XML 49 R30.htm IDEA: XBRL DOCUMENT v3.8.0.1
Retirement Benefits Plans (Tables)
 12 Months Ended
Dec. 31, 2017
Retirement Benefits [Abstract]  
Obligations and funded status
Obligations and Funded Status
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Funded status
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
$
3,585

 
$
2,969

 
$
1,727

 
$
1,478

 
$
55

 
$
74

Benefit obligations
(3,961
)
 
(3,771
)
 
(2,399
)
 
(2,314
)
 
(448
)
 
(473
)
Funded status
$
(376
)
 
$
(802
)
 
$
(672
)
 
$
(836
)
 
$
(393
)
 
$
(399
)
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in the Consolidated
   Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
Non-current assets
$
82

 
$
34

 
$
136

 
$
33

 
$
—

 
$
—

Current liabilities
(15
)
 
(24
)
 
(25
)
 
(22
)
 
(31
)
 
(31
)
Non-current liabilities
(443
)
 
(812
)
 
(783
)
 
(847
)
 
(362
)
 
(368
)
Total
$
(376
)
 
$
(802
)
 
$
(672
)
 
$
(836
)
 
$
(393
)
 
$
(399
)
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other
   comprehensive loss (pretax)
 
 
 
 
 
 
 
 
 
 
 
Net actuarial loss
$
1,059

 
$
1,232

 
$
596

 
$
771

 
$
19

 
$
21

Prior service cost (credit)
4

 
3

 
8

 
8

 
(46
)
 
(60
)
Total
$
1,063

 
$
1,235

 
$
604

 
$
779

 
$
(27
)
 
$
(39
)
Change in benefit obligations
Change in Benefit Obligations
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Balance at January 1
$
3,771

 
$
3,829

 
$
2,314

 
$
2,175

 
$
473

 
$
575

Service cost
96

 
111

 
71

 
63

 
3

 
4

Interest cost
123

 
125

 
55

 
62

 
14

 
17

Actuarial (gain) loss
271

 
52

 
(148
)
 
355

 
2

 
(72
)
Gross benefits paid
(301
)
 
(346
)
 
(97
)
 
(94
)
 
(74
)
 
(79
)
Currency translation
—

 
—

 
223

 
(245
)
 
3

 
1

Plan amendments
1


—


—


2


—


—

Other
—

 
—

 
(19
)
 
(4
)
 
27

 
27

Balance at December 31
$
3,961

 
$
3,771

 
$
2,399

 
$
2,314

 
$
448

 
$
473

 
 
 
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
$
3,802

 
$
3,620

 
$
2,283

 
$
2,189

 
 
 
 
Change in plan assets
Change in Plan Assets
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Balance at January 1
$
2,969

 
$
2,934

 
$
1,478

 
$
1,472

 
$
74

 
$
93

Actual return on plan assets
543

 
221

 
131

 
212

 
8

 
3

Employer contributions
374

 
160

 
99

 
102

 
20

 
30

Gross benefits paid
(301
)
 
(346
)
 
(97
)
 
(94
)
 
(74
)
 
(79
)
Currency translation
—

 
—

 
135

 
(211
)
 
—

 
—

Other
—

 
—

 
(19
)
 
(3
)
 
27

 
27

Balance at December 31
$
3,585

 
$
2,969

 
$
1,727

 
$
1,478

 
$
55

 
$
74
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:
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
2017
 
2016
 
2017
 
2016
Projected benefit obligation
$
3,540

 
$
3,342

 
$
966

 
$
1,902

Accumulated benefit obligation
3,380

 
3,190

 
911

 
1,824

Fair value of plan assets
3,081

 
2,505

 
175

 
1,066
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:
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Balance at January 1
$
1,235

 
$
1,327

 
$
779

 
$
653

 
$
(39
)
 
$
21

Prior service cost arising during the year
1

 
—

 
—

 
2

 
—

 
—

Net loss (gain) arising during the year
(28
)
 
81

 
(185
)
 
235

 
(2
)
 
(69
)
Currency translation
—

 
—

 
66

 
(75
)
 
1

 
1

Less amounts included in expense during the year
(145
)
 
(173
)
 
(56
)
 
(36
)
 
13

 
8

Net change for the year
(172
)
 
(92
)
 
(175
)
 
126

 
12

 
(60
)
Balance at December 31
$
1,063

 
$
1,235

 
$
604

 
$
779

 
$
(27
)
 
$
(39
)
Benefits expense
Benefits Expense
 
United States
pension benefit expense
 
Non-United States
pension benefit expense
 
Other postretirement
benefits expense
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Service cost
$
96

 
$
111

 
$
123

 
$
71

 
$
63

 
$
71

 
$
3

 
$
4

 
$
6

Interest cost
123

 
125

 
156

 
55

 
62

 
72

 
14

 
17

 
24

Expected return on plan assets
(244
)
 
(250
)
 
(262
)
 
(94
)
 
(92
)
 
(99
)
 
(4
)
 
(6
)
 
(5
)
Amortization
83

 
92

 
119

 
51

 
33

 
40

 
(13
)
 
(9
)
 
2

 
58

 
78

 
136

 
83

 
66

 
84

 
—

 
6

 
27

Settlements and special termination benefits
62

 
81

 
74

 
5

 
3

 
2

 
—

 
1

 
—

Total expense
$
120

 
$
159

 
$
210

 
$
88

 
$
69

 
$
86

 
$
—

 
$
7

 
$
27
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 2018 follow:
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
Actuarial loss
$
146

 
$
38

 
$
1

Prior service cost (credit)
1

 
1

 
(14
)
Total
$
147

 
$
39

 
$
(13
)
Assumptions used to determine other postretirement obligations and expense
Pension Plans
 
United States
pension plans
 
Non-United States
pension plans
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Assumptions used to determine benefit obligation at year-end
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.64
%
 
4.12
%
 
4.22
%
 
2.62
%
 
2.63
%
 
3.46
%
Rate of compensation increase
3.15
%
 
3.15
%
 
3.18
%
 
3.11
%
 
3.13
%
 
3.12
%
 
 
 
 
 
 
 
 
 
 
 
 
Assumptions used to determine expense
 
 
 
 
 
 
 
 
 
 
 
Discount rate used to determine benefit obligation
4.12
%
 
4.22
%
 
3.97
%
 
2.63
%
 
3.46
%
 
3.33
%
Discount rate used to determine service cost
4.31
%
 
4.35
%
 
3.97
%
 
3.38
%
 
4.13
%
 
3.33
%
Discount rate used to determine interest cost
3.40
%
 
3.42
%
 
3.97
%
 
2.34
%
 
3.07
%
 
3.33
%
Expected long-term return on plan assets
7.90
%
 
8.50
%
 
8.50
%
 
6.30
%
 
6.62
%
 
6.92
%
Rate of compensation increase
3.15
%
 
3.18
%
 
3.16
%
 
3.13
%
 
3.12
%
 
3.13
%
Assumptions used to determine other postretirement benefits obligations and expense
Assumptions used to determine other postretirement benefits obligations and expense follow:
 
Other postretirement
benefits plans
 
2017
 
2016
 
2015
Assumptions used to determine benefit obligation at year-end
 
 
 
 
 
Discount rate
3.55
%
 
3.96
%
 
4.04
%
Health care cost trend rate assumed for next year
8.25
%
 
7.35
%
 
7.10
%
Ultimate health care cost trend rate
4.75
%
 
4.75
%
 
4.75
%
Year ultimate health care cost trend rate is achieved
2027

 
2026

 
2025

 
 
 
 
 
 
Assumptions used to determine expense
 
 
 
 
 
Discount rate used to determine benefit obligation
3.96
%
 
4.04
%
 
3.79
%
Discount rate used to determine service cost
4.11
%
 
4.26
%
 
3.79
%
Discount rate used to determine interest cost
3.18
%
 
3.12
%
 
3.79
%
Initial health care cost trend rate
7.35
%
 
7.10
%
 
6.31
%
Ultimate health care cost trend rate
4.75
%
 
4.75
%
 
4.77
%
Year ultimate health care cost trend rate is achieved
2026

 
2025

 
2024
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:
 
1% increase
 
1% decrease
Effect on total service and interest cost
$
1

 
$
(1
)
Effect on other postretirement liabilities
13

 
(12
)
Employer contributions to pension plans
Contributions to pension plans that Eaton expects to make in 2018, and made in 2017, 2016 and 2015, follow:
 
2018
 
2017
 
2016
 
2015
United States plans
$
16

 
$
374

 
$
160

 
$
221

Non-United States plans
96

 
99

 
102

 
109

Total contributions
$
112

 
$
473

 
$
262

 
$
330
Expected pension and other postretirement benefit payments and expected subsidy
For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 would reduce the gross payments listed below.
 
Estimated
United States
pension payments
 
Estimated
non-United States
pension payments
 
Estimated other postretirement
benefit payments
 
 
 
Gross
 
Medicare prescription
drug subsidy
2018
$
291

 
$
88

 
$
47

 
$
(2
)
2019
291

 
90

 
43

 
(2
)
2020
292

 
93

 
39

 
(2
)
2021
299

 
95

 
35

 
(1
)
2022
298

 
99

 
35

 
—

2023 - 2027
1,478

 
548

 
141

 
(2
)
Fair value of pension plan assets
A summary of the fair value of pension plan assets at December 31, 2017 and 2016, follows:
 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2017

 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Non-United States equity and global equities
$
741

 
$
—

 
$
741

 
$
—

United States equity
86

 
—

 
86

 
—

Fixed income
478

 
—

 
478

 
—

Fixed income securities
709

 
—

 
709

 
—

United States treasuries
67

 
67

 
—

 
—

Bank loans
161


—


161


—

Real estate
239

 
220

 
—

 
19

Equity securities
139

 
139

 
—

 
—

Cash equivalents
86

 
51

 
35

 
—

Exchange traded funds
224

 
224

 
—

 
—

Other
81

 
—

 
8

 
73

Common collective and other trusts measured at net asset value
2,225

 
 
 
 
 
 
Hedge funds measured at net asset value
67

 
 
 
 
 
 
Money market funds measured at net asset value
9

 
 
 
 
 
 
Total pension plan assets
$
5,312

 
$
701

 
$
2,218

 
$
92




 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2016
 
 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Non-United States equity and global equities
$
413

 
$
—

 
$
413

 
$
—

United States equity
94

 
—

 
94

 
—

Fixed income
422

 
—

 
422

 
—

Fixed income securities
359

 
—

 
359

 
—

United States treasuries
123

 
123

 
—

 
—

Bank loans
150

 
—

 
150

 
—

Real estate
201

 
195

 
—

 
6

Equity securities
104

 
104

 
—

 
—

Cash equivalents
276

 
21

 
255

 
—

Exchange traded funds
55

 
55

 
—

 
—

Other
109

 
—

 
14

 
95

Common collective and other trusts measured at net asset value
2,038

 
 
 
 
 
 
Hedge funds measured at net asset value
85

 
 
 
 
 
 
Money market funds measured at net asset value
18

 
 
 
 
 
 
Total pension plan assets
$
4,447

 
$
498

 
$
1,707

 
$
101
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 2016 and 2017 due to the following:
 
Real estate
 
Other
 
Total
Balance at December 31, 2015
$
7

 
$
86

 
$
93

Actual return on plan assets:
 
 
 
 
 
Gains (losses) relating to assets still held at year-end
—

 
(6
)
 
(6
)
Purchases, sales, settlements - net
(1
)
 
15

 
14

Transfers into or out of Level 3
—

 
—

 
—

Balance at December 31, 2016
6

 
95

 
101

Actual return on plan assets:
 
 
 
 
 
Gains (losses) relating to assets still held at year-end
1

 
(5
)
 
(4
)
Purchases, sales, settlements - net
12

 
(17
)
 
(5
)
Transfers into or out of Level 3
—

 
—

 
—

Balance at December 31, 2017
$
19

 
$
73

 
$
92
Fair value of other postretirement benefits plan assets
A summary of the fair value of other postretirement benefits plan assets at December 31, 2017 and 2016, follows:
 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2017
 
 
 
 
 
 
 
Cash equivalents
$
7

 
$
7

 
$
—

 
$
—

Common collective and other trusts measured at net asset value
48

 
 
 
 
 
 
Total other postretirement benefits plan assets
$
55

 
$
7

 
$
—

 
$
—




 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2016
 
 
 
 
 
 
 
Cash equivalents
$
8

 
$
8

 
$
—

 
$
—

Common collective and other trusts measured at net asset value
66

 
 
 
 
 
 
Total other postretirement benefits plan assets
$
74

 
$
8

 
$
—

 
$
—
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:
2017
$
114

2016
72

2015
137