
Intercompany accounts payable | 219 | 117 | |||
Accrued compensation | 0 | 0 | |||
Other current liabilities | 1 | 1 | |||
Total current liabilities | 220 | 118 | |||
Long-term debt | 0 | 0 | |||
Pension liabilities | 0 | 0 | |||
Other postretirement benefits liabilities | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany loans payable | 14,222 | 10,711 | |||
Other noncurrent liabilities | 0 | 0 | |||
Total noncurrent liabilities | 14,222 | 10,711 | |||
Eaton shareholders' equity | 15,186 | 15,786 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 15,186 | 15,786 | |||
Total liabilities and equity | 29,628 | 26,615 | |||
Eaton Corporation [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 26 | 173 | 51 | 54 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 512 | 500 | |||
Intercompany accounts receivable | 842 | 759 | |||
Inventory | 357 | 397 | |||
Prepaid expenses and other current assets | 77 | 464 | |||
Total current assets | 1,814 | 2,293 | |||
Property, plant and equipment - net | 930 | 972 | |||
Goodwill | 1,355 | 1,355 | |||
Other intangible assets | 182 | 196 | |||
Deferred income taxes | 1,016 | 889 | |||
Investment in subsidiaries | 13,001 | 12,238 | |||
Intercompany loans receivable | 8,641 | 7,542 | |||
Other assets | 527 | 473 | |||
Total assets | 27,466 | 25,958 | |||
Short-term debt | 408 | 0 | |||
Current portion of long-term debt | 1 | 702 | |||
Accounts payable | 392 | 475 | |||
Intercompany accounts payable | 4,009 | 4,087 | |||
Accrued compensation | 77 | 112 | |||
Other current liabilities | 644 | 674 | |||
Total current liabilities | 5,531 | 6,050 | |||
Long-term debt | 7,088 | 7,079 | |||
Pension liabilities | 639 | 726 | |||
Other postretirement benefits liabilities | 245 | 283 | |||
Deferred income taxes | 0 | 0 | |||
Intercompany loans payable | 2,962 | 2,723 | |||
Other noncurrent liabilities | 346 | 457 | |||
Total noncurrent liabilities | 11,280 | 11,268 | |||
Eaton shareholders' equity | 10,655 | 8,640 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 10,655 | 8,640 | |||
Total liabilities and equity | 27,466 | 25,958 | |||
Guarantors [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 7 | 13 | 10 | 14 | |
Short-term investments | 2 | 1 | |||
Accounts receivable - net | 1,030 | 955 | |||
Intercompany accounts receivable | 3,888 | 3,822 | |||
Inventory | 651 | 637 | |||
Prepaid expenses and other current assets | 40 | 171 | |||
Total current assets | 5,618 | 5,599 | |||
Property, plant and equipment - net | 750 | 756 | |||
Goodwill | 6,264 | 6,263 | |||
Other intangible assets | 3,624 | 3,811 | |||
Deferred income taxes | 0 | 10 | |||
Investment in subsidiaries | 60,139 | 58,684 | |||
Intercompany loans receivable | 1,573 | 2,249 | |||
Other assets | 122 | 142 | |||
Total assets | 78,090 | 77,514 | |||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 240 | 304 | |||
Accounts payable | 260 | 340 | |||
Intercompany accounts payable | 2,248 | 3,443 | |||
Accrued compensation | 53 | 59 | |||
Other current liabilities | 318 | 343 | |||
Total current liabilities | 3,119 | 4,489 | |||
Long-term debt | 675 | 932 | |||
Pension liabilities | 165 | 183 | |||
Other postretirement benefits liabilities | 118 | 136 | |||
Deferred income taxes | 815 | 1,160 | |||
Intercompany loans payable | 36,432 | 36,162 | |||
Other noncurrent liabilities | 200 | 186 | |||
Total noncurrent liabilities | 38,405 | 38,759 | |||
Eaton shareholders' equity | 36,566 | 34,266 | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 36,566 | 34,266 | |||
Total liabilities and equity | 78,090 | 77,514 | |||
Other Subsidiaries [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 235 | 594 | 851 | 502 | |
Short-term investments | 175 | 244 | |||
Accounts receivable - net | 1,937 | 2,212 | |||
Intercompany accounts receivable | 2,928 | 4,101 | |||
Inventory | 1,395 | 1,445 | |||
Prepaid expenses and other current assets | 229 | 340 | |||
Total current assets | 6,899 | 8,936 | |||
Property, plant and equipment - net | 1,885 | 2,022 | |||
Goodwill | 5,860 | 6,275 | |||
Other intangible assets | 2,208 | 2,549 | |||
Deferred income taxes | 218 | 137 | |||
Investment in subsidiaries | 10,163 | 9,185 | |||
Intercompany loans receivable | 44,835 | 40,635 | |||
Other assets | 346 | 387 | |||
Total assets | 72,414 | 70,126 | |||
Short-term debt | 18 | 2 | |||
Current portion of long-term debt | 1 | 2 | |||
Accounts payable | 1,106 | 1,125 | |||
Intercompany accounts payable | 1,183 | 1,037 | |||
Accrued compensation | 236 | 249 | |||
Other current liabilities | 875 | 981 | |||
Total current liabilities | 3,419 | 3,396 | |||
Long-term debt | 17 | 13 | |||
Pension liabilities | 782 | 903 | |||
Other postretirement benefits liabilities | 77 | 94 | |||
Deferred income taxes | 447 | 549 | |||
Intercompany loans payable | 1,433 | 830 | |||
Other noncurrent liabilities | 432 | 442 | |||
Total noncurrent liabilities | 3,188 | 2,831 | |||
Eaton shareholders' equity | 65,770 | 63,854 | |||
Noncontrolling interests | 37 | 45 | |||
Total equity | 65,807 | 63,899 | |||
Total liabilities and equity | 72,414 | 70,126 | |||
Consolidating Adjustments [Member] | |||||
Condensed Consolidating Balance Sheets [Line Items] | |||||
Cash | 0 | 0 | $ 0 | $ 0 | |
Short-term investments | 0 | 0 | |||
Accounts receivable - net | 0 | 0 | |||
Intercompany accounts receivable | (7,659) | (8,684) | |||
Inventory | (80) | (51) | |||
Prepaid expenses and other current assets | 23 | 4 | |||
Total current assets | (7,716) | (8,731) | |||
Property, plant and equipment - net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Other intangible assets | 0 | 0 | |||
Deferred income taxes | (872) | (808) | |||
Investment in subsidiaries | (112,930) | (106,719) | |||
Intercompany loans receivable | (55,049) | (50,426) | |||
Other assets | 0 | 0 | |||
Total assets | (176,567) | (166,684) | |||
Short-term debt | 0 | 0 | |||
Current portion of long-term debt | 0 | 0 | |||
Accounts payable | 0 | 0 | |||
Intercompany accounts payable | (7,659) | (8,684) | |||
Accrued compensation | 0 | 0 | |||
Other current liabilities | (5) | (14) | |||
Total current liabilities | (7,664) | (8,698) | |||
Long-term debt | 1 | 0 | |||
Pension liabilities | 0 | 0 | |||
Other postretirement benefits liabilities | 0 | 0 | |||
Deferred income taxes | (872) | (808) | |||
Intercompany loans payable | (55,049) | (50,426) | |||
Other noncurrent liabilities | 0 | 0 | |||
Total noncurrent liabilities | (55,920) | (51,234) | |||
Eaton shareholders' equity | (112,991) | (106,760) | |||
Noncontrolling interests | 8 | 8 | |||
Total equity | (112,983) | (106,752) | |||
Total liabilities and equity | $ (176,567) | $ (166,684) |
Condensed Consolidating Financial Statements Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | $ 2,371 | $ 1,878 | $ 2,285 |
Capital expenditures for property, plant and equipment | (506) | (632) | (614) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | (72) | 2 | (9) |
Sales (purchases) of short-term investments - net | 37 | 522 | (288) |
Investment in affiliates | 0 | 0 | |
Loans to affiliates | 0 | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 | 0 |
Proceeds from sale of businesses | 1 | 282 | 777 |
Other - net | (35) | (31) | (68) |
Net cash provided by (used in) investing activities | (575) | 143 | (202) |
Proceeds from borrowings | 425 | 0 | 9 |
Payments on borrowings | (1,027) | (582) | (1,096) |
Proceeds from borrowings from affiliates | 0 | 0 | 0 |
Payments on borrowings from affiliates | 0 | 0 | 0 |
Capital contribution from affiliates | 0 | 0 | |
Other intercompany financing activities | 0 | 0 | 0 |
Cash dividends paid | (1,026) | (929) | (796) |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 52 | 54 | 121 |
(Repurchase) issuance of shares | (682) | (650) | 0 |
Excess tax benefit from equity-based compensation | 1 | 20 | 32 |
Other - net | (10) | (43) | (6) |
Net cash provided by (used in) financing activities | (2,267) | (2,130) | (1,736) |
Effect of currency on cash | (42) | (25) | (9) |
Total (decrease) increase in cash | (513) | (134) | 338 |
Cash at the beginning of the period | 781 | 915 | 577 |
Cash at the end of the period | 268 | 781 | 915 |
Eaton Corporation plc [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (137) | (93) | (17) |
Capital expenditures for property, plant and equipment | 0 | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 0 |
Investment in affiliates | (1,482) | (753) | |
Loans to affiliates | 0 | 0 | 0 |
Repayments of loans from affiliates | 0 | 0 | 0 |
Proceeds from sale of businesses | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) investing activities | (1,482) | (753) | 0 |
Proceeds from borrowings | 0 | 0 | |
Payments on borrowings | 0 | 0 | 0 |
Proceeds from borrowings from affiliates | 3,322 | 2,628 | 0 |
Payments on borrowings from affiliates | (48) | (476) | 0 |
Capital contribution from affiliates | 0 | 0 | |
Other intercompany financing activities | 0 | 217 | 688 |
Cash dividends paid | (1,026) | (929) | (796) |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 52 | 54 | 121 |
(Repurchase) issuance of shares | (682) | (650) | |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | 1,618 | 844 | 13 |
Effect of currency on cash | 0 | 0 | 0 |
Total (decrease) increase in cash | (1) | (2) | (4) |
Cash at the beginning of the period | 1 | 3 | 7 |
Cash at the end of the period | 0 | 1 | 3 |
Eaton Corporation [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (46) | (411) | 860 |
Capital expenditures for property, plant and equipment | (94) | (127) | (171) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 25 |
Investment in affiliates | 0 | 0 | |
Loans to affiliates | (1,235) | (354) | (535) |
Repayments of loans from affiliates | 342 | 978 | 36 |
Proceeds from sale of businesses | 0 | 93 | 0 |
Other - net | (50) | (47) | (41) |
Net cash provided by (used in) investing activities | (1,037) | 543 | (686) |
Proceeds from borrowings | 408 | 0 | |
Payments on borrowings | (724) | (553) | (1,048) |
Proceeds from borrowings from affiliates | 6,885 | 7,599 | 2,395 |
Payments on borrowings from affiliates | (6,122) | (6,907) | (2,921) |
Capital contribution from affiliates | 1,176 | 0 | |
Other intercompany financing activities | (688) | (169) | 1,365 |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 0 | 0 | 0 |
(Repurchase) issuance of shares | 0 | 0 | |
Excess tax benefit from equity-based compensation | 1 | 20 | 32 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | 936 | (10) | (177) |
Effect of currency on cash | 0 | 0 | 0 |
Total (decrease) increase in cash | (147) | 122 | (3) |
Cash at the beginning of the period | 173 | 51 | 54 |
Cash at the end of the period | 26 | 173 | 51 |
Guarantors [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (283) | (218) | 428 |
Capital expenditures for property, plant and equipment | (146) | (168) | (119) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | (36) | 0 | 0 |
Sales (purchases) of short-term investments - net | (2) | 133 | (95) |
Investment in affiliates | (1,176) | 0 | |
Loans to affiliates | (39) | (162) | (545) |
Repayments of loans from affiliates | 359 | 212 | 626 |
Proceeds from sale of businesses | 0 | 175 | 0 |
Other - net | 47 | 44 | (12) |
Net cash provided by (used in) investing activities | (993) | 234 | (145) |
Proceeds from borrowings | 0 | 0 | |
Payments on borrowings | (301) | (1) | (43) |
Proceeds from borrowings from affiliates | 997 | 808 | 4,260 |
Payments on borrowings from affiliates | (1,282) | (1,875) | (2,874) |
Capital contribution from affiliates | 1,482 | 753 | |
Other intercompany financing activities | 374 | 302 | (1,630) |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 0 | 0 | 0 |
Exercise of employee stock options | 0 | 0 | 0 |
(Repurchase) issuance of shares | 0 | 0 | |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | 1,270 | (13) | (287) |
Effect of currency on cash | 0 | 0 | 0 |
Total (decrease) increase in cash | (6) | 3 | (4) |
Cash at the beginning of the period | 13 | 10 | 14 |
Cash at the end of the period | 7 | 13 | 10 |
Other Subsidiaries [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | 2,841 | 2,568 | 1,067 |
Capital expenditures for property, plant and equipment | (266) | (337) | (324) |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | (36) | 2 | (9) |
Sales (purchases) of short-term investments - net | 39 | 389 | (218) |
Investment in affiliates | (1,482) | (753) | |
Loans to affiliates | (10,608) | (10,546) | (6,215) |
Repayments of loans from affiliates | 7,148 | 8,451 | 5,795 |
Proceeds from sale of businesses | 1 | 14 | 777 |
Other - net | (32) | (28) | (15) |
Net cash provided by (used in) investing activities | (5,236) | (2,808) | (209) |
Proceeds from borrowings | 17 | 9 | |
Payments on borrowings | (2) | (28) | (5) |
Proceeds from borrowings from affiliates | 678 | 27 | 640 |
Payments on borrowings from affiliates | (397) | (383) | (662) |
Capital contribution from affiliates | 1,482 | 753 | |
Other intercompany financing activities | 314 | (350) | (423) |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | (4) | 32 | (53) |
Exercise of employee stock options | 0 | 0 | 0 |
(Repurchase) issuance of shares | 0 | 0 | |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | (10) | (43) | (6) |
Net cash provided by (used in) financing activities | 2,078 | 8 | (500) |
Effect of currency on cash | (42) | (25) | (9) |
Total (decrease) increase in cash | (359) | (257) | 349 |
Cash at the beginning of the period | 594 | 851 | 502 |
Cash at the end of the period | 235 | 594 | 851 |
Consolidating Adjustments [Member] | |||
Condensed Consolidating Statements of Cash Flows [Line Items] | |||
Net cash (used in) provided by operating activities | (4) | 32 | (53) |
Capital expenditures for property, plant and equipment | 0 | 0 | 0 |
Cash received from (paid for) acquisitions of businesses, net of cash acquired | 0 | 0 | 0 |
Sales (purchases) of short-term investments - net | 0 | 0 | 0 |
Investment in affiliates | 4,140 | 1,506 | |
Loans to affiliates | 11,882 | 11,062 | 7,295 |
Repayments of loans from affiliates | (7,849) | (9,641) | (6,457) |
Proceeds from sale of businesses | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) investing activities | 8,173 | 2,927 | 838 |
Proceeds from borrowings | 0 | 0 | |
Payments on borrowings | 0 | 0 | 0 |
Proceeds from borrowings from affiliates | (11,882) | (11,062) | (7,295) |
Payments on borrowings from affiliates | 7,849 | 9,641 | 6,457 |
Capital contribution from affiliates | (4,140) | (1,506) | |
Other intercompany financing activities | 0 | 0 | 0 |
Cash dividends paid | 0 | 0 | 0 |
Cash dividends paid to affiliates | 4 | (32) | 53 |
Exercise of employee stock options | 0 | 0 | 0 |
(Repurchase) issuance of shares | 0 | 0 | |
Excess tax benefit from equity-based compensation | 0 | 0 | 0 |
Other - net | 0 | 0 | 0 |
Net cash provided by (used in) financing activities | (8,169) | (2,959) | (785) |
Effect of currency on cash | 0 | 0 | 0 |
Total (decrease) increase in cash | 0 | 0 | 0 |
Cash at the beginning of the period | 0 | 0 | 0 |
Cash at the end of the period | $ 0 | $ 0 | $ 0 |
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