10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2020

Commission file number 000-54863

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	D04 Y0C2
(Address of principal executive offices)				(Zip Code)

			+353	1637 2900
	(Registrant's telephone number, including area code)
	Not applicable
	(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class		Trading Symbol		Name of each exchange on which registered
Ordinary shares ($0.01 par value)		ETN		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐	(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 400.1 million Ordinary Shares outstanding as of June 30, 2020.

TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS	2
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
ITEM 4. CONTROLS AND PROCEDURES	38
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	38
ITEM 1A. RISK FACTORS	38
ITEM 6. EXHIBITS	39
SIGNATURES	40

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended June 30						Six months ended June 30
(In millions except for per share data)	2020			2019			2020			2019
Net sales	$	3,856		$	5,533		$	8,645		$	10,838
Cost of products sold	2,877			3,697			6,179			7,270
Selling and administrative expense	691			907			1,556			1,824
Research and development expense	126			151			279			307
Interest expense - net	38			50			72			110
Gain on sale of business	—			—			221			—
Other expense (income) - net	77			(10		)	112			(14		)
Income before income taxes	47			738			668			1,341
Income tax expense (benefit)	(7		)	102			176			183
Net income	54			636			492			1,158
Less net income for noncontrolling interests	(3		)	—			(3		)	—
Net income attributable to Eaton ordinary shareholders	$	51		$	636		$	489		$	1,158
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	0.13		$	1.50		$	1.20		$	2.73
Basic	0.13			1.51			1.21			2.74
Weighted-average number of ordinary shares outstanding
Diluted	401.3			423.1			406.2			424.5
Basic	400.4			421.6			404.8			422.8
Cash dividends declared per ordinary share	$	0.73		$	0.71		$	1.46		$	1.42

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

EATON CORPORATION plc

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended June 30						Six months ended June 30
(In millions)	2020			2019			2020			2019
Net income	$	54		$	636		$	492		$	1,158
Less net income for noncontrolling interests	(3		)	—			(3		)	—
Net income attributable to Eaton ordinary shareholders	51			636			489			1,158
Other comprehensive income (loss), net of tax
Currency translation and related hedging instruments	116			(36		)	(493		)	17
Pensions and other postretirement benefits	26			32			112			53
Cash flow hedges	15			(26		)	(138		)	(33		)
Other comprehensive income (loss) attributable to Eaton    ordinary shareholders	157			(30		)	(519		)	37
Total comprehensive income (loss) attributable to Eaton   ordinary shareholders	$	208		$	606		$	(30	)	$	1,195

The accompanying notes are an integral part of these condensed consolidated financial statements.

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EATON CORPORATION plc

CONSOLIDATED BALANCE SHEETS

(In millions)	June 30, 2020			December 31, 2019
Assets
Current assets
Cash	$	292		$	370
Short-term investments	204			221
Accounts receivable - net	2,647			3,437
Inventory	2,138			2,805
Assets held for sale	2,405			1,377
Prepaid expenses and other current assets	527			518
Total current assets	8,213			8,728
Property, plant and equipment
Land and buildings	2,112			2,440
Machinery and equipment	5,211			6,266
Gross property, plant and equipment	7,323			8,706
Accumulated depreciation	(4,419		)	(5,210		)
Net property, plant and equipment	2,904			3,496
Other noncurrent assets
Goodwill	12,497			13,456
Other intangible assets	4,241			4,638
Operating lease assets	419			436
Deferred income taxes	356			372
Other assets	1,718			1,679
Total assets	$	30,348		$	32,805
Liabilities and shareholders’ equity
Current liabilities
Short-term debt	$	139		$	255
Current portion of long-term debt	1,223			248
Accounts payable	1,620			2,114
Accrued compensation	254			449
Liabilities held for sale	432			325
Other current liabilities	1,821			1,741
Total current liabilities	5,489			5,132
Noncurrent liabilities
Long-term debt	6,906			7,819
Pension liabilities	1,324			1,462
Other postretirement benefits liabilities	322			328
Operating lease liabilities	320			331
Deferred income taxes	310			396
Other noncurrent liabilities	1,442			1,204
Total noncurrent liabilities	10,624			11,540
Shareholders’ equity
Ordinary shares (400.1 million outstanding in 2020 and 413.3 million in 2019)	4			4
Capital in excess of par value	12,228			12,200
Retained earnings	6,767			8,170
Accumulated other comprehensive loss	(4,809		)	(4,290		)
Shares held in trust	(2		)	(2		)
Total Eaton shareholders’ equity	14,188			16,082
Noncontrolling interests	47			51
Total equity	14,235			16,133
Total liabilities and equity	$	30,348		$	32,805

The accompanying notes are an integral part of these condensed consolidated financial statements.

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EATON CORPORATION plc

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended June 30
(In millions)	2020			2019
Operating activities
Net income	$	492		$	1,158
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization	397			442
Deferred income taxes	32			7
Pension and other postretirement benefits expense	109			75
Contributions to pension plans	(65		)	(62		)
Contributions to other postretirement benefits plans	(9		)	(6		)
Gain on sale of business	(91		)	—
Changes in working capital	95			(211		)
Other - net	120			28
Net cash provided by operating activities	1,080			1,431
Investing activities
Capital expenditures for property, plant and equipment	(202		)	(298		)
Proceeds from sale of business	1,408			—
Cash paid for acquisitions of businesses, net of cash acquired	(195		)	(243		)
Sales (purchases) of short-term investments - net	4			(221		)
Proceeds (payments) for settlement of currency exchange contracts not designated as hedges - net	(82		)	50
Other - net	(33		)	2
Net cash provided by (used in) investing activities	900			(710		)
Financing activities
Proceeds from borrowings	4			1,232
Payments on borrowings	(125		)	(757		)
Cash dividends paid	(592		)	(609		)
Exercise of employee stock options	17			25
Repurchase of shares	(1,300		)	(440		)
Employee taxes paid from shares withheld	(34		)	(44		)
Other - net	(4		)	(6		)
Net cash used in financing activities	(2,034		)	(599		)
Effect of currency on cash	(22		)	7
Less: Increase in cash classified as held for sale	(2		)	—
Increase (decrease) in cash	(78		)	129
Cash at the beginning of the period	370			283
Cash at the end of the period	$	292		$	412

The accompanying notes are an integral part of these condensed consolidated financial statements.

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EATON CORPORATION plc

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amounts are in millions unless indicated otherwise (per share data assume dilution).

Note 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods.

This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2019 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments. Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization. See Note 14 for additional information related to the segments.

The Company recorded $13 and $19 of net gains for the three and six months ended June 30, 2019, respectively, related primarily to the remeasurement of intercompany loans denominated in a foreign currency and the currency exchange derivative contracts used to hedge these exposures. In the first quarter of 2020, Eaton changed the presentation of these gains from Other (income) expense - net to Interest expense - net, and reclassified all prior periods.

In the first quarter of 2020, the Company also changed the presentation of the following items within the operating activities section of the Condensed Consolidated Statements of Cash Flows:

• The non-cash gains and losses associated with currency exchange derivative contracts have been moved from Changes in working capital to Other-net. This puts the non-cash impact of these derivatives on the same line as the non-cash impact from the balance sheet currency exposures they are used to hedge.

• The changes in uncertain tax positions have been moved from Other-net to Changes in working capital. This places the cash flow impact from all taxes on the same line.

These cash flow reclassifications of $122 for the six months ended June 30, 2019, have been made to prior period amounts with no change to total operating cash flow. 

Adoption of New Accounting Standard

Eaton adopted Accounting Standard Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in the first quarter of 2020. This standard introduces new guidance for accounting for credit losses on receivables. The Company did not recognize a cumulative-effect adjustment to retained earnings as of January 1, 2020, as the adoption of this standard did not have a material impact to the Condensed Consolidated Financial Statements.

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Note 2. ACQUISITIONS AND DIVESTITURES OF BUSINESSES

Acquisition of controlling interest of Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S.

On April 15, 2019, Eaton completed the acquisition of an 82.275% controlling interest in Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S. (Ulusoy Elektrik), a leading manufacturer of electrical switchgear based in Ankara, Turkey, with a primary focus on medium-voltage solutions for industrial and utility customers. Its sales for the 12 months ended September 30, 2018 were $126. The purchase price for the shares was $214 on a cash and debt free basis. As required by the Turkish capital markets legislation, Eaton filed an application to execute a mandatory tender offer for the remaining shares shortly after the transaction closed. During the tender offer, Eaton purchased additional shares for $33 to increase its ownership interest to 93.7%. Ulusoy Elektrik is reported within the Electrical Global business segment.

Acquisition of Innovative Switchgear Solutions, Inc.

On July 19, 2019, Eaton acquired Innovative Switchgear Solutions, Inc. (ISG), a specialty manufacturer of medium-voltage electrical equipment serving the North American utility, commercial and industrial markets. Its 2018 sales were approximately $18. ISG is reported within the Electrical Americas business segment.

Acquisition of Souriau-Sunbank Connection Technologies

On December 20, 2019, Eaton acquired the Souriau-Sunbank Connection Technologies (Souriau-Sunbank) business of TransDigm Group Inc. for a cash purchase price of $906, net of cash received. Headquartered in Versailles, France, Souriau-Sunbank is a global leader in highly engineered electrical interconnect solutions for harsh environments in the aerospace, defense, industrial, energy, and transport markets. Its sales for the 12 months ended June 30, 2019 were $363. Souriau-Sunbank is reported within the Aerospace business segment.

The acquisition of Souriau-Sunbank has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. There has not been a material change from the initial estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, and these differences could have a material impact on Eaton's preliminary purchase price allocation.

Eaton’s 2020 Condensed Consolidated Financial Statements include Souriau-Sunbank’s results of operations. Souriau-Sunbank’s sales for the first six months of 2020 were $138.

Sale of Automotive Fluid Conveyance business

On December 31, 2019, Eaton sold its Automotive Fluid Conveyance Business. The transaction resulted in a pre-tax loss of$66 which was recorded in Other expense (income) - net. This business was reported within the Vehicle business segment.

Acquisition of Power Distribution, Inc.

On February 25, 2020, Eaton acquired Power Distribution, Inc. a leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. The company is headquartered in Richmond, Virginia, and had 2019 sales of $125. Power Distribution, Inc. is reported within the Electrical Americas business segment.

Sale of Lighting business

On March 2, 2020, Eaton sold its Lighting business to Signify N.V. for a cash purchase price of $1.4 billion. The Company recognized a pre-tax gain of $221. The Lighting business, which had sales of $1.6 billion in 2019 as part of the Electrical Americas business segment, serves customers in commercial, industrial, residential, and municipal markets.

Pending sale of Hydraulics business

On January 21, 2020, Eaton entered into an agreement to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3 billion in cash. Eaton’s Hydraulics business is a global leader in hydraulics components, systems, and services for industrial and mobile equipment. The business had sales of $2.2 billion in 2019. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the first quarter of 2021.

7

Assets and liabilities held for sale

During the fourth quarter of 2019 and first quarter of 2020, the Company determined the Lighting business and Hydraulics business, respectively, met the criteria to be classified as held for sale. Therefore, assets and liabilities of these businesses have been presented as held for sale in the Consolidated Balance Sheets as of December 31, 2019 and June 30, 2020, respectively. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. There was no write-down as fair values of both the Lighting business and Hydraulics business assets less their costs to sell exceeded their respective carrying values. Depreciation and amortization expense is not recorded for the period in which Other long-lived assets are classified as held for sale.

The Company used the relative fair value method to allocate goodwill to both the Lighting and Hydraulics businesses. The fair values of the Lighting business and Hydraulics business were estimated based on a combination of the prices paid to Eaton by Signify N.V. and Danfoss A/S, respectively, and a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions.

The assets and liabilities classified as held for sale for the Lighting business on the December 31, 2019 Consolidated Balance Sheet and the Hydraulics business on the June 30, 2020 Consolidated Balance Sheet are as follows:

	June 30, 2020		December 31, 2019
	(Hydraulics business)		(Lighting business)
Cash	$	2	$	—
Accounts receivable - net	325		220
Inventory	382		161
Prepaid expenses and other current assets	12		10
Net property, plant and equipment	462		155
Goodwill	907		470
Other intangible assets	248		330
Operating lease assets	48		25
Deferred income taxes	5		—
Other noncurrent assets	14		6
Assets held for sale - current	$	2,405	$	1,377
Accounts payable	$	198	$	184
Accrued compensation	22		7
Other current liabilities	108		102
Pension liabilities	72		3
Operating lease liabilities	28		17
Deferred income taxes	4		(1		)
Other noncurrent liabilities	—		13
Liabilities held for sale - current	$	432	$	325

The Lighting business and Hydraulics business did not meet the criteria to be classified as discontinued operations as neither of these sales represent a strategic shift that will have a major effect on the Company's operations.

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Note 3. REVENUE RECOGNITION

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.

In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time.

In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time.

Many of the products and services in power distribution and power quality services meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

In the Hydraulics segment, sales contracts are primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time when we ship the product from our facility.

In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer.

In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility.

In the eMobility segment, sales contracts are primarily for electronic and mechanical components and systems that improves the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility.

In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period.

9

The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market.

	Three months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	439	$	1,051	$	1,490
Electrical Global			598		513		1,111
			United States		Rest of World
Hydraulics			$	183	$	228	411
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	199	$	149	$	113	461
			Commercial		Passenger and Light Duty
Vehicle			$	166	$	161	327
eMobility							56
Total							$	3,856

	Three months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	948	$	1,137	$	2,085
Electrical Global			715		609		1,324
			United States		Rest of World
Hydraulics			$	273	330		603
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	302	$	214	$	118	634
			Commercial		Passenger and Light Duty
Vehicle			$	425	$	378	803
eMobility							84
Total							$	5,533

10

	Six months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	1,163	$	2,115	$	3,278
Electrical Global			1,255		1,000		2,255
			United States		Rest of World
Hydraulics			$	410	$	508	918
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	524	$	369	$	248	1,141
			Commercial		Passenger and Light Duty
Vehicle			$	458	$	467	925
eMobility							128
Total							$	8,645

	Six months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	1,854	$	2,192	$	4,046
Electrical Global			1,411		1,155		2,566
			United States		Rest of World
Hydraulics			$	539	$	669	1,208
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	592	$	425	$	221	1,238
			Commercial		Passenger and Light Duty
Vehicle			$	856	$	757	1,613
eMobility							167
Total							$	10,838

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The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivables from customers were $2,329 and $3,090 at June 30, 2020 and December 31, 2019, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were $106 and $101 at June 30, 2020 and December 31, 2019, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables was primarily due to revenue recognized and not yet billed, partially offset by billings to customers during the quarter.

Changes in the deferred revenue liabilities are as follows:

	Deferred Revenue
Balance at January 1, 2020	$	234
Customer deposits and billings	464
Revenue recognized in the period	(459		)
Translation	(1		)
Deferred revenue reclassified to held for sale	(11		)
Balance at June 30, 2020	$	227

	Deferred Revenue
Balance at January 1, 2019	$	248
Customer deposits and billings	440
Revenue recognized in the period	(440		)
Translation	5
Balance at June 30, 2019	$	253

A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at June 30, 2020 was approximately $5.3 billion. At June 30, 2020, Eaton expects to recognize approximately 87% of this backlog in the next twelve months and the rest thereafter.

Note 4. CREDIT LOSSES FOR RECEIVABLES

Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 days.

Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-offs based on historic experience adjusted for market conditions. The Company’s segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made.

Accounts receivable are net of an allowance for credit losses of $46 and $49 at June 30, 2020 and December 31, 2019. The change in the allowance for credit losses includes expense and net write-offs, none of which is significant.

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Note 5.    INVENTORY

Inventory is carried at lower of cost or net realizable value. The components of inventory follow:

	June 30, 2020		December 31, 2019
Raw materials	$	774	$	986
Work-in-process	522		640
Finished goods	842		1,179
Total inventory	$	2,138	$	2,805

Note 6. GOODWILL

Change in the carrying amount of goodwill by segment follows:

	January 1, 2020		Additions		Goodwill reclassified to held for sale			Translation			June 30, 2020
Electrical Americas	$	6,352	$	110	$	—		$	(29	)	$	6,433
Electrical Global	4,106		7		—			(116		)	3,997
Hydraulics	921		—		(907		)	(14		)	—
Aerospace	1,706		2		—			(10		)	1,698
Vehicle	291		—		—			(2		)	289
eMobility	80		—		—			—			80
Total	$	13,456	$	119	$	(907	)	$	(171	)	$	12,497

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The Company used the relative fair value method to reallocate goodwill to the associated reporting units impacted by the reorganization. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units.

The fair values of the Electrical Americas and Electrical Global reportable segments were estimated based on a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions.

The fair value of the Hydraulics reportable segment was estimated based on a combination of the price to be paid to Eaton by Danfoss A/S and a discounted cash flow model. See Note 2 for additional information about the allocation of goodwill to the Hydraulics reportable segment.

The Filtration and Golf Grip businesses previously included in the Hydraulics reportable segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace segment as part of the reorganization.

During the first quarter of 2020, goodwill impairment testing was performed using quantitative analyses as a result of the Hydraulics business being classified as held for sale as discussed in Note 2, and the re-segmentation of the Electrical Americas, Electrical Global and Aerospace segments. Based on these analyses performed, the fair value of Eaton's impacted reporting units continues to substantially exceed their respective carrying amounts and thus, no impairment exists.

The 2020 additions to goodwill relate to the anticipated synergies of acquiring Power Distribution, Inc. The allocation of the purchase price from this acquisition is preliminary and will be completed during the measurement period.

13

Note 7.    RETIREMENT BENEFITS PLANS

The components of retirement benefits expense follow:

	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Three months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	24		$	23		$	18		$	15		$	1		$	1
Interest cost	26			34			11			14			2			4
Expected return on plan assets	(58		)	(59		)	(27		)	(27		)	—			(1		)
Amortization	26			16			14			9			(3		)	(4		)
	18			14			16			11			—			—
Settlements and special termination benefits	18			13			3			1			—			—
Total expense	$	36		$	27		$	19		$	12		$	—		$	—
	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Six months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	48		$	46		$	36		$	29		$	1		$	1
Interest cost	52			68			22			29			4			7
Expected return on plan assets	(115		)	(117		)	(54		)	(54		)	—			(1		)
Amortization	51			31			29			19			(6		)	(7		)
	36			28			33			23			(1		)	—
Settlements, curtailments and special termination benefits	35			23			6			1			—			—
Total expense	$	71		$	51		$	39		$	24		$	(1	)	$	—

The components of retirement benefits expense other than service costs are included in Other expense (income) - net.

Note 8. 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. Insurance may cover some of the costs associated with these claims and proceedings. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes they will not have a material adverse effect on the consolidated financial statements.

Note 9. INCOME TAXES

The effective income tax rate for the second quarter of 2020 was a tax benefit of 15.1% compared to tax expense of 13.9% for the second quarter of 2019. The credit tax rate in the second quarter of 2020 was primarily due to the tax impact from the restructuring charges described in Note 13. The effective income tax rate for the first six months of 2020 was expense of 26.4% compared to expense of 13.7% for the first six months of 2019. The increase in the effective tax rate in the first six months of 2020 was primarily due to the tax impact on the gain from the sale of the Lighting business described in Note 2.

14

Note 10. EQUITY

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5,000 of ordinary shares (2019 Program). Under the 2019 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three months ended June 30, 2020, no ordinary shares were repurchased. During the six months ended June 30, 2020, 14.2 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $1,300. During the three and six months ended June 30, 2019, 3.2 million and 5.1 million ordinary shares, respectively, were repurchased under the 2019 Program in the open market at a total cost of $260 and $410, respectively.

The changes in Shareholders’ equity follow:

	Ordinary shares				Capital in excess of par value		Retained earnings			Accumulated other comprehensive loss			Shares held in trust			Total Eaton shareholders' equity			Noncontrolling interests			Total equity
(In millions)	Shares		Dollars
Balance at January 1, 2020	413.3		$	4	$	12,200	$	8,170		$	(4,290	)	$	(2	)	$	16,082		$	51		$	16,133
Net income	—		—		—		438			—			—			438			—			438
Other comprehensive loss, net of tax										(676		)				(676		)	—			(676		)
Cash dividends paid and accrued	—		—		—		(300		)	—			—			(300		)	(5		)	(305		)
Issuance of shares under equity-based compensation plans	0.9		—		3		(1		)	—			(1		)	1			—			1
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			(3		)	(3		)
Repurchase of shares	(14.2	)	—		—		(1,300		)	—			—			(1,300		)	—			(1,300		)
Balance at March 31, 2020	400.0		$	4	$	12,203	$	7,007		$	(4,966	)	$	(3	)	$	14,245		$	43		$	14,288
Net income	—		—		—		51			—			—			51			3			54
Other comprehensive income, net of tax										157						157						157
Cash dividends paid	—		—		—		(292		)	—			—			(292		)	(1		)	(293		)
Issuance of shares under equity-based compensation plans	0.1		—		25		1			—			1			27			—			27
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			2			2
Balance at June 30, 2020	400.1		$	4	$	12,228	$	6,767		$	(4,809	)	$	(2	)	$	14,188		$	47		$	14,235

	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, 2019	423.6		$	4	$	12,090		$	8,161		$	(4,145	)	$	(3	)	$	16,107		$	35		$	16,142
Net income	—		—		—			522			—			—			522			—			522
Other comprehensive income, net of tax											67						67			—			67
Cash dividends paid and accrued	—		—		—			(309		)	—			—			(309		)	(1		)	(310		)
Issuance of shares under equity-based compensation plans	1.4		—		(5		)	1			—			—			(4		)	—			(4		)
Repurchase of shares	(1.9	)	—		—			(150		)	—			—			(150		)	—			(150		)
Balance at March 31, 2019	423.1		$	4	$	12,085		$	8,225		$	(4,078	)	$	(3	)	$	16,233		$	34		$	16,267
Net income	—		—		—			636			—			—			636			—			636
Other comprehensive loss, net of tax	—										(30		)				(30		)				(30		)
Cash dividends paid	—		—		—			(300		)	—			—			(300		)	(1		)	(301		)
Issuance of shares under equity-based compensation plans	0.1		—		27			(1		)	—			1			27			—			27
Acquisition of a business	—		—		—			—			—			—			—			51			51
Acquisition of noncontrolling interest obtained through tender offer	—		—		—			—			—			—			—			(29		)	(29		)
Repurchase of Shares	(3.2	)	—		—			(260		)	—			—			(260		)	—			(260		)
Balance at June 30, 2019	420.0		$	4	$	12,112		$	8,300		$	(4,108	)	$	(2	)	$	16,306		$	55		$	16,361

15

The changes in Accumulated other comprehensive loss follow:

	Currency translation and related hedging instruments			Pensions and other postretirement benefits			Cash flow hedges			Total
Balance at January 1, 2020	$	(2,848	)	$	(1,408	)	$	(34	)	$	(4,290	)
Other comprehensive (loss) income    before reclassifications	(530		)	23			(143		)	(650		)
Amounts reclassified from Accumulated other    comprehensive loss	37			89			5			131
Net current-period Other comprehensive    (loss) income	(493		)	112			(138		)	(519		)
Balance at June 30, 2020	$	(3,341	)	$	(1,296	)	$	(172	)	$	(4,809	)

The reclassifications out of Accumulated other comprehensive loss follow:

	Six months ended June 30, 2020				Consolidated statements of income classification
Currency translation losses
Sale of business	$	(37	)		Gain on sale of business
Tax expense	—
Total, net of tax	(37		)
Amortization of defined benefit pensions and other postretirement benefits items
Actuarial loss and prior service cost	(115		)	1
Tax benefit	26
Total, net of tax	(89		)
Gains and (losses) on cash flow hedges
Currency exchange contracts	(6		)		Net sales and Cost of products sold
Tax benefit	1
Total, net of tax	(5		)
Total reclassifications for the period	$	(131	)

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 pension and other postretirement benefits items.

Net Income Per Share Attributable to Eaton Ordinary Shareholders

A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:

	Three months ended June 30				Six months ended June 30
(Shares in millions)	2020		2019		2020		2019
Net income attributable to Eaton ordinary shareholders	$	51	$	636	$	489	$	1,158
Weighted-average number of ordinary shares outstanding - diluted	401.3		423.1		406.2		424.5
Less dilutive effect of equity-based compensation	0.9		1.5		1.4		1.7
Weighted-average number of ordinary shares outstanding - basic	400.4		421.6		404.8		422.8
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	0.13	$	1.50	$	1.20	$	2.73
Basic	0.13		1.51		1.21		2.74

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For the second quarter and first six months of 2020, 1.7 million and 1.0 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. For the second quarter and first six months of 2019, 0.8 million and 1.2 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.

Note 11. 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:

	Total			Level 1		Level 2			Level 3
June 30, 2020
Cash	$	292		$	292	$	—		$	—
Short-term investments	204			204		—			—
Net derivative contracts	(75		)	—		(75		)	—
December 31, 2019
Cash	$	370		$	370	$	—		$	—
Short-term investments	221			221		—			—
Net derivative contracts	53			—		53			—

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 $8,129 and fair value of $8,944 at June 30, 2020 compared to $8,067 and $8,638, respectively, at December 31, 2019. The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities, and are considered a Level 2 fair value measurement.

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Note 12. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and, commodity contracts to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes.

Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated, and is effective, as part of a hedging relationship and, if so, as to the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as:

• Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in income during the period of change in fair value.

• Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such an asset or liability (a cash flow hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss on the hedged item is included in income.

• Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss related to the net investment in the foreign operation is included in income.

The gain or loss from a derivative financial instrument designated as a hedge is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these financial instruments are classified in operating activities on the Condensed Consolidated Statements of Cash Flows.

For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain commodity contracts that arise in the normal course of business.

Eaton uses certain of its debt denominated in foreign currency to hedge portions of its net investments in foreign operations against foreign currency exposure (net investment hedges). Foreign currency denominated debt designated as a non-derivative net investment hedging instrument had a carrying value on an after-tax basis of $1,842 at June 30, 2020 and $1,845 at December 31, 2019.

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Derivative Financial Statement Impacts

The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows:

	Notional amount		Other  current assets		Other noncurrent assets		Other current liabilities		Other noncurrent liabilities		Type of hedge	Term
June 30, 2020
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	5	$	121	$	—	$	—	Fair value	6 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	850		—		3		—		178		Cash flow	33 years
Currency exchange contracts	1,031		9		1		37		12		Cash flow	1 to 36 months
Commodity contracts	13		1		—		—		—		Cash flow	1 to 10 months
Total			$	15	$	125	$	37	$	190
Derivatives not designated as  hedges
Currency exchange contracts	$	4,354	$	30			$	19				1 to 12 months
Commodity contracts	7		1				—					1 month
Total			$	31			$	19
December 31, 2019
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	—	$	57	$	—	$	—	Fair value	12 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	500		—		3		—		42		Cash flow	13 to 33 years
Currency exchange contracts	1,146		14		3		11		6		Cash flow	1 to 36 months
Commodity contracts	9		—		—		—		—		Cash flow	1 to 9 months
Total			$	14	$	63	$	11	$	48
Derivatives not designated as  hedges
Currency exchange contracts	$	4,975	$	48			$	13				1 to 12 months
Commodity contracts	3		—				—					1 month
Total			$	48			$	13

The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its operations. This activity represents the great majority of these currency exchange contracts.

19

As of June 30, 2020, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:

Commodity	June 30, 2020		Term
Copper	5	millions of pounds	1 to 10 months
Gold	622	Troy ounces	1 to 3 months

The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:

	Carrying amount of the hedged assets (liabilities)						Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a)
Location on Consolidated Balance Sheets	June 30, 2020			December 31, 2019			June 30, 2020			December 31, 2019
Long-term debt	$	(2,838	)	$	(2,838	)	$	(164	)	$	(97	)

^(a) At June 30, 2020 and December 31, 2019, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $38 and $40, respectively.

The impact of hedging activities to the Consolidated Statements of Income are as follow:

	Three months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	3,856		$	2,877		$	38
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	4		$	—
Derivative designated as hedging instrument	(5		)	(4		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(1	)
Derivative designated as hedging instrument	—			—			1

20

	Three months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	5,533		$	3,697		$	50
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	2		$	(4	)	$	—
Derivative designated as hedging instrument	(2		)	4			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(40	)
Derivative designated as hedging instrument	—			—			40

	Six months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	8,645		$	6,179		$	72
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	1		$	—
Derivative designated as hedging instrument	(5		)	(1		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(69	)
Derivative designated as hedging instrument	—			—			69

21

	Six months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	10,838		$	7,270		$	110
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	(9	)	$	—
Derivative designated as hedging instrument	(5		)	9			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(63	)
Derivative designated as hedging instrument	—			—			63

The impact of derivatives not designated as hedges to the Consolidated Statements of Income are as follow:

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Three months ended June 30
	2020		2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	46	$	8		Interest expense - net
Commodity Contracts	1		(1		)	Cost of products sold
Total	$	47	$	7

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Six months ended June 30
	2020			2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	(103	)	$	48	Interest expense - net
Commodity Contracts	1			—		Cost of products sold
Total	$	(102	)	$	48

22

The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income follow:

	Gain (loss) recognized in other comprehensive (loss) income						Location of gain (loss) reclassified from Accumulated other comprehensive loss	Gain (loss) reclassified from Accumulated other comprehensive loss
	Three months ended June 30							Three months ended June 30
	2020			2019				2020			2019
Derivatives designated as    cash flow hedges
Forward starting floating-to-fixed  interest rate swaps	$	11		$	(18	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(3		)	(10		)	Net sales and Cost of products sold	(9		)	2
Commodity contracts	3			(2		)	Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	(38		)	—			Interest expense - net	—			—
Total	$	(27	)	$	(30	)		$	(9	)	$	2
	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
	Six months ended June 30							Six months ended June 30
	2020			2019				2020			2019
Derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps	$	(136	)	$	(27	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(45		)	(10		)	Net sales and Cost of products sold	(6		)	4
Commodity contracts	1			—			Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	5			12			Interest expense - net	—			—
Total	$	(175	)	$	(25	)		$	(6	)	$	4

At June 30, 2020, a loss of $27 of estimated unrealized net gains or losses associated with our cash flow hedges were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next 12 months.

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Note 13. RESTRUCTURING CHARGES

Eaton has decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions. Restructuring charges incurred under this program were $187 in the second quarter of 2020. These restructuring activities are expected to incur additional expenses of $33 in the second half of 2020, $55 in 2021, and $5 in 2022, primarily comprised of plant closing costs, resulting in total estimated charges of $280 for the entire program.

A summary of restructuring program charges by type follows:

	Three months ended June 30, 2020
Workforce reductions	$	166
Plant closing and other	21
Total	$	187

Restructuring program charges related to the following segments:

	Three months ended June 30, 2020
Electrical Americas	$	13
Electrical Global	51
Aerospace	30
Vehicle	90
eMobility	1
Corporate	2
Total	$	187

A summary of liabilities related to workforce reductions, plant closing and other associated costs follows:

	Workforce reductions			Plant closing and other			Total
Balance at December 31, 2019	$	—		$	—		$	—
Liability recognized	166			21			187
Payments, utilization and translation	(9		)	(21		)	(30		)
Balance at June 30, 2020	$	157		$	—		$	157

These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) - net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 14 for additional information about business segments.

Note 14. BUSINESS SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments. Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization. The Company also changed how it measures business segment performance in 2020 as it no longer allocates acquisition and divestiture charges to its operating segments. Historical segment information has been retrospectively adjusted to reflect these changes.

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Electrical Americas and Electrical Global

The Electrical Americas segment consists of electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The Electrical Global segment consists of electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America; as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The principal markets for these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share certain common global customers, but a large majority of the customers are located regionally. Sales are made through distributors, resellers, and manufacturers' representatives, as well as directly to original equipment manufacturers, utilities, and certain other end users.

Hydraulics

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; and industrial drum and disc brakes. The principal markets for the Hydraulics segment include renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, and power generation. Key manufacturing customers in these markets and other customers 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, as well as filtration systems for industrial applications. Products include hydraulic power generation systems for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, couplings, sealing and ducting; fuel systems including fuel pumps, sensors, valves, adapters and regulators; high performance interconnect products including wiring connectors and cables. The Aerospace segment also includes filtration systems including hydraulic filters, bag filters, strainers and cartridges; and golf grips. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers, as well as industrial applications. These manufacturers and other customers operate globally. Products are sold and serviced through a variety of channels.

Vehicle

The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks and commercial vehicles. Products include transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, and fuel vapor components for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars and agricultural equipment.

eMobility

The eMobility segment designs, manufactures, markets, and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. Products include high voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution, fuel tank isolation valves, and commercial vehicle hybrid systems. The principle markets for the eMobility segment are original equipment manufacturers and aftermarket customers of passenger cars, commercial vehicles, and construction, agriculture, and mining equipment.

Other information

The accounting policies of the business segments are generally the same as the policies described in Note 1 to the Consolidated Financial Statements contained in the 2019 Form 10-K, except that operating profit only reflects the service cost component and the cost of any special termination benefits 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.

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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 all of the Company’s costs associated with acquisitions, divestitures, and gains and losses on the sale of certain businesses, restructuring program costs (Note 13) 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 certain cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets.

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019
Net sales
Electrical Americas	$	1,490		$	2,085		$	3,278		$	4,046
Electrical Global	1,111			1,324			2,255			2,566
Hydraulics	411			603			918			1,208
Aerospace	461			634			1,141			1,238
Vehicle	327			803			925			1,613
eMobility	56			84			128			167
Total net sales	$	3,856		$	5,533		$	8,645		$	10,838
Segment operating profit (loss)
Electrical Americas	$	308		$	404		$	616		$	738
Electrical Global	178			233			344			423
Hydraulics	37			53			92			112
Aerospace	68			155			215			292
Vehicle	(21		)	136			60			258
eMobility	(2		)	7			(1		)	12
Total segment operating profit	568			988			1,326			1,835
Corporate
Amortization of intangible assets	(88		)	(94		)	(175		)	(187		)
Interest expense - net	(38		)	(50		)	(72		)	(110		)
Pension and other postretirement benefits expense	(12		)	(2		)	(20		)	(2		)
Restructuring program charges	(187		)	—			(187		)	—
Other expense - net	(196		)	(104		)	(204		)	(195		)
Income before income taxes	47			738			668			1,341
Income tax expense (benefit)	(7		)	102			176			183
Net income	54			636			492			1,158
Less net income for noncontrolling interests	(3		)	—			(3		)	—
Net income attributable to Eaton ordinary shareholders	$	51		$	636		$	489		$	1,158

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Amounts are in millions of dollars or shares unless indicated otherwise (per share data assume dilution).

COMPANY OVERVIEW

Eaton Corporation plc (Eaton or the Company) is a power management company with 2019 net sales of $21.4 billion. Eaton's mission is to improve the quality of life and environment through the use of power management technologies and services. We provide sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power - more safely, more efficiently and more reliably. Eaton has approximately 93,000 employees in 61 countries and sells products to customers in more than 175 countries.

Summary of Results of Operations

A summary of Eaton’s Net sales, Net income attributable to Eaton ordinary shareholders, and Net income per share attributable to Eaton ordinary shareholders - diluted follows:

	Three months ended June 30				Six months ended June 30
	2020		2019		2020		2019
Net sales	$	3,856	$	5,533	$	8,645	$	10,838
Net income attributable to Eaton ordinary shareholders	51		636		489		1,158
Net income per share attributable to Eaton ordinary shareholders - diluted	$	0.13	$	1.50	$	1.20	$	2.73

Eaton has decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions. Restructuring charges incurred under this program were $187 in the second quarter of 2020. These restructuring activities are expected to incur additional expenses of $33 in the second half of 2020, $55 in 2021, and $5 in 2022, primarily comprised of plant closing costs, resulting in total estimated charges of $280 for the entire program. The projected mature year savings from these restructuring actions are expected to be $200 when fully implemented in 2023. Additional information related to this restructuring is presented in Note 13.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments. Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization. The Company also changed how it measures business segment performance in 2020 as it no longer allocates acquisition and divestiture charges to its operating segments. Previously reported financial information for these reportable segments has been updated for 2019 in Note 14. The re-segmentation did not impact previously reported consolidated results of operations.

On February 25, 2020, Eaton acquired Power Distribution, Inc. a leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. The company is headquartered in Richmond, Virginia, and had 2019 sales of $125. Power Distribution, Inc. is reported within the Electrical Americas business segment.

On March 2, 2020, Eaton sold its Lighting business to Signify N.V. for a cash purchase price of $1.4 billion. The Company recognized a pre-tax gain of $221. The Lighting business, which had sales of $1.6 billion in 2019 as part of the Electrical Americas business segment, serves customers in commercial, industrial, residential and municipal markets.

On January 21, 2020, Eaton entered into an agreement to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3 billion in cash. Eaton’s Hydraulics business is a global leader in hydraulics components, systems, and services for industrial and mobile equipment. The business had sales of $2.2 billion in 2019. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the first quarter of 2021.

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During the fourth quarter of 2019 and first quarter of 2020, the Company determined the Lighting business and Hydraulics business, respectively, met the criteria to be classified as held for sale. Therefore, assets and liabilities of these businesses have been presented as held for sale in the Consolidated Balance Sheets as of December 31, 2019 and June 30, 2020, respectively. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. There was no write-down as fair values of both the Lighting business and Hydraulics business assets less their costs to sell exceeded their respective carrying values. Depreciation and amortization expense is not recorded for the period in which Other long-lived assets are classified as held for sale.

COVID-19

The Company continues to be impacted by the COVID-19 pandemic in the second quarter of 2020 seeing dramatic declines in several end markets. Organic sales were down 22% for the second quarter primarily due to the impact from the COVID-19 pandemic. The Company continues to monitor the pandemic’s impact throughout the world, including guidance from governmental authorities and world health organizations. Our businesses are focused on cost control to offset the volume declines. During the second quarter, the Company implemented the following actions:

• Reduction of senior executive base salaries in the second quarter

• 50% reduction in cash retainer for non-employee members of the Board of Directors in the second quarter

• Implementation of unpaid leave programs

• Eliminated merit increases for all of 2020

• Reduction of discretionary expenses and implementation of travel and hiring freezes

• Elimination of nonessential capital spending

We anticipate that several of our markets will take some time to recover, and so we have decided to implement a multi-year restructuring program discussed in Note 13 to deal with that weakness. The principal end markets affected are commercial aerospace, oil and gas, NAFTA Class 8 trucks, and North American/European light vehicles.

Eaton's products and support services are vital to hospitals, emergency services, military sites, utilities, public works, transportation and shipping providers. In addition, data centers, retail outlets, airports and governments, as well as the networks that support schools and remote workers, rely on the Company's products to serve their customers and communities. As a result, the Company's businesses are deemed essential to continue operating by almost all governments around the world, and all of the Company's plants are currently operating.

The Company is doing the following to protect the safety and health of its workforce, as well as support customer's needs during this pandemic:

Protect our employees

• Trained our sites around the world in cleaning and disinfecting protocols

• Enacted social distancing procedures, staggered shifts, implemented a rotating office work schedule, and modified workspace and meeting space layouts

• Requiring employees to stay at home if they are feeling ill, and encouraging increased hand washing and hygiene practices across all sites

• Advised employees to take advantage of flexible work options

• Restricting visitors to all sites

• Consulting regularly with doctors and health care organizations

• Updating the Company's response plans as new information becomes available

In the event an employee suspects they have been exposed to COVID-19, or testing confirms it, sites will implement a response plan that includes:

•Mandatory quarantines

• Communication with all who may have been exposed

• Disinfecting work stations and common areas

• Shutting down the facility if warranted

These actions are aligned with our preventive health protocols and those of governmental authorities and health organizations including the Centers for Disease Control (U.S.) and the World Health Organization.

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Support our customers

Eaton has activated its business continuity management plans across the organization, which includes:

• Staying in close contact with our suppliers to manage the supply chain

• Equipping our service technicians with additional personal protective equipment as needed

• Coordinating with local, state and national governments

• Following governmental and health authorities' guidelines

RESULTS OF OPERATIONS

Non-GAAP Financial Measures

The following discussion of Consolidated Financial Results includes certain non-GAAP financial measures. These financial measures include adjusted earnings and adjusted earnings per ordinary share, each of which differs from the most directly comparable measure calculated in accordance with generally accepted accounting principles (GAAP). A reconciliation of adjusted earnings and adjusted earnings per ordinary share to the most directly comparable GAAP measure is included in the table below, and excludes acquisition and divestiture expense related primarily to the planned divestiture of the Hydraulics business, the divestiture of the Lighting business, the acquisitions of Souriau-Sunbank and Ulusoy Elektrik, and other charges to exit businesses, and restructuring program expense discussed in Note 13. Management believes that these financial measures are useful to investors because they exclude certain transactions, allowing investors to more easily compare Eaton’s financial performance period to period. Management uses this information in monitoring and evaluating the on-going performance of Eaton.

Acquisition and Divestiture Charges

Eaton incurs integration charges and transaction costs to acquired businesses, and transaction costs and other charges to divest and exit businesses. Eaton also recognizes gains and losses on the sale of businesses. A summary of these Corporate items follows:

	Three months ended June 30					Six months ended June 30
	2020			2019		2020			2019
Acquisition integration, divestiture charges and transaction costs	$	103		$	14	$	235		$	26
Gain on the sale of the Lighting business	—			—		(221		)	—
Total before income taxes	103			14		14			26
Income tax expense (benefit)	(23		)	—		75			(1		)
Total after income taxes	$	80		$	14	$	89		$	25
Per ordinary share - diluted	$	0.20		$	0.03	$	0.22		$	0.06

Acquisition integration, divestiture charges and transaction costs in 2020 are primarily related to the planned divestiture of the Hydraulics business, the divestiture of the Lighting business, the acquisitions of Souriau-Sunbank and Ulusoy Elektrik, and other charges to exit businesses, and were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) - net. Charges in 2019 related to the divestiture of the Lighting business and the acquisition of Ulusoy Elektrik, and were included in Selling and administrative expense. In Business Segment Information in Note 14, these charges were included in Other expense - net.

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Consolidated Financial Results

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	3,856		$	5,533		(30	)%	$	8,645		$	10,838		(20	)%
Gross profit	979			1,836			(47	)%	2,466			3,568			(31	)%
Percent of net sales	25.4		%	33.2		%			28.5		%	32.9		%
Income before income taxes	47			738			(94	)%	668			1,341			(50	)%
Net income	54			636			(92	)%	492			1,158			(58	)%
Less net income for noncontrolling interests	(3		)	—					(3		)	—
Net income attributable to Eaton ordinary shareholders	51			636			(92	)%	489			1,158			(58	)%
Excluding acquisition and divestiture charges, after-tax	80			14					89			25
Excluding restructuring program charges, after-tax	148			—					148			—
Adjusted earnings	$	279		$	650		(57	)%	$	726		$	1,183		(39	)%
Net income per share attributable to Eaton ordinary shareholders - diluted	$	0.13		$	1.50		(91	)%	$	1.20		$	2.73		(56	)%
Excluding per share impact of acquisition and divestiture charges, after-tax	0.20			0.03					0.22			0.06
Excluding per share impact of restructuring program charges, after-tax	0.37			—					0.37			—
Adjusted earnings per ordinary share	$	0.70		$	1.53		(54	)%	$	1.79		$	2.79		(36	)%

Net Sales

Net sales decreased 30% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 22% in organic sales, a decrease of 8% from divestitures of businesses, and a decrease of 2% from the impact of negative currency translation, partially offset by an increase of 2% from acquisitions of businesses. Net sales decreased 20% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 15% in organic sales, a decrease of 6% from divestitures of businesses, and a decrease of 1% from the impact of negative currency translation, partially offset by an increase of 2% from acquisitions of businesses. The decrease in organic sales in the second quarter and first six months of 2020 was primarily due to the impact from the COVID-19 pandemic, as well as lower sales volumes in all business segments.

Gross Profit

Gross profit margin decreased from 33.2% in the second quarter of 2019 to 25.4% in the second quarter of 2020, and from 32.9% in first six months of 2019 to 28.5% in first six months of 2020. The decrease in gross profit margin in the second quarter and first six months of 2020 was primarily due to lower sales volumes from the impact of the COVID-19 pandemic.

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Income Taxes

The effective income tax rate for the second quarter of 2020 was a tax benefit of 15.1% compared to tax expense of 13.9% for the second quarter of 2019. The credit effective tax rate in the second quarter of 2020 was primarily due to the tax impact from the restructuring charges described in Note 13. The effective income tax rate for the first six months of 2020 was expense of 26.4% compared to expense of 13.7% for the first six months of 2019. The increase in the effective tax rate in the first six months of 2020 was primarily due to the tax impact on the gain from the sale of the Lighting business described in Note 2.

Net Income

Net income attributable to Eaton ordinary shareholders of $51 in the second quarter of 2020 decreased 92% compared to Net income attributable to Eaton ordinary shareholders of $636 in the second quarter of 2019. Net income attributable to Eaton ordinary shareholders of $489 in the first six months of 2020 decreased 58% compared to Net income attributable to Eaton ordinary shareholders of $1,158 in the first six months of 2019. Net income in the first six months of 2020 included an after-tax gain of $91 on the sale of the Lighting business discussed in Note 2. The decrease in the second quarter and first six months of 2020 was primarily due lower sales volumes from the impact of the COVID-19 pandemic.

Net income per ordinary share decreased to $0.13 in the second quarter of 2020 compared to $1.50 in the second quarter of 2019. Net income per ordinary share decreased to $1.20 in the first six months of 2020 compared to $2.73 in the first six months of 2019. Net income per ordinary share in the first six months of 2020 included $0.22 from the sale of the Lighting business. The decrease in Net income per ordinary share in the second quarter and first six months of 2020 was due to lower net income, partially offset by the impact of the Company's share repurchases over the past year.

Adjusted Earnings

Adjusted earnings of $279 in the second quarter of 2020 decreased 57% compared to Adjusted earnings of $650 in the second quarter of 2019. Adjusted earnings of $726 in the first six months of 2020 decreased 39% compared to Adjusted earnings of $1,183 in the first six months of 2019. The decrease in Adjusted earnings in the second quarter and first six months of 2020 was primarily due to lower Net income attributable to Eaton ordinary shareholders, adjusted for higher restructuring program charges, and acquisition and divestiture charges.

Adjusted earnings per ordinary share decreased to $0.70 in the second quarter of 2020 compared to $1.53 in the second quarter of 2019. Adjusted earnings per ordinary share decreased to $1.79 in the first six months of 2020 compared to $2.79 in the first six months of 2019. The decrease in Adjusted earnings per ordinary share in the second quarter and first six months of 2020 was due to lower Adjusted earnings, adjusted for the impact of the Company's share repurchases over the past year.

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Business Segment Results of Operations

The following is a discussion of Net sales, operating profit and operating margin by business segment.

Electrical Americas

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	1,490		$	2,085		(29	)%	$	3,278		$	4,046		(19	)%
Operating profit	$	308		$	404		(24	)%	$	616		$	738		(17	)%
Operating margin	20.7		%	19.4		%			18.8		%	18.2		%

Net sales decreased 29% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 20% from the divestiture of the Lighting business, a decrease of 9% in organic sales, and a decrease of 1% from the impact of negative currency translation, partially offset by an increase of 1% from the acquisitions of Innovative Switchgear Solutions, Inc. and Power Distribution, Inc. Net sales decreased 19% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 14% from the divestiture of the Lighting business, a decrease of 5% in organic sales, and a decrease of 1% from the impact of negative currency translation, partially offset by an increase of 1% from the acquisitions of ISG and Power Distribution, Inc. The decrease in organic sales in the second quarter and first six months of 2020 was primarily driven by the impact of the COVID-19 pandemic.

The operating margin increased from 19.4% in the second quarter of 2019 to 20.7% in the second quarter of 2020 and from 18.2% in the first six months of 2019 to 18.8% in the first six months of 2020. The increase in operating margin was primarily due to the favorable impact from the divestiture of the Lighting business and cost containment actions to counteract the impact of the COVID-19 pandemic, partially offset by lower sales volumes.

Electrical Global

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	1,111		$	1,324		(16	)%	$	2,255		$	2,566		(12	)%
Operating profit	$	178		$	233		(24	)%	$	344		$	423		(19	)%
Operating margin	16.0		%	17.6		%			15.3		%	16.5		%

Net sales decreased 16% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 14% in organic sales and a decrease of 2% from the impact of negative currency translation. Net sales decreased 12% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 11% in organic sales and a decrease of 2% from the impact of negative currency translation, partially offset by an increase of 1% from the acquisition of Ulusoy Elektrik. The decrease in organic sales in the second quarter and first six months of 2020 was primarily driven by the impact of the COVID-19 pandemic, with particular weakness in global oil and gas markets and industrial applications.

The operating margin decreased from 17.6% in the second quarter of 2019 to 16.0% in the second quarter of 2020 and from 16.5% in the first six months of 2019 to 15.3% in the first six months of 2020 primarily due to lower sales volumes, partially offset by cost containment actions to mitigate the impact of the COVID-19 pandemic.

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Hydraulics

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	411		$	603		(32	)%	$	918		$	1,208		(24	)%
Operating profit	$	37		$	53		(30	)%	$	92		$	112		(18	)%
Operating margin	9.0		%	8.8		%			10.0		%	9.3		%

Net sales decreased 32% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 30% in organic sales and a decrease of 2% from the impact of negative currency translation. Net sales decreased 24% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 22% in organic sales and a decrease of 2% from the impact of negative currency translation. The decrease in organic sales in the second quarter and first six months of 2020 was primarily due to weakness at both OEMs and distributors globally.

The operating margin increased from 8.8% in the second quarter of 2019 to 9.0% in the second quarter of 2020 and from 9.3% in the first six months of 2019 to 10.0% in the first six months of 2020. The increase in operating margin was primarily due to depreciation expense no longer being charged as a result of the business being classified as held for sale as discussed in Note 2 and cost containment actions to counteract the impact of the COVID-19 pandemic, partially offset by lower sales volumes.

Aerospace

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	461		$	634		(27	)%	$	1,141		$	1,238		(8	)%
Operating profit	$	68		$	155		(56	)%	$	215		$	292		(26	)%
Operating margin	14.8		%	24.4		%			18.8		%	23.6		%

Net sales decreased 27% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 35% in organic sales, partially offset by an increase of 8% from the acquisition of Souriau-Sunbank Connection Technologies (Souriau-Sunbank). Net sales decreased 8% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 19% in organic sales, partially offset by an increase of 11% from the acquisition of Souriau-Sunbank. The decrease in organic sales in the second quarter and first six months of 2020 was primarily due to the impact of the COVID-19 pandemic on commercial aviation.

The operating margin decreased from 24.4% in the second quarter of 2019 to 14.8% in second quarter of 2020 and from 23.6% in the first six months of 2019 to 18.8% in the first six months of 2020 primarily due to lower sales volumes and the acquisition of Souriau-Sunbank.

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Vehicle

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	327		$	803		(59	)%	$	925		$	1,613		(43	)%
Operating profit (loss)	$	(21	)	$	136		(115	)%	$	60		$	258		(77	)%
Operating margin	(6.4		)%	16.9		%			6.5		%	16.0		%

Net sales decreased 59% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 52% in organic sales, a decrease of 4% from the divestiture of our Automotive Fluid Conveyance business, and a decrease of 3% from the impact of negative currency translation. Net sales decreased 43% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 36% in organic sales, a decrease of 4% from the divestiture of our Automotive Fluid Conveyance business, and a decrease of 3% from the impact of negative currency translation. The decrease in organic sales in the second quarter and first six months of 2020 was driven by plant shutdowns due to the COVID-19 pandemic, lower Class 8 OEM production, and continued weakness in light vehicle sales.

The operating margin decreased from 16.9% in the second quarter of 2019 to negative 6.4% in the second quarter of 2020 and from 16.0% in the first six months of 2019 to 6.5% in the first six months of 2020 primarily due to lower sales volumes.

eMobility

	Three months ended June 30						Increase (decrease)		Six months ended June 30						Increase (decrease)
	2020			2019					2020			2019
Net sales	$	56		$	84		(33	)%	$	128		$	167		(23	)%
Operating profit (loss)	$	(2	)	$	7		(129	)%	$	(1	)	$	12		(108	)%
Operating margin	(3.6		)%	8.3		%			(0.8		)%	7.2		%

Net sales decreased 33% in the second quarter of 2020 compared to the second quarter of 2019 due to a decrease of 33% in organic sales. Net sales decreased 23% in the first six months of 2020 compared to the first six months of 2019 due to a decrease of 22% in organic sales and a decrease of 1% from the impact of negative currency translation. The decrease in organic sales in the second quarter and first six months of 2020 was primarily due to the impact from the COVID-19 pandemic, with particular weakness in legacy internal combustion engine platforms.

The operating margin decreased from 8.3% in the second quarter of 2019 to negative 3.6% in the second quarter of 2020 and from 7.2% in the first six months of 2019 to negative 0.8% in the first six months of 2020 primarily due to lower sales volumes.

34

Corporate Expense

	Three months ended June 30				Increase (decrease)		Six months ended June 30				Increase (decrease)
	2020		2019				2020		2019
Amortization of intangible assets	$	88	$	94	(6	)%	$	175	$	187	(6	)%
Interest expense - net	38		50		(24	)%	72		110		(35	)%
Pension and other postretirement benefits expense	12		2		500	%	20		2		900	%
Restructuring program charges	187		—		NM		187		—		NM
Other expense - net	196		104		88	%	204		195		5	%
Total corporate expense	$	521	$	250	108	%	$	658	$	494	33	%

Total corporate expense was $521 in the second quarter of 2020 compared to Total corporate expense of $250 in the second quarter of 2019. Total corporate expense was $658 in the first six months of 2020 compared to Total corporate expense of $494 in the first six months of 2019. The increase in Total corporate expense for the second quarter and first six months of 2020 was primarily due to the multi-year restructuring program discussed in Note 13 and Other expense - net. The increase in Other expense - net is primarily due to higher acquisition and divestiture charges. The increase in the first six months is partially offset by a gain on sale of a business discussed in Note 2.

LIQUIDITY, CAPITAL RESOURCES AND CHANGES IN FINANCIAL CONDITION

Financial Condition and Liquidity

Eaton’s objective is to finance its business through operating cash flow and an appropriate mix of equity and long-term and short-term debt. By diversifying its debt maturity structure, Eaton reduces liquidity risk. The Company maintains access to the commercial paper markets through a $2,000 commercial paper program, which is supported by credit facilities in the aggregate principal amount of $2,000. There were no borrowings outstanding under these revolving credit facilities at June 30, 2020. Over the course of a year, cash, short-term investments and short-term debt may fluctuate in order to manage global liquidity. Eaton continues to be able to access commercial paper markets on the same basis as in prior periods. Although the COVID-19 pandemic negatively impacted second quarter results and we expect it may also have an unfavorable impact on third quarter results, our businesses continue to generate substantial cash. In addition, Eaton completed the $1.4 billion sale of our Lighting Business on March 2, 2020 and expects to complete the sale of our Hydraulics Business for $3.3 billion in cash by the end of the first quarter of 2021. Accordingly, Eaton believes it has the operating flexibility, cash flow, cash and short-term investment balances, and access to capital markets in excess of the liquidity necessary to meet future operating needs of the business as well as scheduled payments of long-term debt.

Eaton was in compliance with each of its debt covenants for all periods presented.

Sources and Uses of Cash

Operating Cash Flow

Net cash provided by operating activities was $1,080 in the first six months of 2020, a decrease of $351 in the source of cash compared to $1,431 in the first six months of 2019. The decrease in net cash provided by operating activities in the first six months of 2020 was driven by lower net income, partially offset by lower working capital balances compared to 2019.

Investing Cash Flow

Net cash provided by investing activities was $900 in the first six months of 2020, an increase of $1,610 in the source of cash compared to net cash used of $710 in the first six months of 2019. The increase in the source of cash was primarily driven by proceeds from the sale of the Lighting business discussed in Note 2 and net sales of short-term investments of $4 in 2020 compared to to net purchases of $221 in 2019.

Financing Cash Flow

Net cash used in financing activities was $2,034 in the first six months of 2020, an increase of $1,435 in the use of cash compared to $599 in the first six months of 2019. The increase in the use of cash was primarily due to lower proceeds from borrowings of $4 in 2020 compared to $1,232 in 2019 and higher share repurchases of $1,300 in 2020 compared to $440 in 2019, partially offset by lower payments on borrowings of $125 in 2020 compared to $757 in 2019.

35

Guaranteed Debt

Issuers, Guarantors and Guarantor Structure    

Eaton Corporation has issued senior notes pursuant to indentures dated April 1, 1994 (the 1994 Indenture), November 20, 2012 (the 2012 Indenture) and September 15, 2017 (the 2017 Indenture). Eaton Electric Holdings LLC, a subsidiary of Eaton, has issued senior notes pursuant to an indenture dated December 7, 2010 (the 2010 Indenture). These senior notes of both Eaton Corporation and Eaton Electrical Holdings LLC are registered under the Securities Act of 1933, as amended (the Registered Senior Notes). Eaton Corporation is also the issuer of two outstanding series of privately placed debt securities (the PPNs), and Eaton Capital Unlimited Company, another subsidiary of Eaton, is the issuer of three outstanding series of debt securities sold in offshore transactions under Regulation S promulgated under the Securities Act (the Eurobonds). The PPNs, the Eurobonds and the Registered Senior Notes (together, the Senior Notes) comprise substantially all of Eaton’s long-term indebtedness.

Substantially all of the Senior Notes, together with the credit facilities described above under Financial Condition and Liquidity (the Credit Facilities), are guaranteed by Eaton and 21 of its subsidiaries. Accordingly, they rank equally with each other. However, because these obligations are not secured, they would be effectively subordinated to any existing or future secured indebtedness of Eaton and its subsidiaries. As of June 30, 2020, Eaton has no material, long-term secured debt. The guaranteed Registered Senior Notes are also structurally subordinated to the liabilities of Eaton's subsidiaries that are not guarantors. Except as described below under Future Guarantors, Eaton is not obligated to cause its subsidiaries to guarantee the Registered Senior Notes.

The table set forth in Exhibit 22 filed with the Form 10-Q filed on April 30, 2020, details the primary obligors and guarantors with respect to the guaranteed Registered Senior Notes.

Terms of Guarantees of Registered Securities

Payment of principal and interest on the Registered Senior Notes is guaranteed, on an unsecured, unsubordinated basis by the subsidiaries of Eaton set forth in the table referenced in Exhibit 22. Each guarantee is full and unconditional, and joint and several. Each guarantor's guarantee is an unsecured obligation that ranks equally with all its other unsecured and unsubordinated indebtedness. The obligations of each guarantor under its guarantee of the Registered Senior Notes is subject to a customary savings clause or similar provision designed to prevent such guarantee from constituting a fraudulent conveyance or otherwise legally impermissible or voidable obligation.

Generally, each guarantee of the Registered Senior Notes by a guarantor other than Eaton provides that it will be automatically and unconditionally released and discharged upon:

(a) the consummation of any transaction permitted under the applicable indenture resulting in such guarantor ceasing to be a subsidiary, such as a sale to a third party;

(b) such guarantee (so long as the guarantor is not obligated under any other U.S. debt obligations), becoming prohibited by any applicable law, rule or regulation or by any contractual obligation;

(c) such guarantee resulting in material adverse tax consequences to Eaton or any of its subsidiaries (so long as the applicable guarantor is not obligated under any other U.S. debt obligation); or

(d) such guarantor becoming a controlled foreign corporation within the meaning Section 957(a) of the Internal Revenue Code (a CFC), or an entity the material assets of which is limited to equity interests of a CFC.

Notwithstanding the foregoing, each guarantee by a direct or indirect parent of Eaton Corporation (other than Eaton) provides that it will be released only under the circumstances described in subparagraphs (b) and (c) above.

The guarantee of Eaton does not contain any release provisions.

Notwithstanding the provisions above, the 2010 Indenture provides that certain legacy Cooper subsidiaries may only be released from the Senior Notes issued under the 2010 Indenture upon ceasing to be a subsidiary of Eaton Electrical Holdings LLC (other than by consolidation with, or merger into, Eaton Electric Holdings LLC or another subsidiary thereof) or by conveying substantially all of its properties and assets to a person other than Eaton Electric Holdings LLC or another subsidiary thereof.    

36

Future Guarantors

The 2012 and 2017 Indentures generally provide that, with certain limited exceptions, any subsidiary of Eaton must become a guarantor if it becomes obligated as borrower or guarantor under any series of debt securities or a syndicated credit facility. Further, any entity that becomes a direct or indirect parent entity of Eaton Corporation and holds any material assets, with certain limited exceptions, or owes any material liabilities must become a guarantor.

The 1994 Indenture and the 2010 Indenture do not contain provisions with respect to future guarantors.

Summarized Financial Information of Guarantors and Issuers

	June 30, 2020			December 31, 2019
Current assets	$	3,714		$	4,082
Noncurrent assets	11,711			13,181
Current liabilities	3,017			2,703
Noncurrent liabilities	8,942			10,023
Amounts due to subsidiaries that are non-issuers and non-guarantors - net	20,701			37,050
	Six months ended June 30			Year ended December 31
	2020			2019
Net sales	$	5,028		$	12,961
Sales to subsidiaries that are non-issuers and non-guarantors	400			1,161
Cost of products sold	4,296			10,524
Expense from subsidiaries that are non-issuers and non-guarantors - net	290			734
Net loss	(578		)	(90		)

The financial information presented is that of Eaton Corporation and the Guarantors, which includes Eaton Corporation plc, on a combined basis and the financial information of non-issuer and non-guarantor subsidiaries has been excluded. Intercompany balances and transactions between Eaton Corporation and Guarantors have been eliminated, and amounts due from, amounts due to, and transactions with non-issuer and non-guarantor subsidiaries have been presented separately.

FORWARD-LOOKING STATEMENTS

This Form 10-Q Report contains forward-looking statements concerning the anticipated completion of the divestiture of our Hydraulics business, anticipated additional charges and projected savings from restructuring actions, the future impact of COVID-19, the performance of our end markets and legal contingencies, among other matters. These statements may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Eaton, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside Eaton’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated changes in the markets for the Company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; the potential effects on our businesses from natural disasters; the availability of credit to customers and suppliers; competitive pressures on sales and pricing; unanticipated changes in the cost of material and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest; the impact of acquisitions and divestitures; unanticipated difficulties integrating acquisitions; new laws and governmental regulations; interest rate changes; tax rate changes or exposure to additional income tax liability; stock market and currency fluctuations; war, civil or political unrest or terrorism; the course of the COVID-19 pandemic and government responses thereto, and unanticipated deterioration of economic and financial conditions in the United States and around the world. Eaton does not assume any obligation to update these forward-looking statements.

37

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes in exposures to market risk since December 31, 2019.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures - Pursuant to SEC Rule 13a-15, an evaluation was performed under the supervision and with the participation of Eaton’s management, including Craig Arnold - Principal Executive Officer; and Richard H. Fearon - Principal Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, management concluded that Eaton’s disclosure controls and procedures were effective as of June 30, 2020.

Disclosure controls and procedures are designed to ensure that information required to be disclosed in Eaton’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Eaton’s reports filed under the Exchange Act is accumulated and communicated to management, including Eaton’s Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.

During the second quarter of 2020, there was no change in Eaton’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting. Management is currently evaluating the impact of businesses acquired in the past twelve months on Eaton's internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Information regarding the Company's current legal proceedings is presented in Note 8 of the Notes to the Condensed Consolidated Financial Statements.

ITEM 1A. RISK FACTORS.

“Item 1A. Risk Factors” in Eaton's 2019 Form 10-K includes a discussion of the Company's risk factors. There have been no material changes from the risk factors described in the 2019 Form 10-K, except as follows:

The recent coronavirus (COVID -19) outbreak has negatively impacted our results of operations. 

As a result of the COVID-19 pandemic outbreak, authorities have implemented measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in place-orders, and shut downs, and consumers have changed their demand patterns. As a result, our operations and financial results have been impacted. The degree to which COVID-19 impacts our future results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume.

38

ITEM 6. EXHIBITS.

Eaton Corporation plc

Second Quarter 2020 Report on Form 10-Q

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 8-K filed on May 1, 2017
4.1	Description of Eaton Corporation plc’s Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 of the registrant's Form 10-K filed on February 26, 2020)
4.2	Indenture dated as of November 20, 2012, among Turlock Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 of Eaton Corporation plc's Form 8-K Current Report filed on November 26, 2012 (Commission File No. 333-182303))
4.3	Supplemental Indenture No. 1, dated as of November 30, 2012, among Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 of the registrant's Form S-4 filed on September 6, 2013)
4.4	Supplemental Indenture No. 2, dated as of January 8, 2013, among Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference Exhibit 4.3 of the registrant's Form S-4 filed on September 6, 2013)
4.5	Supplemental Indenture No. 3, dated as of December 20, 2013, among Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference Exhibit 4.4 of the registrant's Form 10-K filed on February 28, 2018)
4.6	Supplemental Indenture No. 4, dated as of December 20, 2017 and effective as of January 1, 2018, among Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference Exhibit 4.5 of the registrant's Form 10-K filed on February 28, 2018)
4.7	Supplemental Indenture No. 5, dated as of February 16, 2018, among Eaton Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference Exhibit 4.6 of the registrant's Form 10-K filed on February 28, 2018)
4.8	Pursuant to Regulation S-K Item 601(b)(4), Eaton agrees to furnish to the SEC, upon request, a copy of the instruments defining the rights of holders of its long-term debt other than those set forth in Exhibits (4.2 - 4.7) hereto
22	Table of Senior Notes, Issuer and Guarantors (incorporated by reference to the Form 10-Q Report filed on April 30, 2020)
31.1	Certification of Principal Executive Officer (Pursuant to Rule 13a-14(a)) — Filed in conjunction with this Form 10-Q Report *
31.2	Certification of Principal Financial Officer (Pursuant to Rule 13a-14(a)) — Filed in conjunction with this Form 10-Q Report *
32.1	Certification of Principal Executive Officer (Pursuant to Rule 13a-14(b) as adopted pursuant to Section 906 of the Sarbanes-Oxley Act) — Filed in conjunction with this Form 10-Q Report *
32.2	Certification of Principal Financial Officer (Pursuant to Rule 13a-14(b) as adopted pursuant to Section 906 of the Sarbanes-Oxley Act) — Filed in conjunction with this Form 10-Q Report *
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Label Definition Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_______________________________

* Submitted electronically herewith.

39

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			EATON CORPORATION plc
			Registrant
Date:	July 29, 2020	By:	/s/ Richard H. Fearon
			Richard H. Fearon
			Principal Financial Officer
			(On behalf of the registrant and as Principal Financial Officer)

40

EX-31.1

Eaton Corporation plc

Second Quarter 2020 Report on Form 10-Q

Item 6

Exhibit 31.1

Certification

I, Craig Arnold, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 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 the 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:	July 29, 2020	/s/ Craig Arnold
		Craig Arnold
		Principal Executive Officer

EX-31.2

Eaton Corporation plc

Second Quarter 2020 Report on Form 10-Q

Item 6

Exhibit 31.2

Certification

I, Richard H. Fearon, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 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 the 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:	July 29, 2020	/s/ Richard H. Fearon
		Richard H. Fearon
		Principal Financial Officer

EX-32.1

Eaton Corporation plc

Second Quarter 2020 Report on Form 10-Q

Item 6

Exhibit 32.1

Certification

This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation plc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (“10-Q Report”).

I hereby certify that, based on my knowledge, the 10-Q Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation plc and its consolidated subsidiaries.

Date:	July 29, 2020	/s/ Craig Arnold
		Craig Arnold
		Principal Executive Officer

EX-32.2

Eaton Corporation plc

Second Quarter 2020 Report on Form 10-Q

Item 6

Exhibit 32.2

Certification

This written statement is submitted in accordance with Section 906 of the Sarbanes-Oxley Act of 2002. It accompanies Eaton Corporation plc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (“10-Q Report”).

I hereby certify that, based on my knowledge, the 10-Q Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78m), and information contained in the 10-Q Report fairly presents, in all material respects, the financial condition and results of operations of Eaton Corporation plc and its consolidated subsidiaries.

Date:	July 29, 2020	/s/ Richard H. Fearon
		Richard H. Fearon
		Principal Financial Officer

XML

Cover Page shares in Millions	6 Months Ended
	Jun. 30, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity File Number	000-54863
Entity Registrant Name	EATON CORPORATION plc
Entity Incorporation, State or Country Code	L2
Entity Tax Identification Number	98-1059235
Entity Address, Address Line One	Eaton House,
Entity Address, Address Line Two	30 Pembroke Road,
Entity Address, City or Town	Dublin 4,
Entity Address, Country	IE
Entity Address, Postal Zip Code	D04 Y0C2
City Area Code	+353
Local Phone Number	1637 2900
Title of 12(b) Security	Ordinary shares ($0.01 par value)
Trading Symbol	ETN
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)	400.1
Entity Central Index Key	0001551182
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Document Quarterly Report	true
Document Transition Report	false

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net sales	$ 3,856	$ 5,533	$ 8,645	$ 10,838
Cost of products sold	2,877	3,697	6,179	7,270
Selling and administrative expense	691	907	1,556	1,824
Research and development expense	126	151	279	307
Interest expense - net	38	50	72	110
Gain on sale of business	0	0	221	0
Other expense (income) - net	77	(10)	112	(14)
Income before income taxes	47	738	668	1,341
Income tax expense (benefit)	(7)	102	176	183
Net income	54	636	492	1,158
Less net income for noncontrolling interests	(3)	0	(3)	0
Net income attributable to Eaton ordinary shareholders	$ 51	$ 636	$ 489	$ 1,158
Net income per share attributable to Eaton ordinary shareholders
Diluted (usd per share)	$ 0.13	$ 1.50	$ 1.20	$ 2.73
Basic (usd per share)	$ 0.13	$ 1.51	$ 1.21	$ 2.74
Weighted-average number of ordinary shares outstanding
Diluted (shares)	401.3	423.1	406.2	424.5
Basic (shares)	400.4	421.6	404.8	422.8
Cash dividends declared per ordinary share (usd per share)	$ 0.73	$ 0.71	$ 1.46	$ 1.42

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 54	$ 636	$ 492	$ 1,158
Less net income for noncontrolling interests	(3)	0	(3)	0
Net income attributable to Eaton ordinary shareholders	51	636	489	1,158
Other comprehensive income (loss), net of tax
Currency translation and related hedging instruments	116	(36)	(493)	17
Pensions and other postretirement benefits	26	32	112	53
Cash flow hedges	15	(26)	(138)	(33)
Other comprehensive income (loss) attributable to Eaton ordinary shareholders	157	(30)	(519)	37
Total comprehensive income (loss) attributable to Eaton ordinary shareholders	$ 208	$ 606	$ (30)	$ 1,195

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash	$ 292	$ 370
Short-term investments	204	221
Accounts receivable - net	2,647	3,437
Inventory	2,138	2,805
Assets held for sale	2,405	1,377
Prepaid expenses and other current assets	527	518
Total current assets	8,213	8,728
Property, plant and equipment
Land and buildings	2,112	2,440
Machinery and equipment	5,211	6,266
Gross property, plant and equipment	7,323	8,706
Accumulated depreciation	(4,419)	(5,210)
Net property, plant and equipment	2,904	3,496
Other noncurrent assets
Goodwill	12,497	13,456
Other intangible assets	4,241	4,638
Operating lease assets	419	436
Deferred income taxes	356	372
Other assets	1,718	1,679
Total assets	30,348	32,805
Current liabilities
Short-term debt	139	255
Current portion of long-term debt	1,223	248
Accounts payable	1,620	2,114
Accrued compensation	254	449
Liabilities held for sale	432	325
Other current liabilities	1,821	1,741
Total current liabilities	5,489	5,132
Noncurrent liabilities
Long-term debt	6,906	7,819
Pension liabilities	1,324	1,462
Other postretirement benefits liabilities	322	328
Operating lease liabilities	320	331
Deferred income taxes	310	396
Other noncurrent liabilities	1,442	1,204
Total noncurrent liabilities	10,624	11,540
Shareholders’ equity
Ordinary shares (400.1 million outstanding in 2020 and 413.3 million in 2019)	4	4
Capital in excess of par value	12,228	12,200
Retained earnings	6,767	8,170
Accumulated other comprehensive loss	(4,809)	(4,290)
Shares held in trust	(2)	(2)
Total Eaton shareholders’ equity	14,188	16,082
Noncontrolling interests	47	51
Total equity	14,235	16,133
Total liabilities and equity	$ 30,348	$ 32,805

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CONSOLIDATED BALANCE SHEETS Parentheticals - shares shares in Millions	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Ordinary shares outstanding (shares)	400.1	413.3

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities
Net income	$ 492	$ 1,158
Adjustments to reconcile to net cash provided by operating activities
Depreciation and amortization	397	442
Deferred income taxes	32	7
Pension and other postretirement benefits expense	109	75
Contributions to pension plans	(65)	(62)
Contributions to other postretirement benefits plans	(9)	(6)
Gain on sale of business	(91)	0
Changes in working capital	95	(211)
Other - net	120	28
Net cash provided by operating activities	1,080	1,431
Investing activities
Capital expenditures for property, plant and equipment	(202)	(298)
Proceeds from sale of business	1,408	0
Cash paid for acquisitions of businesses, net of cash acquired	(195)	(243)
Sales (purchases) of short-term investments - net	4	(221)
Proceeds (payments) for settlement of currency exchange contracts not designated as hedges - net	(82)	50
Other - net	(33)	2
Net cash provided by (used in) investing activities	900	(710)
Financing activities
Proceeds from borrowings	4	1,232
Payments on borrowings	(125)	(757)
Cash dividends paid	(592)	(609)
Exercise of employee stock options	17	25
Repurchase of shares	(1,300)	(440)
Employee taxes paid from shares withheld	(34)	(44)
Other - net	(4)	(6)
Net cash used in financing activities	(2,034)	(599)
Effect of currency on cash	(22)	7
Less: Increase in cash classified as held for sale	(2)	0
Increase (decrease) in cash	(78)	129
Cash at the beginning of the period	370	283
Cash at the end of the period	$ 292	$ 412

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods.

This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2019 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments. Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization. See Note 14 for additional information related to the segments.

The Company recorded $13 and $19 of net gains for the three and six months ended June 30, 2019, respectively, related primarily to the remeasurement of intercompany loans denominated in a foreign currency and the currency exchange derivative contracts used to hedge these exposures. In the first quarter of 2020, Eaton changed the presentation of these gains from Other (income) expense - net to Interest expense - net, and reclassified all prior periods.

In the first quarter of 2020, the Company also changed the presentation of the following items within the operating activities section of the Condensed Consolidated Statements of Cash Flows:

• The non-cash gains and losses associated with currency exchange derivative contracts have been moved from Changes in working capital to Other-net. This puts the non-cash impact of these derivatives on the same line as the non-cash impact from the balance sheet currency exposures they are used to hedge.

• The changes in uncertain tax positions have been moved from Other-net to Changes in working capital. This places the cash flow impact from all taxes on the same line.

These cash flow reclassifications of $122 for the six months ended June 30, 2019, have been made to prior period amounts with no change to total operating cash flow. 

Adoption of New Accounting Standard

Eaton adopted Accounting Standard Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in the first quarter of 2020. This standard introduces new guidance for accounting for credit losses on receivables. The Company did not recognize a cumulative-effect adjustment to retained earnings as of January 1, 2020, as the adoption of this standard did not have a material impact to the Condensed Consolidated Financial Statements.

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ACQUISITION AND DIVESTITURES OF BUSINESSES

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Acquisition and Divestitures of Businesses

ACQUISITIONS AND DIVESTITURES OF BUSINESSES

Acquisition of controlling interest of Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S.

On April 15, 2019, Eaton completed the acquisition of an 82.275% controlling interest in Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S. (Ulusoy Elektrik), a leading manufacturer of electrical switchgear based in Ankara, Turkey, with a primary focus on medium-voltage solutions for industrial and utility customers. Its sales for the 12 months ended September 30, 2018 were $126. The purchase price for the shares was $214 on a cash and debt free basis. As required by the Turkish capital markets legislation, Eaton filed an application to execute a mandatory tender offer for the remaining shares shortly after the transaction closed. During the tender offer, Eaton purchased additional shares for $33 to increase its ownership interest to 93.7%. Ulusoy Elektrik is reported within the Electrical Global business segment.

Acquisition of Innovative Switchgear Solutions, Inc.

On July 19, 2019, Eaton acquired Innovative Switchgear Solutions, Inc. (ISG), a specialty manufacturer of medium-voltage electrical equipment serving the North American utility, commercial and industrial markets. Its 2018 sales were approximately $18. ISG is reported within the Electrical Americas business segment.

Acquisition of Souriau-Sunbank Connection Technologies

On December 20, 2019, Eaton acquired the Souriau-Sunbank Connection Technologies (Souriau-Sunbank) business of TransDigm Group Inc. for a cash purchase price of $906, net of cash received. Headquartered in Versailles, France, Souriau-Sunbank is a global leader in highly engineered electrical interconnect solutions for harsh environments in the aerospace, defense, industrial, energy, and transport markets. Its sales for the 12 months ended June 30, 2019 were $363. Souriau-Sunbank is reported within the Aerospace business segment.

The acquisition of Souriau-Sunbank has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. There has not been a material change from the initial estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, and these differences could have a material impact on Eaton's preliminary purchase price allocation.

Eaton’s 2020 Condensed Consolidated Financial Statements include Souriau-Sunbank’s results of operations. Souriau-Sunbank’s sales for the first six months of 2020 were $138.

Sale of Automotive Fluid Conveyance business

On December 31, 2019, Eaton sold its Automotive Fluid Conveyance Business. The transaction resulted in a pre-tax loss of$66 which was recorded in Other expense (income) - net. This business was reported within the Vehicle business segment.

Acquisition of Power Distribution, Inc.

On February 25, 2020, Eaton acquired Power Distribution, Inc. a leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers and industrial and commercial customers. The company is headquartered in Richmond, Virginia, and had 2019 sales of $125. Power Distribution, Inc. is reported within the Electrical Americas business segment.

Sale of Lighting business

On March 2, 2020, Eaton sold its Lighting business to Signify N.V. for a cash purchase price of $1.4 billion. The Company recognized a pre-tax gain of $221. The Lighting business, which had sales of $1.6 billion in 2019 as part of the Electrical Americas business segment, serves customers in commercial, industrial, residential, and municipal markets.

Pending sale of Hydraulics business

On January 21, 2020, Eaton entered into an agreement to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3 billion in cash. Eaton’s Hydraulics business is a global leader in hydraulics components, systems, and services for industrial and mobile equipment. The business had sales of $2.2 billion in 2019. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the first quarter of 2021.

Assets and liabilities held for sale

During the fourth quarter of 2019 and first quarter of 2020, the Company determined the Lighting business and Hydraulics business, respectively, met the criteria to be classified as held for sale. Therefore, assets and liabilities of these businesses have been presented as held for sale in the Consolidated Balance Sheets as of December 31, 2019 and June 30, 2020, respectively. Assets and liabilities classified as held for sale are measured at the lower of carrying value or fair value less costs to sell. There was no write-down as fair values of both the Lighting business and Hydraulics business assets less their costs to sell exceeded their respective carrying values. Depreciation and amortization expense is not recorded for the period in which Other long-lived assets are classified as held for sale.

The Company used the relative fair value method to allocate goodwill to both the Lighting and Hydraulics businesses. The fair values of the Lighting business and Hydraulics business were estimated based on a combination of the prices paid to Eaton by Signify N.V. and Danfoss A/S, respectively, and a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions.

The assets and liabilities classified as held for sale for the Lighting business on the December 31, 2019 Consolidated Balance Sheet and the Hydraulics business on the June 30, 2020 Consolidated Balance Sheet are as follows:

	June 30, 2020		December 31, 2019
	(Hydraulics business)		(Lighting business)
Cash	$	2	$	—
Accounts receivable - net	325		220
Inventory	382		161
Prepaid expenses and other current assets	12		10
Net property, plant and equipment	462		155
Goodwill	907		470
Other intangible assets	248		330
Operating lease assets	48		25
Deferred income taxes	5		—
Other noncurrent assets	14		6
Assets held for sale - current	$	2,405	$	1,377
Accounts payable	$	198	$	184
Accrued compensation	22		7
Other current liabilities	108		102
Pension liabilities	72		3
Operating lease liabilities	28		17
Deferred income taxes	4		(1		)
Other noncurrent liabilities	—		13
Liabilities held for sale - current	$	432	$	325

The Lighting business and Hydraulics business did not meet the criteria to be classified as discontinued operations as neither of these sales represent a strategic shift that will have a major effect on the Company's operations.

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REVENUE RECOGNITION

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services.

In the Electrical Americas segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The majority of the sales in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time.

In the Electrical Global segment, sales contracts are primarily for electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America, as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The majority of the sales contracts in this segment contain performance obligations satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. However, certain power distribution and power quality services are recognized over time.

Many of the products and services in power distribution and power quality services meet the definition of continuous transfer of control to customers and are recognized over time. These products are engineered to a customer’s design specifications, have no alternative use to Eaton, and are controlled by the customer as evidenced by the customer’s contractual ownership of the work in process or our right to payment for work performed to date plus a reasonable margin. As control is transferring over time, sales are recognized based on the extent of progress towards completion of the obligation. Eaton generally uses an input method to determine the progress completed and sales are recorded proportionally as costs are incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer.

In the Hydraulics segment, sales contracts are primarily for hydraulic components and systems for industrial and mobile equipment. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time when we ship the product from our facility.

In the Aerospace segment, sales contracts are primarily for aerospace fuel, hydraulics, and pneumatic systems for commercial and military use, as well as filtration systems for industrial applications. These sales contracts are primarily based on a customer’s purchase order, and frequently covered by terms and conditions included in a long-term agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility. Our military contracts are primarily fixed-price contracts that are not subject to performance-based payments or progress payments from the customer.

In the Vehicle segment, sales contracts are primarily for drivetrains, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks and commercial vehicles. These sales contracts are primarily based on a customer’s purchase order or a blanket purchase order subject to firm releases, frequently covered by terms and conditions included in a master supply agreement. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility.

In the eMobility segment, sales contracts are primarily for electronic and mechanical components and systems that improves the power management and performance of both on-road and off-road vehicles. These sales contracts are primarily based on a customer’s purchase order. In this segment, performance obligations are generally satisfied at a point in time either when we ship the product from our facility, or when it arrives at the customer’s facility.

In limited circumstances, primarily in the Electrical and Vehicle segments, Eaton sells separately-priced warranties that extend the warranty coverage beyond the standard coverage offered on specific products. Sales for these separately-priced warranties are recorded based on their stand-alone selling price and are recognized as revenue over the length of the warranty period.

The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market.

	Three months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	439	$	1,051	$	1,490
Electrical Global			598		513		1,111
			United States		Rest of World
Hydraulics			$	183	$	228	411
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	199	$	149	$	113	461
			Commercial		Passenger and Light Duty
Vehicle			$	166	$	161	327
eMobility							56
Total							$	3,856

	Three months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	948	$	1,137	$	2,085
Electrical Global			715		609		1,324
			United States		Rest of World
Hydraulics			$	273	330		603
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	302	$	214	$	118	634
			Commercial		Passenger and Light Duty
Vehicle			$	425	$	378	803
eMobility							84
Total							$	5,533

	Six months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	1,163	$	2,115	$	3,278
Electrical Global			1,255		1,000		2,255
			United States		Rest of World
Hydraulics			$	410	$	508	918
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	524	$	369	$	248	1,141
			Commercial		Passenger and Light Duty
Vehicle			$	458	$	467	925
eMobility							128
Total							$	8,645

	Six months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	1,854	$	2,192	$	4,046
Electrical Global			1,411		1,155		2,566
			United States		Rest of World
Hydraulics			$	539	$	669	1,208
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	592	$	425	$	221	1,238
			Commercial		Passenger and Light Duty
Vehicle			$	856	$	757	1,613
eMobility							167
Total							$	10,838

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivables from customers were $2,329 and $3,090 at June 30, 2020 and December 31, 2019, respectively. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. These assets and liabilities are reported on the Consolidated Balance Sheets on a contract-by-contract basis at the end of each reporting period. Unbilled receivables were $106 and $101 at June 30, 2020 and December 31, 2019, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables was primarily due to revenue recognized and not yet billed, partially offset by billings to customers during the quarter.

Changes in the deferred revenue liabilities are as follows:

	Deferred Revenue
Balance at January 1, 2020	$	234
Customer deposits and billings	464
Revenue recognized in the period	(459		)
Translation	(1		)
Deferred revenue reclassified to held for sale	(11		)
Balance at June 30, 2020	$	227

	Deferred Revenue
Balance at January 1, 2019	$	248
Customer deposits and billings	440
Revenue recognized in the period	(440		)
Translation	5
Balance at June 30, 2019	$	253

A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at June 30, 2020 was approximately $5.3 billion. At June 30, 2020, Eaton expects to recognize approximately 87% of this backlog in the next twelve months and the rest thereafter.

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CREDIT LOSSES FOR RECEIVABLES

6 Months Ended

Jun. 30, 2020

Credit Loss [Abstract]

CREDIT LOSSES FOR RECEIVABLES

CREDIT LOSSES FOR RECEIVABLES

Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 days.

Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-offs based on historic experience adjusted for market conditions. The Company’s segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made.

Accounts receivable are net of an allowance for credit losses of $46 and $49 at June 30, 2020 and December 31, 2019. The change in the allowance for credit losses includes expense and net write-offs, none of which is significant.

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INVENTORY

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

INVENTORY

INVENTORY

Inventory is carried at lower of cost or net realizable value. The components of inventory follow:

	June 30, 2020		December 31, 2019
Raw materials	$	774	$	986
Work-in-process	522		640
Finished goods	842		1,179
Total inventory	$	2,138	$	2,805

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GOODWILL

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

GOODWILL

Change in the carrying amount of goodwill by segment follows:

	January 1, 2020		Additions		Goodwill reclassified to held for sale			Translation			June 30, 2020
Electrical Americas	$	6,352	$	110	$	—		$	(29	)	$	6,433
Electrical Global	4,106		7		—			(116		)	3,997
Hydraulics	921		—		(907		)	(14		)	—
Aerospace	1,706		2		—			(10		)	1,698
Vehicle	291		—		—			(2		)	289
eMobility	80		—		—			—			80
Total	$	13,456	$	119	$	(907	)	$	(171	)	$	12,497

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The Company used the relative fair value method to reallocate goodwill to the associated reporting units impacted by the reorganization. The Company’s reporting units are equivalent to the reportable operating segments, except for the Aerospace segment which has two reporting units.

The fair values of the Electrical Americas and Electrical Global reportable segments were estimated based on a discounted cash flow model. The model includes estimates of future cash flows, future growth rates, terminal value amounts, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. These analyses require the exercise of judgments, including judgments about appropriate discount rates, perpetual growth rates, revenue growth, and margin assumptions.

The fair value of the Hydraulics reportable segment was estimated based on a combination of the price to be paid to Eaton by Danfoss A/S and a discounted cash flow model. See Note 2 for additional information about the allocation of goodwill to the Hydraulics reportable segment.

The Filtration and Golf Grip businesses previously included in the Hydraulics reportable segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace segment as part of the reorganization.

During the first quarter of 2020, goodwill impairment testing was performed using quantitative analyses as a result of the Hydraulics business being classified as held for sale as discussed in Note 2, and the re-segmentation of the Electrical Americas, Electrical Global and Aerospace segments. Based on these analyses performed, the fair value of Eaton's impacted reporting units continues to substantially exceed their respective carrying amounts and thus, no impairment exists.

The 2020 additions to goodwill relate to the anticipated synergies of acquiring Power Distribution, Inc. The allocation of the purchase price from this acquisition is preliminary and will be completed during the measurement period.

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RETIREMENT BENEFITS PLANS

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

RETIREMENT BENEFITS PLANS

RETIREMENT BENEFITS PLANS

The components of retirement benefits expense follow:

	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Three months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	24		$	23		$	18		$	15		$	1		$	1
Interest cost	26			34			11			14			2			4
Expected return on plan assets	(58		)	(59		)	(27		)	(27		)	—			(1		)
Amortization	26			16			14			9			(3		)	(4		)
	18			14			16			11			—			—
Settlements and special termination benefits	18			13			3			1			—			—
Total expense	$	36		$	27		$	19		$	12		$	—		$	—
	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Six months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	48		$	46		$	36		$	29		$	1		$	1
Interest cost	52			68			22			29			4			7
Expected return on plan assets	(115		)	(117		)	(54		)	(54		)	—			(1		)
Amortization	51			31			29			19			(6		)	(7		)
	36			28			33			23			(1		)	—
Settlements, curtailments and special termination benefits	35			23			6			1			—			—
Total expense	$	71		$	51		$	39		$	24		$	(1	)	$	—

The components of retirement benefits expense other than service costs are included in Other expense (income) - net.

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LEGAL CONTINGENCIES

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

LEGAL 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. Insurance may cover some of the costs associated with these claims and proceedings. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes they will not have a material adverse effect on the consolidated financial statements.

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INCOME TAXES

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The effective income tax rate for the second quarter of 2020 was a tax benefit of 15.1% compared to tax expense of 13.9% for the second quarter of 2019. The credit tax rate in the second quarter of 2020 was primarily due to the tax impact from the restructuring charges described in Note 13. The effective income tax rate for the first six months of 2020 was expense of 26.4% compared to expense of 13.7% for the first six months of 2019. The increase in the effective tax rate in the first six months of 2020 was primarily due to the tax impact on the gain from the sale of the Lighting business described in Note 2.

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EQUITY

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

EQUITY

EQUITY

On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5,000 of ordinary shares (2019 Program). Under the 2019 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three months ended June 30, 2020, no ordinary shares were repurchased. During the six months ended June 30, 2020, 14.2 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $1,300. During the three and six months ended June 30, 2019, 3.2 million and 5.1 million ordinary shares, respectively, were repurchased under the 2019 Program in the open market at a total cost of $260 and $410, respectively.

The changes in Shareholders’ equity follow:

	Ordinary shares				Capital in excess of par value		Retained earnings			Accumulated other comprehensive loss			Shares held in trust			Total Eaton shareholders' equity			Noncontrolling interests			Total equity
(In millions)	Shares		Dollars
Balance at January 1, 2020	413.3		$	4	$	12,200	$	8,170		$	(4,290	)	$	(2	)	$	16,082		$	51		$	16,133
Net income	—		—		—		438			—			—			438			—			438
Other comprehensive loss, net of tax										(676		)				(676		)	—			(676		)
Cash dividends paid and accrued	—		—		—		(300		)	—			—			(300		)	(5		)	(305		)
Issuance of shares under equity-based compensation plans	0.9		—		3		(1		)	—			(1		)	1			—			1
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			(3		)	(3		)
Repurchase of shares	(14.2	)	—		—		(1,300		)	—			—			(1,300		)	—			(1,300		)
Balance at March 31, 2020	400.0		$	4	$	12,203	$	7,007		$	(4,966	)	$	(3	)	$	14,245		$	43		$	14,288
Net income	—		—		—		51			—			—			51			3			54
Other comprehensive income, net of tax										157						157						157
Cash dividends paid	—		—		—		(292		)	—			—			(292		)	(1		)	(293		)
Issuance of shares under equity-based compensation plans	0.1		—		25		1			—			1			27			—			27
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			2			2
Balance at June 30, 2020	400.1		$	4	$	12,228	$	6,767		$	(4,809	)	$	(2	)	$	14,188		$	47		$	14,235

	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, 2019	423.6		$	4	$	12,090		$	8,161		$	(4,145	)	$	(3	)	$	16,107		$	35		$	16,142
Net income	—		—		—			522			—			—			522			—			522
Other comprehensive income, net of tax											67						67			—			67
Cash dividends paid and accrued	—		—		—			(309		)	—			—			(309		)	(1		)	(310		)
Issuance of shares under equity-based compensation plans	1.4		—		(5		)	1			—			—			(4		)	—			(4		)
Repurchase of shares	(1.9	)	—		—			(150		)	—			—			(150		)	—			(150		)
Balance at March 31, 2019	423.1		$	4	$	12,085		$	8,225		$	(4,078	)	$	(3	)	$	16,233		$	34		$	16,267
Net income	—		—		—			636			—			—			636			—			636
Other comprehensive loss, net of tax	—										(30		)				(30		)				(30		)
Cash dividends paid	—		—		—			(300		)	—			—			(300		)	(1		)	(301		)
Issuance of shares under equity-based compensation plans	0.1		—		27			(1		)	—			1			27			—			27
Acquisition of a business	—		—		—			—			—			—			—			51			51
Acquisition of noncontrolling interest obtained through tender offer	—		—		—			—			—			—			—			(29		)	(29		)
Repurchase of Shares	(3.2	)	—		—			(260		)	—			—			(260		)	—			(260		)
Balance at June 30, 2019	420.0		$	4	$	12,112		$	8,300		$	(4,108	)	$	(2	)	$	16,306		$	55		$	16,361

The changes in Accumulated other comprehensive loss follow:

	Currency translation and related hedging instruments			Pensions and other postretirement benefits			Cash flow hedges			Total
Balance at January 1, 2020	$	(2,848	)	$	(1,408	)	$	(34	)	$	(4,290	)
Other comprehensive (loss) income    before reclassifications	(530		)	23			(143		)	(650		)
Amounts reclassified from Accumulated other    comprehensive loss	37			89			5			131
Net current-period Other comprehensive    (loss) income	(493		)	112			(138		)	(519		)
Balance at June 30, 2020	$	(3,341	)	$	(1,296	)	$	(172	)	$	(4,809	)

The reclassifications out of Accumulated other comprehensive loss follow:

	Six months ended June 30, 2020				Consolidated statements of income classification
Currency translation losses
Sale of business	$	(37	)		Gain on sale of business
Tax expense	—
Total, net of tax	(37		)
Amortization of defined benefit pensions and other postretirement benefits items
Actuarial loss and prior service cost	(115		)	1
Tax benefit	26
Total, net of tax	(89		)
Gains and (losses) on cash flow hedges
Currency exchange contracts	(6		)		Net sales and Cost of products sold
Tax benefit	1
Total, net of tax	(5		)
Total reclassifications for the period	$	(131	)

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 pension and other postretirement benefits items.

Net Income Per Share Attributable to Eaton Ordinary Shareholders

A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:

	Three months ended June 30				Six months ended June 30
(Shares in millions)	2020		2019		2020		2019
Net income attributable to Eaton ordinary shareholders	$	51	$	636	$	489	$	1,158
Weighted-average number of ordinary shares outstanding - diluted	401.3		423.1		406.2		424.5
Less dilutive effect of equity-based compensation	0.9		1.5		1.4		1.7
Weighted-average number of ordinary shares outstanding - basic	400.4		421.6		404.8		422.8
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	0.13	$	1.50	$	1.20	$	2.73
Basic	0.13		1.51		1.21		2.74

For the second quarter and first six months of 2020, 1.7 million and 1.0 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. For the second quarter and first six months of 2019, 0.8 million and 1.2 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.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2020

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:

	Total			Level 1		Level 2			Level 3
June 30, 2020
Cash	$	292		$	292	$	—		$	—
Short-term investments	204			204		—			—
Net derivative contracts	(75		)	—		(75		)	—
December 31, 2019
Cash	$	370		$	370	$	—		$	—
Short-term investments	221			221		—			—
Net derivative contracts	53			—		53			—

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 $8,129 and fair value of $8,944 at June 30, 2020 compared to $8,067 and $8,638, respectively, at December 31, 2019. The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities, and are considered a Level 2 fair value measurement.

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and, commodity contracts to manage risks from these market fluctuations. The instruments used by Eaton are straightforward, non-leveraged instruments. The counterparties to these instruments are financial institutions with strong credit ratings. Eaton maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit rating of these institutions. Such instruments are not purchased and sold for trading purposes.

Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Consolidated Balance Sheets. Accounting for the gain or loss resulting from the change in the fair value of the derivative financial instrument depends on whether it has been designated, and is effective, as part of a hedging relationship and, if so, as to the nature of the hedging activity. Eaton formally documents all relationships between derivative financial instruments accounted for as designated hedges and the hedged item, as well as its risk-management objective and strategy for undertaking the hedge transaction. This process includes linking derivative financial instruments to a recognized asset or liability, specific firm commitment, forecasted transaction, or net investment in a foreign operation. These financial instruments can be designated as:

• Hedges of the change in the fair value of a recognized fixed-rate asset or liability, or the firm commitment to acquire such an asset or liability (a fair value hedge); for these hedges, the gain or loss from the derivative financial instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in income during the period of change in fair value.

• Hedges of the variable cash flows of a recognized variable-rate asset or liability, or the forecasted acquisition of such an asset or liability (a cash flow hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss on the hedged item is included in income.

• Hedges of the currency exposure related to a net investment in a foreign operation (a net investment hedge); for these hedges, the gain or loss from the derivative financial instrument is recognized in Accumulated other comprehensive income and reclassified to income in the same period when the gain or loss related to the net investment in the foreign operation is included in income.

The gain or loss from a derivative financial instrument designated as a hedge is classified in the same line of the Consolidated Statements of Income as the offsetting loss or gain on the hedged item. The cash flows resulting from these financial instruments are classified in operating activities on the Condensed Consolidated Statements of Cash Flows.

For derivatives that are not designated as a hedge, any gain or loss is immediately recognized in income. The majority of derivatives used in this manner relate to risks resulting from assets or liabilities denominated in a foreign currency and certain commodity contracts that arise in the normal course of business.

Eaton uses certain of its debt denominated in foreign currency to hedge portions of its net investments in foreign operations against foreign currency exposure (net investment hedges). Foreign currency denominated debt designated as a non-derivative net investment hedging instrument had a carrying value on an after-tax basis of $1,842 at June 30, 2020 and $1,845 at December 31, 2019.

Derivative Financial Statement Impacts

The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows:

	Notional amount		Other  current assets		Other noncurrent assets		Other current liabilities		Other noncurrent liabilities		Type of hedge	Term
June 30, 2020
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	5	$	121	$	—	$	—	Fair value	6 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	850		—		3		—		178		Cash flow	33 years
Currency exchange contracts	1,031		9		1		37		12		Cash flow	1 to 36 months
Commodity contracts	13		1		—		—		—		Cash flow	1 to 10 months
Total			$	15	$	125	$	37	$	190
Derivatives not designated as  hedges
Currency exchange contracts	$	4,354	$	30			$	19				1 to 12 months
Commodity contracts	7		1				—					1 month
Total			$	31			$	19
December 31, 2019
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	—	$	57	$	—	$	—	Fair value	12 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	500		—		3		—		42		Cash flow	13 to 33 years
Currency exchange contracts	1,146		14		3		11		6		Cash flow	1 to 36 months
Commodity contracts	9		—		—		—		—		Cash flow	1 to 9 months
Total			$	14	$	63	$	11	$	48
Derivatives not designated as  hedges
Currency exchange contracts	$	4,975	$	48			$	13				1 to 12 months
Commodity contracts	3		—				—					1 month
Total			$	48			$	13

The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its operations. This activity represents the great majority of these currency exchange contracts.

As of June 30, 2020, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:

Commodity	June 30, 2020		Term
Copper	5	millions of pounds	1 to 10 months
Gold	622	Troy ounces	1 to 3 months

The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:

	Carrying amount of the hedged assets (liabilities)						Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a)
Location on Consolidated Balance Sheets	June 30, 2020			December 31, 2019			June 30, 2020			December 31, 2019
Long-term debt	$	(2,838	)	$	(2,838	)	$	(164	)	$	(97	)

^(a) At June 30, 2020 and December 31, 2019, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $38 and $40, respectively.

The impact of hedging activities to the Consolidated Statements of Income are as follow:

	Three months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	3,856		$	2,877		$	38
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	4		$	—
Derivative designated as hedging instrument	(5		)	(4		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(1	)
Derivative designated as hedging instrument	—			—			1

	Three months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	5,533		$	3,697		$	50
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	2		$	(4	)	$	—
Derivative designated as hedging instrument	(2		)	4			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(40	)
Derivative designated as hedging instrument	—			—			40

	Six months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	8,645		$	6,179		$	72
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	1		$	—
Derivative designated as hedging instrument	(5		)	(1		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(69	)
Derivative designated as hedging instrument	—			—			69

	Six months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	10,838		$	7,270		$	110
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	(9	)	$	—
Derivative designated as hedging instrument	(5		)	9			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(63	)
Derivative designated as hedging instrument	—			—			63

The impact of derivatives not designated as hedges to the Consolidated Statements of Income are as follow:

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Three months ended June 30
	2020		2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	46	$	8		Interest expense - net
Commodity Contracts	1		(1		)	Cost of products sold
Total	$	47	$	7

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Six months ended June 30
	2020			2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	(103	)	$	48	Interest expense - net
Commodity Contracts	1			—		Cost of products sold
Total	$	(102	)	$	48

The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income follow:

	Gain (loss) recognized in other comprehensive (loss) income						Location of gain (loss) reclassified from Accumulated other comprehensive loss	Gain (loss) reclassified from Accumulated other comprehensive loss
	Three months ended June 30							Three months ended June 30
	2020			2019				2020			2019
Derivatives designated as    cash flow hedges
Forward starting floating-to-fixed  interest rate swaps	$	11		$	(18	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(3		)	(10		)	Net sales and Cost of products sold	(9		)	2
Commodity contracts	3			(2		)	Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	(38		)	—			Interest expense - net	—			—
Total	$	(27	)	$	(30	)		$	(9	)	$	2
	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
	Six months ended June 30							Six months ended June 30
	2020			2019				2020			2019
Derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps	$	(136	)	$	(27	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(45		)	(10		)	Net sales and Cost of products sold	(6		)	4
Commodity contracts	1			—			Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	5			12			Interest expense - net	—			—
Total	$	(175	)	$	(25	)		$	(6	)	$	4

At June 30, 2020, a loss of $27 of estimated unrealized net gains or losses associated with our cash flow hedges were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next 12 months.

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RESTRUCTURING CHARGES

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGES

RESTRUCTURING CHARGES

Eaton has decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions. Restructuring charges incurred under this program were $187 in the second quarter of 2020. These restructuring activities are expected to incur additional expenses of $33 in the second half of 2020, $55 in 2021, and $5 in 2022, primarily comprised of plant closing costs, resulting in total estimated charges of $280 for the entire program.

A summary of restructuring program charges by type follows:

	Three months ended June 30, 2020
Workforce reductions	$	166
Plant closing and other	21
Total	$	187

Restructuring program charges related to the following segments:

	Three months ended June 30, 2020
Electrical Americas	$	13
Electrical Global	51
Aerospace	30
Vehicle	90
eMobility	1
Corporate	2
Total	$	187

A summary of liabilities related to workforce reductions, plant closing and other associated costs follows:

	Workforce reductions			Plant closing and other			Total
Balance at December 31, 2019	$	—		$	—		$	—
Liability recognized	166			21			187
Payments, utilization and translation	(9		)	(21		)	(30		)
Balance at June 30, 2020	$	157		$	—		$	157

These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other expense (income) - net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. See Note 14 for additional information about business segments.

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BUSINESS SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance.

During the first quarter of 2020, Eaton re-segmented certain reportable operating segments due to a reorganization of the Company's businesses. The new reportable segments are Electrical Americas and Electrical Global, which include the legacy Electrical Products and Electrical Systems and Services segments. Additionally, the Filtration and Golf Grip businesses previously included in the Hydraulics segment, and the electrical aerospace connectors business previously included in the Electrical Products segment, have been added to the Aerospace reportable segment as part of the reorganization. The Company also changed how it measures business segment performance in 2020 as it no longer allocates acquisition and divestiture charges to its operating segments. Historical segment information has been retrospectively adjusted to reflect these changes.

Electrical Americas and Electrical Global

The Electrical Americas segment consists of electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and services that are primarily produced and sold in North and South America. The Electrical Global segment consists of electrical components, industrial components, power distribution and assemblies, single phase and three phase power quality, and services that are primarily produced and sold outside of North and South America; as well as hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems that are produced and sold globally. The principal markets for these segments are industrial, institutional, governmental, utility, commercial, residential and information technology. These products are used wherever there is a demand for electrical power in commercial buildings, data centers, residences, apartment and office buildings, hospitals, factories, utilities, and industrial and energy facilities. The segments share certain common global customers, but a large majority of the customers are located regionally. Sales are made through distributors, resellers, and manufacturers' representatives, as well as directly to original equipment manufacturers, utilities, and certain other end users.

Hydraulics

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; and industrial drum and disc brakes. The principal markets for the Hydraulics segment include renewable energy, marine, agriculture, oil and gas, construction, mining, forestry, utility, material handling, truck and bus, machine tools, molding, primary metals, and power generation. Key manufacturing customers in these markets and other customers 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, as well as filtration systems for industrial applications. Products include hydraulic power generation systems for aerospace applications including pumps, motors, hydraulic power units, hose and fittings, electro-hydraulic pumps; controls and sensing products including valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems and nose wheel steering systems; fluid conveyance products, including hose, thermoplastic tubing, fittings, adapters, couplings, sealing and ducting; fuel systems including fuel pumps, sensors, valves, adapters and regulators; high performance interconnect products including wiring connectors and cables. The Aerospace segment also includes filtration systems including hydraulic filters, bag filters, strainers and cartridges; and golf grips. The principal markets for the Aerospace segment are manufacturers of commercial and military aircraft and related after-market customers, as well as industrial applications. These manufacturers and other customers operate globally. Products are sold and serviced through a variety of channels.

Vehicle

The Vehicle segment is a leader in the design, manufacture, marketing, and supply of: drivetrain, powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance, and safety of cars, light trucks and commercial vehicles. Products include transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, cylinder heads, locking and limited slip differentials, transmission controls, and fuel vapor components for the global vehicle industry. The principal markets for the Vehicle segment are original equipment manufacturers and aftermarket customers of heavy-, medium-, and light-duty trucks, SUVs, CUVs, passenger cars and agricultural equipment.

eMobility

The eMobility segment designs, manufactures, markets, and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. Products include high voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution, fuel tank isolation valves, and commercial vehicle hybrid systems. The principle markets for the eMobility segment are original equipment manufacturers and aftermarket customers of passenger cars, commercial vehicles, and construction, agriculture, and mining equipment.

Other information

The accounting policies of the business segments are generally the same as the policies described in Note 1 to the Consolidated Financial Statements contained in the 2019 Form 10-K, except that operating profit only reflects the service cost component and the cost of any special termination benefits 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 all of the Company’s costs associated with acquisitions, divestitures, and gains and losses on the sale of certain businesses, restructuring program costs (Note 13) 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 certain cash, short-term investments, deferred income taxes, certain accounts receivable, certain property, plant and equipment, and certain other assets.

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019
Net sales
Electrical Americas	$	1,490		$	2,085		$	3,278		$	4,046
Electrical Global	1,111			1,324			2,255			2,566
Hydraulics	411			603			918			1,208
Aerospace	461			634			1,141			1,238
Vehicle	327			803			925			1,613
eMobility	56			84			128			167
Total net sales	$	3,856		$	5,533		$	8,645		$	10,838
Segment operating profit (loss)
Electrical Americas	$	308		$	404		$	616		$	738
Electrical Global	178			233			344			423
Hydraulics	37			53			92			112
Aerospace	68			155			215			292
Vehicle	(21		)	136			60			258
eMobility	(2		)	7			(1		)	12
Total segment operating profit	568			988			1,326			1,835
Corporate
Amortization of intangible assets	(88		)	(94		)	(175		)	(187		)
Interest expense - net	(38		)	(50		)	(72		)	(110		)
Pension and other postretirement benefits expense	(12		)	(2		)	(20		)	(2		)
Restructuring program charges	(187		)	—			(187		)	—
Other expense - net	(196		)	(104		)	(204		)	(195		)
Income before income taxes	47			738			668			1,341
Income tax expense (benefit)	(7		)	102			176			183
Net income	54			636			492			1,158
Less net income for noncontrolling interests	(3		)	—			(3		)	—
Net income attributable to Eaton ordinary shareholders	$	51		$	636		$	489		$	1,158

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BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Eaton Corporation plc (Eaton or the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by United States generally accepted accounting principles (US GAAP) for complete financial statements. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) have been made that are necessary for a fair presentation of the condensed consolidated financial statements for the interim periods.

This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in Eaton’s 2019 Form 10-K. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

Adoption of New Accounting Standard

Adoption of New Accounting Standard

Eaton adopted Accounting Standard Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in the first quarter of 2020. This standard introduces new guidance for accounting for credit losses on receivables. The Company did not recognize a cumulative-effect adjustment to retained earnings as of January 1, 2020, as the adoption of this standard did not have a material impact to the Condensed Consolidated Financial Statements.

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ACQUISITION AND DIVESTITURES OF BUSINESSES - (Tables)

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Assets and Liabilities Classified as Held for Sale

The assets and liabilities classified as held for sale for the Lighting business on the December 31, 2019 Consolidated Balance Sheet and the Hydraulics business on the June 30, 2020 Consolidated Balance Sheet are as follows:

	June 30, 2020		December 31, 2019
	(Hydraulics business)		(Lighting business)
Cash	$	2	$	—
Accounts receivable - net	325		220
Inventory	382		161
Prepaid expenses and other current assets	12		10
Net property, plant and equipment	462		155
Goodwill	907		470
Other intangible assets	248		330
Operating lease assets	48		25
Deferred income taxes	5		—
Other noncurrent assets	14		6
Assets held for sale - current	$	2,405	$	1,377
Accounts payable	$	198	$	184
Accrued compensation	22		7
Other current liabilities	108		102
Pension liabilities	72		3
Operating lease liabilities	28		17
Deferred income taxes	4		(1		)
Other noncurrent liabilities	—		13
Liabilities held for sale - current	$	432	$	325

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REVENUE RECOGNITION (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Sales

The Company’s six operating segments and the following tables disaggregate sales by lines of businesses, geographic destination, market channel or end market.

	Three months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	439	$	1,051	$	1,490
Electrical Global			598		513		1,111
			United States		Rest of World
Hydraulics			$	183	$	228	411
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	199	$	149	$	113	461
			Commercial		Passenger and Light Duty
Vehicle			$	166	$	161	327
eMobility							56
Total							$	3,856

	Three months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	948	$	1,137	$	2,085
Electrical Global			715		609		1,324
			United States		Rest of World
Hydraulics			$	273	330		603
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	302	$	214	$	118	634
			Commercial		Passenger and Light Duty
Vehicle			$	425	$	378	803
eMobility							84
Total							$	5,533

	Six months ended June 30, 2020
Net sales			Products		Systems		Total
Electrical Americas			$	1,163	$	2,115	$	3,278
Electrical Global			1,255		1,000		2,255
			United States		Rest of World
Hydraulics			$	410	$	508	918
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	524	$	369	$	248	1,141
			Commercial		Passenger and Light Duty
Vehicle			$	458	$	467	925
eMobility							128
Total							$	8,645

	Six months ended June 30, 2019
Net sales			Products		Systems		Total
Electrical Americas			$	1,854	$	2,192	$	4,046
Electrical Global			1,411		1,155		2,566
			United States		Rest of World
Hydraulics			$	539	$	669	1,208
	Original Equipment Manufacturers		Aftermarket		Industrial and Other
Aerospace	$	592	$	425	$	221	1,238
			Commercial		Passenger and Light Duty
Vehicle			$	856	$	757	1,613
eMobility							167
Total							$	10,838

Schedule of Changes in Deferred Revenue Liabilities

Changes in the deferred revenue liabilities are as follows:

	Deferred Revenue
Balance at January 1, 2020	$	234
Customer deposits and billings	464
Revenue recognized in the period	(459		)
Translation	(1		)
Deferred revenue reclassified to held for sale	(11		)
Balance at June 30, 2020	$	227

	Deferred Revenue
Balance at January 1, 2019	$	248
Customer deposits and billings	440
Revenue recognized in the period	(440		)
Translation	5
Balance at June 30, 2019	$	253

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INVENTORY (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Components of Inventory

The components of inventory follow:

	June 30, 2020		December 31, 2019
Raw materials	$	774	$	986
Work-in-process	522		640
Finished goods	842		1,179
Total inventory	$	2,138	$	2,805

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GOODWILL (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Change in the carrying amount of goodwill by segment follows:

	January 1, 2020		Additions		Goodwill reclassified to held for sale			Translation			June 30, 2020
Electrical Americas	$	6,352	$	110	$	—		$	(29	)	$	6,433
Electrical Global	4,106		7		—			(116		)	3,997
Hydraulics	921		—		(907		)	(14		)	—
Aerospace	1,706		2		—			(10		)	1,698
Vehicle	291		—		—			(2		)	289
eMobility	80		—		—			—			80
Total	$	13,456	$	119	$	(907	)	$	(171	)	$	12,497

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RETIREMENT BENEFIT PLANS (Tables)

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Retirement Benefits Plans Expense

The components of retirement benefits expense follow:

	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Three months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	24		$	23		$	18		$	15		$	1		$	1
Interest cost	26			34			11			14			2			4
Expected return on plan assets	(58		)	(59		)	(27		)	(27		)	—			(1		)
Amortization	26			16			14			9			(3		)	(4		)
	18			14			16			11			—			—
Settlements and special termination benefits	18			13			3			1			—			—
Total expense	$	36		$	27		$	19		$	12		$	—		$	—
	United States pension benefit expense						Non-United States pension benefit expense						Other postretirement benefits expense
	Six months ended June 30
	2020			2019			2020			2019			2020			2019
Service cost	$	48		$	46		$	36		$	29		$	1		$	1
Interest cost	52			68			22			29			4			7
Expected return on plan assets	(115		)	(117		)	(54		)	(54		)	—			(1		)
Amortization	51			31			29			19			(6		)	(7		)
	36			28			33			23			(1		)	—
Settlements, curtailments and special termination benefits	35			23			6			1			—			—
Total expense	$	71		$	51		$	39		$	24		$	(1	)	$	—

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Changes in Shareholders' equity

The changes in Shareholders’ equity follow:

	Ordinary shares				Capital in excess of par value		Retained earnings			Accumulated other comprehensive loss			Shares held in trust			Total Eaton shareholders' equity			Noncontrolling interests			Total equity
(In millions)	Shares		Dollars
Balance at January 1, 2020	413.3		$	4	$	12,200	$	8,170		$	(4,290	)	$	(2	)	$	16,082		$	51		$	16,133
Net income	—		—		—		438			—			—			438			—			438
Other comprehensive loss, net of tax										(676		)				(676		)	—			(676		)
Cash dividends paid and accrued	—		—		—		(300		)	—			—			(300		)	(5		)	(305		)
Issuance of shares under equity-based compensation plans	0.9		—		3		(1		)	—			(1		)	1			—			1
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			(3		)	(3		)
Repurchase of shares	(14.2	)	—		—		(1,300		)	—			—			(1,300		)	—			(1,300		)
Balance at March 31, 2020	400.0		$	4	$	12,203	$	7,007		$	(4,966	)	$	(3	)	$	14,245		$	43		$	14,288
Net income	—		—		—		51			—			—			51			3			54
Other comprehensive income, net of tax										157						157						157
Cash dividends paid	—		—		—		(292		)	—			—			(292		)	(1		)	(293		)
Issuance of shares under equity-based compensation plans	0.1		—		25		1			—			1			27			—			27
Changes in noncontrolling interest of consolidated subsidiaries - net	—		—		—		—			—			—			—			2			2
Balance at June 30, 2020	400.1		$	4	$	12,228	$	6,767		$	(4,809	)	$	(2	)	$	14,188		$	47		$	14,235

	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, 2019	423.6		$	4	$	12,090		$	8,161		$	(4,145	)	$	(3	)	$	16,107		$	35		$	16,142
Net income	—		—		—			522			—			—			522			—			522
Other comprehensive income, net of tax											67						67			—			67
Cash dividends paid and accrued	—		—		—			(309		)	—			—			(309		)	(1		)	(310		)
Issuance of shares under equity-based compensation plans	1.4		—		(5		)	1			—			—			(4		)	—			(4		)
Repurchase of shares	(1.9	)	—		—			(150		)	—			—			(150		)	—			(150		)
Balance at March 31, 2019	423.1		$	4	$	12,085		$	8,225		$	(4,078	)	$	(3	)	$	16,233		$	34		$	16,267
Net income	—		—		—			636			—			—			636			—			636
Other comprehensive loss, net of tax	—										(30		)				(30		)				(30		)
Cash dividends paid	—		—		—			(300		)	—			—			(300		)	(1		)	(301		)
Issuance of shares under equity-based compensation plans	0.1		—		27			(1		)	—			1			27			—			27
Acquisition of a business	—		—		—			—			—			—			—			51			51
Acquisition of noncontrolling interest obtained through tender offer	—		—		—			—			—			—			—			(29		)	(29		)
Repurchase of Shares	(3.2	)	—		—			(260		)	—			—			(260		)	—			(260		)
Balance at June 30, 2019	420.0		$	4	$	12,112		$	8,300		$	(4,108	)	$	(2	)	$	16,306		$	55		$	16,361

Schedule of Accumulated Other Comprehensive Loss

The changes in Accumulated other comprehensive loss follow:

	Currency translation and related hedging instruments			Pensions and other postretirement benefits			Cash flow hedges			Total
Balance at January 1, 2020	$	(2,848	)	$	(1,408	)	$	(34	)	$	(4,290	)
Other comprehensive (loss) income    before reclassifications	(530		)	23			(143		)	(650		)
Amounts reclassified from Accumulated other    comprehensive loss	37			89			5			131
Net current-period Other comprehensive    (loss) income	(493		)	112			(138		)	(519		)
Balance at June 30, 2020	$	(3,341	)	$	(1,296	)	$	(172	)	$	(4,809	)

Reclassification Out of Accumulated Other Comprehensive Loss

The reclassifications out of Accumulated other comprehensive loss follow:

	Six months ended June 30, 2020				Consolidated statements of income classification
Currency translation losses
Sale of business	$	(37	)		Gain on sale of business
Tax expense	—
Total, net of tax	(37		)
Amortization of defined benefit pensions and other postretirement benefits items
Actuarial loss and prior service cost	(115		)	1
Tax benefit	26
Total, net of tax	(89		)
Gains and (losses) on cash flow hedges
Currency exchange contracts	(6		)		Net sales and Cost of products sold
Tax benefit	1
Total, net of tax	(5		)
Total reclassifications for the period	$	(131	)

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 pension and other postretirement benefits items.

Calculation of Net Income Per Ordinary Share Attributable to Shareholders

A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:

	Three months ended June 30				Six months ended June 30
(Shares in millions)	2020		2019		2020		2019
Net income attributable to Eaton ordinary shareholders	$	51	$	636	$	489	$	1,158
Weighted-average number of ordinary shares outstanding - diluted	401.3		423.1		406.2		424.5
Less dilutive effect of equity-based compensation	0.9		1.5		1.4		1.7
Weighted-average number of ordinary shares outstanding - basic	400.4		421.6		404.8		422.8
Net income per share attributable to Eaton ordinary shareholders
Diluted	$	0.13	$	1.50	$	1.20	$	2.73
Basic	0.13		1.51		1.21		2.74

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020

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:

	Total			Level 1		Level 2			Level 3
June 30, 2020
Cash	$	292		$	292	$	—		$	—
Short-term investments	204			204		—			—
Net derivative contracts	(75		)	—		(75		)	—
December 31, 2019
Cash	$	370		$	370	$	—		$	—
Short-term investments	221			221		—			—
Net derivative contracts	53			—		53			—

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments Recognized in Condensed Consolidated Balance Sheet

The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets follows:

	Notional amount		Other  current assets		Other noncurrent assets		Other current liabilities		Other noncurrent liabilities		Type of hedge	Term
June 30, 2020
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	5	$	121	$	—	$	—	Fair value	6 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	850		—		3		—		178		Cash flow	33 years
Currency exchange contracts	1,031		9		1		37		12		Cash flow	1 to 36 months
Commodity contracts	13		1		—		—		—		Cash flow	1 to 10 months
Total			$	15	$	125	$	37	$	190
Derivatives not designated as  hedges
Currency exchange contracts	$	4,354	$	30			$	19				1 to 12 months
Commodity contracts	7		1				—					1 month
Total			$	31			$	19
December 31, 2019
Derivatives designated as hedges
Fixed-to-floating interest rate  swaps	$	2,225	$	—	$	57	$	—	$	—	Fair value	12 months to 15 years
Forward starting floating-to-fixed  interest rate swaps	500		—		3		—		42		Cash flow	13 to 33 years
Currency exchange contracts	1,146		14		3		11		6		Cash flow	1 to 36 months
Commodity contracts	9		—		—		—		—		Cash flow	1 to 9 months
Total			$	14	$	63	$	11	$	48
Derivatives not designated as  hedges
Currency exchange contracts	$	4,975	$	48			$	13				1 to 12 months
Commodity contracts	3		—				—					1 month
Total			$	48			$	13

Schedule of Notional Amounts of Outstanding Derivative Positions

As of June 30, 2020, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:

Commodity	June 30, 2020		Term
Copper	5	millions of pounds	1 to 10 months
Gold	622	Troy ounces	1 to 3 months

Schedule Of Derivative Instruments Recorded In Balance Sheet

The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:

	Carrying amount of the hedged assets (liabilities)						Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a)
Location on Consolidated Balance Sheets	June 30, 2020			December 31, 2019			June 30, 2020			December 31, 2019
Long-term debt	$	(2,838	)	$	(2,838	)	$	(164	)	$	(97	)

^(a) At June 30, 2020 and December 31, 2019, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $38 and $40, respectively.

Schedule of Impact of Hedging Activities to Consolidated Statement of Income

The impact of hedging activities to the Consolidated Statements of Income are as follow:

	Three months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	3,856		$	2,877		$	38
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	4		$	—
Derivative designated as hedging instrument	(5		)	(4		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(1	)
Derivative designated as hedging instrument	—			—			1

	Three months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	5,533		$	3,697		$	50
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	2		$	(4	)	$	—
Derivative designated as hedging instrument	(2		)	4			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(40	)
Derivative designated as hedging instrument	—			—			40

	Six months ended June 30, 2020
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	8,645		$	6,179		$	72
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	1		$	—
Derivative designated as hedging instrument	(5		)	(1		)	—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(69	)
Derivative designated as hedging instrument	—			—			69

	Six months ended June 30, 2019
	Net Sales			Cost of products sold			Interest expense - net
Amounts from Consolidated Statements of Income	$	10,838		$	7,270		$	110
Gain (loss) on derivatives designated as cash flow hedges
Currency exchange contracts
Hedged item	$	5		$	(9	)	$	—
Derivative designated as hedging instrument	(5		)	9			—
Commodity contracts
Hedged item	$	—		$	—		$	—
Derivative designated as hedging instrument	—			—			—
Gain (loss) on derivatives designated as fair value hedges
Fixed-to-floating interest rate swaps
Hedged item	$	—		$	—		$	(63	)
Derivative designated as hedging instrument	—			—			63

Amounts Recognized in Net Income

The impact of derivatives not designated as hedges to the Consolidated Statements of Income are as follow:

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Three months ended June 30
	2020		2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	46	$	8		Interest expense - net
Commodity Contracts	1		(1		)	Cost of products sold
Total	$	47	$	7

	Gain (loss) recognized in Consolidated Statements of Income					Consolidated Statements of Income classification
	Six months ended June 30
	2020			2019
Gain (loss) on derivatives not designated as hedges
Currency exchange contracts	$	(103	)	$	48	Interest expense - net
Commodity Contracts	1			—		Cost of products sold
Total	$	(102	)	$	48

Amounts Recognized in Accumulated Other Comprehensive Loss

The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income follow:

	Gain (loss) recognized in other comprehensive (loss) income						Location of gain (loss) reclassified from Accumulated other comprehensive loss	Gain (loss) reclassified from Accumulated other comprehensive loss
	Three months ended June 30							Three months ended June 30
	2020			2019				2020			2019
Derivatives designated as    cash flow hedges
Forward starting floating-to-fixed  interest rate swaps	$	11		$	(18	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(3		)	(10		)	Net sales and Cost of products sold	(9		)	2
Commodity contracts	3			(2		)	Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	(38		)	—			Interest expense - net	—			—
Total	$	(27	)	$	(30	)		$	(9	)	$	2
	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
	Six months ended June 30							Six months ended June 30
	2020			2019				2020			2019
Derivatives designated as cash flow hedges
Forward starting floating-to-fixed interest rate swaps	$	(136	)	$	(27	)	Interest expense - net	$	—		$	—
Currency exchange contracts	(45		)	(10		)	Net sales and Cost of products sold	(6		)	4
Commodity contracts	1			—			Cost of products sold	—			—
Non-derivative designated as net    investment hedges
Foreign currency denominated debt	5			12			Interest expense - net	—			—
Total	$	(175	)	$	(25	)		$	(6	)	$	4

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RESTRUCTURING CHARGES (Tables)

6 Months Ended

Jun. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring Program Charges

A summary of restructuring program charges by type follows:

	Three months ended June 30, 2020
Workforce reductions	$	166
Plant closing and other	21
Total	$	187

Restructuring program charges related to the following segments:

	Three months ended June 30, 2020
Electrical Americas	$	13
Electrical Global	51
Aerospace	30
Vehicle	90
eMobility	1
Corporate	2
Total	$	187

Summary of Liabilities Related to Restructuring

A summary of liabilities related to workforce reductions, plant closing and other associated costs follows:

	Workforce reductions			Plant closing and other			Total
Balance at December 31, 2019	$	—		$	—		$	—
Liability recognized	166			21			187
Payments, utilization and translation	(9		)	(21		)	(30		)
Balance at June 30, 2020	$	157		$	—		$	157

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BUSINESS SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Business Segment Information

	Three months ended June 30						Six months ended June 30
	2020			2019			2020			2019
Net sales
Electrical Americas	$	1,490		$	2,085		$	3,278		$	4,046
Electrical Global	1,111			1,324			2,255			2,566
Hydraulics	411			603			918			1,208
Aerospace	461			634			1,141			1,238
Vehicle	327			803			925			1,613
eMobility	56			84			128			167
Total net sales	$	3,856		$	5,533		$	8,645		$	10,838
Segment operating profit (loss)
Electrical Americas	$	308		$	404		$	616		$	738
Electrical Global	178			233			344			423
Hydraulics	37			53			92			112
Aerospace	68			155			215			292
Vehicle	(21		)	136			60			258
eMobility	(2		)	7			(1		)	12
Total segment operating profit	568			988			1,326			1,835
Corporate
Amortization of intangible assets	(88		)	(94		)	(175		)	(187		)
Interest expense - net	(38		)	(50		)	(72		)	(110		)
Pension and other postretirement benefits expense	(12		)	(2		)	(20		)	(2		)
Restructuring program charges	(187		)	—			(187		)	—
Other expense - net	(196		)	(104		)	(204		)	(195		)
Income before income taxes	47			738			668			1,341
Income tax expense (benefit)	(7		)	102			176			183
Net income	54			636			492			1,158
Less net income for noncontrolling interests	(3		)	—			(3		)	—
Net income attributable to Eaton ordinary shareholders	$	51		$	636		$	489		$	1,158

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BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Gain on remeasurement of intercompany loans	$ 13	$ 19
Cash flow reclassifications		$ 122

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ACQUISITION AND DIVESTITURES OF BUSINESSES - Narrative (Details) - USD ($) $ in Millions					1 Months Ended	6 Months Ended	12 Months Ended
	Mar. 02, 2020	Dec. 31, 2019	Dec. 20, 2019	Apr. 15, 2019	Jul. 31, 2019	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jan. 21, 2020
Automotive Fluid Conveyance Business
Business Acquisition [Line Items]
Pre-tax (loss) gain		$ (66)
Lighting Business
Business Acquisition [Line Items]
Pre-tax (loss) gain	$ 221
Cash purchase price	$ 1,400
Sales							$ 1,600
Hydraulics business
Business Acquisition [Line Items]
Cash purchase price											$ 3,300
Sales							2,200
Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S.
Business Acquisition [Line Items]
Percent acquired				82.275%	93.70%
Sales for last 12 months										$ 126
Purchase price				$ 214
Purchase of additional shares					$ 33
Innovative Switchgear Solutions, Inc. (ISG)
Business Acquisition [Line Items]
Sales for last 12 months									$ 18
Souriau-Sunbank Connection Technologies
Business Acquisition [Line Items]
Sales for last 12 months								$ 363
Purchase price			$ 906
Sales						$ 138
Power Distribution, Inc.
Business Acquisition [Line Items]
Sales for last 12 months							$ 125

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ACQUISITION AND DIVESTITURES OF BUSINESSES - Assets and Liabilities Classified as Held for Sale (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets held for sale - current	$ 2,405	$ 1,377
Hydraulics business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash	2
Accounts receivable - net	325
Inventory	382
Prepaid expenses and other current assets	12
Net property, plant and equipment	462
Goodwill	907
Other intangible assets	248
Operating lease assets	48
Deferred income taxes	5
Other noncurrent assets	14
Assets held for sale - current	2,405
Accounts payable	198
Accrued compensation	22
Other current liabilities	108
Pension liabilities	72
Operating lease liabilities	28
Deferred income taxes	4
Other noncurrent liabilities	0
Liabilities held for sale - current	$ 432
Lighting Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash		0
Accounts receivable - net		220
Inventory		161
Prepaid expenses and other current assets		10
Net property, plant and equipment		155
Goodwill		470
Other intangible assets		330
Operating lease assets		25
Deferred income taxes		1
Other noncurrent assets		6
Assets held for sale - current		1,377
Accounts payable		184
Accrued compensation		7
Other current liabilities		102
Pension liabilities		3
Operating lease liabilities		17
Other noncurrent liabilities		13
Liabilities held for sale - current		$ 325

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REVENUE RECOGNITION - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) segment	Dec. 31, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Number of operating segments | segment	6
Accounts receivables from customers	$ 2,329	$ 3,090
Unbilled receivables	106	$ 101
Backlog of unsatisfied or partially satisfied obligations	$ 5,300
Backlog expected to be recognized in the next twelve months (as a percent)	87.00%

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REVENUE RECOGNITION - Schedule of Disaggregation of Sales (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Net sales	$ 3,856	$ 5,533	$ 8,645	$ 10,838
Electrical Americas
Disaggregation of Revenue [Line Items]
Net sales	1,490	2,085	3,278	4,046
Electrical Americas | Products
Disaggregation of Revenue [Line Items]
Net sales	439	948	1,163	1,854
Electrical Americas | Systems
Disaggregation of Revenue [Line Items]
Net sales	1,051	1,137	2,115	2,192
Electrical Global
Disaggregation of Revenue [Line Items]
Net sales	1,111	1,324	2,255	2,566
Electrical Global | Products
Disaggregation of Revenue [Line Items]
Net sales	598	715	1,255	1,411
Electrical Global | Systems
Disaggregation of Revenue [Line Items]
Net sales	513	609	1,000	1,155
Hydraulics
Disaggregation of Revenue [Line Items]
Net sales	411	603	918	1,208
Hydraulics | United States
Disaggregation of Revenue [Line Items]
Net sales	183	273	410	539
Hydraulics | Rest of World
Disaggregation of Revenue [Line Items]
Net sales	228	330	508	669
Aerospace
Disaggregation of Revenue [Line Items]
Net sales	461	634	1,141	1,238
Aerospace | Original Equipment Manufacturers
Disaggregation of Revenue [Line Items]
Net sales	199	302	524	592
Aerospace | Aftermarket
Disaggregation of Revenue [Line Items]
Net sales	149	214	369	425
Aerospace | Industrial and Other
Disaggregation of Revenue [Line Items]
Net sales	113	118	248	221
Vehicle
Disaggregation of Revenue [Line Items]
Net sales	327	803	925	1,613
Vehicle | Commercial
Disaggregation of Revenue [Line Items]
Net sales	166	425	458	856
Vehicle | Passenger and Light Duty
Disaggregation of Revenue [Line Items]
Net sales	161	378	467	757
eMobility
Disaggregation of Revenue [Line Items]
Net sales	$ 56	$ 84	$ 128	$ 167

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REVENUE RECOGNITION - Schedule of Changes in Deferred Revenue Liabilities (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Movement in Deferred Revenue [Roll Forward]
Beginning balance	$ 234	$ 248
Customer deposits and billings	464	440
Revenue recognized in the period	(459)	(440)
Translation	(1)	5
Deferred revenue reclassified to held for sale	(11)
Ending balance	$ 227	$ 253

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CREDIT LOSSES FOR RECEIVABLES (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Credit Loss [Abstract]
Allowance for credit losses	$ 46	$ 49

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INVENTORY (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 774	$ 986
Work-in-process	522	640
Finished goods	842	1,179
Total inventory	$ 2,138	$ 2,805

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GOODWILL (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) unit
Goodwill [Roll Forward]
Beginning balance	$ 13,456
Additions	119
Goodwill reclassified to held for sale	(907)
Translation	(171)
Ending balance	12,497
Electrical Americas
Goodwill [Roll Forward]
Beginning balance	6,352
Additions	110
Goodwill reclassified to held for sale	0
Translation	(29)
Ending balance	6,433
Electrical Global
Goodwill [Roll Forward]
Beginning balance	4,106
Additions	7
Goodwill reclassified to held for sale	0
Translation	(116)
Ending balance	3,997
Hydraulics
Goodwill [Roll Forward]
Beginning balance	921
Additions	0
Goodwill reclassified to held for sale	(907)
Translation	(14)
Ending balance	0
Aerospace
Goodwill [Roll Forward]
Beginning balance	1,706
Additions	2
Goodwill reclassified to held for sale	0
Translation	(10)
Ending balance	$ 1,698
Reporting units | unit	2
Vehicle
Goodwill [Roll Forward]
Beginning balance	$ 291
Additions	0
Goodwill reclassified to held for sale	0
Translation	(2)
Ending balance	289
eMobility
Goodwill [Roll Forward]
Beginning balance	80
Additions	0
Goodwill reclassified to held for sale	0
Translation	0
Ending balance	$ 80

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RETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pension plan | United States pension benefit expense
Retirement benefits plans expense
Service cost	$ 24	$ 23	$ 48	$ 46
Interest cost	26	34	52	68
Expected return on plan assets	(58)	(59)	(115)	(117)
Amortization	26	16	51	31
Total	18	14	36	28
Settlements, curtailments and special termination benefits	18	13	35	23
Total expense	36	27	71	51
Pension plan | Non-United States pension benefit expense
Retirement benefits plans expense
Service cost	18	15	36	29
Interest cost	11	14	22	29
Expected return on plan assets	(27)	(27)	(54)	(54)
Amortization	14	9	29	19
Total	16	11	33	23
Settlements, curtailments and special termination benefits	3	1	6	1
Total expense	19	12	39	24
Other postretirement benefits expense
Retirement benefits plans expense
Service cost	1	1	1	1
Interest cost	2	4	4	7
Expected return on plan assets	0	(1)	0	(1)
Amortization	(3)	(4)	(6)	(7)
Total	0	0	(1)	0
Settlements, curtailments and special termination benefits	0	0	0	0
Total expense	$ 0	$ 0	$ (1)	$ 0

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INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income tax rate, percent	15.10%	13.90%	26.40%	13.70%

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EQUITY - Narrative (Details) - 2019 Program - USD ($) shares in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Feb. 27, 2019
Class of Stock [Line Items]
Share repurchase program, authorized				$ 5,000,000,000
Ordinary shares purchased (in shares)	3.2	14.2	5.1
Shares repurchased	$ 260,000,000	$ 1,300,000,000	$ 410,000,000

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EQUITY - Changes in Shareholders' Equity (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 14,288	$ 16,133	$ 16,267	$ 16,142	$ 16,133	$ 16,142
Net income	54	438	636	522	492	1,158
Other comprehensive income (loss), net of tax	157	(676)	(30)	67	(519)	37
Cash dividends paid and accrued	(293)	(305)	(301)	(310)
Issuance of shares under equity-based compensation plans	27	1	27	(4)
Changes in noncontrolling interest of consolidated subsidiaries - net	2	(3)
Acquisition of a business			51
Acquisition of noncontrolling interest obtained through tender offer			(29)
Repurchase of shares		(1,300)	(260)	(150)
Ending balance	14,235	14,288	16,361	16,267	14,235	16,361
Ordinary shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 4	$ 4	$ 4	$ 4	$ 4	$ 4
Beginning balance, shares	400.0	413.3	423.1	423.6	413.3	423.6
Issuance of shares under equity-based compensation plans, shares	0.1	0.9	0.1	1.4
Repurchase of shares, shares		(14.2)	(3.2)	(1.9)
Ending balance	$ 4	$ 4	$ 4	$ 4	$ 4	$ 4
Ending balance, shares	400.1	400.0	420.0	423.1	400.1	420.0
Capital in excess of par value
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 12,203	$ 12,200	$ 12,085	$ 12,090	$ 12,200	$ 12,090
Issuance of shares under equity-based compensation plans	25	3	27	(5)
Ending balance	12,228	12,203	12,112	12,085	12,228	12,112
Retained earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	7,007	8,170	8,225	8,161	8,170	8,161
Net income	51	438	636	522
Cash dividends paid and accrued	(292)	(300)	(300)	(309)
Issuance of shares under equity-based compensation plans	1	(1)	(1)	1
Repurchase of shares		(1,300)	(260)	(150)
Ending balance	6,767	7,007	8,300	8,225	6,767	8,300
Accumulated other comprehensive loss
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(4,966)	(4,290)	(4,078)	(4,145)	(4,290)	(4,145)
Other comprehensive income (loss), net of tax	157	(676)	(30)	67
Ending balance	(4,809)	(4,966)	(4,108)	(4,078)	(4,809)	(4,108)
Shares held in trust
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	(3)	(2)	(3)	(3)	(2)	(3)
Issuance of shares under equity-based compensation plans	1	(1)	1
Ending balance	(2)	(3)	(2)	(3)	(2)	(2)
Eaton shareholders’ equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	14,245	16,082	16,233	16,107	16,082	16,107
Net income	51	438	636	522
Other comprehensive income (loss), net of tax	157	(676)	(30)	67
Cash dividends paid and accrued	(292)	(300)	(300)	(309)
Issuance of shares under equity-based compensation plans	27	1	27	(4)
Repurchase of shares		(1,300)	(260)	(150)
Ending balance	14,188	14,245	16,306	16,233	14,188	16,306
Noncontrolling interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	43	51	34	35	51	35
Net income	3		0
Cash dividends paid and accrued	(1)	(5)	(1)	(1)
Changes in noncontrolling interest of consolidated subsidiaries - net	2	(3)
Acquisition of a business			51
Acquisition of noncontrolling interest obtained through tender offer			(29)
Ending balance	$ 47	$ 43	$ 55	$ 34	$ 47	$ 55

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EQUITY - Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		$ (4,290)			$ (4,290)
Other comprehensive (loss) income before reclassifications					(650)
Amounts reclassified from Accumulated other comprehensive loss					131
Other comprehensive income (loss) attributable to Eaton ordinary shareholders	$ 157	(676)	$ (30)	$ 67	(519)	$ 37
Ending balance	(4,809)				(4,809)
Currency translation and related hedging instruments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(2,848)			(2,848)
Other comprehensive (loss) income before reclassifications					(530)
Amounts reclassified from Accumulated other comprehensive loss					37
Other comprehensive income (loss) attributable to Eaton ordinary shareholders					(493)
Ending balance	(3,341)				(3,341)
Pensions and other postretirement benefits
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(1,408)			(1,408)
Other comprehensive (loss) income before reclassifications					23
Amounts reclassified from Accumulated other comprehensive loss					89
Other comprehensive income (loss) attributable to Eaton ordinary shareholders					112
Ending balance	(1,296)				(1,296)
Cash flow hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(34)			(34)
Other comprehensive (loss) income before reclassifications					(143)
Amounts reclassified from Accumulated other comprehensive loss					5
Other comprehensive income (loss) attributable to Eaton ordinary shareholders					(138)
Ending balance	(172)				(172)
Accumulated other comprehensive loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(4,290)			(4,290)
Other comprehensive income (loss) attributable to Eaton ordinary shareholders	157	$ (676)	$ (30)	$ 67
Ending balance	$ (4,809)				$ (4,809)

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EQUITY - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sale of business	$ 0	$ 0	$ (221)	$ 0
Currency exchange contracts	2,877	3,697	6,179	7,270
Income tax expense (benefit)	$ (7)	$ 102	176	$ 183
Total reclassifications for the period			(131)
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period			(131)
Currency translation and related hedging instruments
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period			(37)
Currency translation and related hedging instruments | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Sale of business			(37)
Income tax expense (benefit)			0
Total reclassifications for the period			(37)
Amortization of defined benefit pensions and other postretirement benefits items | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Actuarial loss and prior service cost			(115)
Income tax expense (benefit)			26
Total reclassifications for the period			(89)
Gains and (losses) on cash flow hedges
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period			(5)
Gains and (losses) on cash flow hedges | Reclassification out of Accumulated Other Comprehensive Income | Currency exchange contracts
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Currency exchange contracts			(6)
Income tax expense (benefit)			1
Total reclassifications for the period			$ (5)

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EQUITY - Calculation of Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Calculation of net income per ordinary share attributable to ordinary shareholders
Net Income Attributable to Eaton ordinary shareholders	$ 51	$ 636	$ 489	$ 1,158
Weighted-average number of ordinary shares outstanding - diluted (shares)	401.3	423.1	406.2	424.5
Less dilutive effect of equity-based compensation (shares)	0.9	1.5	1.4	1.7
Weighted-average number of ordinary shares outstanding - basic (shares)	400.4	421.6	404.8	422.8
Net income per share attributable to Eaton ordinary shareholders
Diluted (usd per share)	$ 0.13	$ 1.50	$ 1.20	$ 2.73
Basic (usd per share)	$ 0.13	$ 1.51	$ 1.21	$ 2.74
Antidilutive shares excluded from net income per share (shares)	1.7	0.8	1.0	1.2

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FAIR VALUE MEASUREMENTS - Summary of Financial Instruments at Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Cash	$ 292	$ 370	$ 412	$ 283
Short-term investments	204	221
Net derivative contracts	(75)	53
Level 1
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Cash	292	370
Short-term investments	204	221
Net derivative contracts	0	0
Level 2
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Cash	0	0
Short-term investments	0	0
Net derivative contracts	(75)	53
Level 3
Fair Value, Assets Measured on Recurring Basis, Financial Statement Captions [Line Items]
Cash	0	0
Short-term investments	0	0
Net derivative contracts	$ 0	$ 0

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FAIR VALUE MEASUREMENTS - Other Fair Value Measurements (Details) - Level 2 - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Other Fair Value Measurements [Line Items]
Carrying value of long-term debt and current portion of long-term debt	$ 8,129	$ 8,067
Fair value of long-term debt and current portion of long-term debt	$ 8,944	$ 8,638

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Financial Instrument Recognized in the Consolidated Balance sheet (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Derivatives not designated as hedges
Percentage of intercompany balance sheet exposure	100.00%
Other current assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	$ 15	$ 14
Other noncurrent assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	125	63
Other current liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	37	11
Other noncurrent liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	190	48
Derivatives not designated as hedges | Other current assets
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, asset, at fair value	31	48
Derivatives not designated as hedges | Other current liabilities
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, liability, at fair value	19	13
Derivatives not designated as hedges | Currency exchange contracts
Derivatives designated as hedges
Notional amount	$ 4,354	$ 4,975
Derivatives not designated as hedges | Currency exchange contracts | Minimum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	1 month	1 month
Derivatives not designated as hedges | Currency exchange contracts | Maximum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	12 months	12 months
Derivatives not designated as hedges | Currency exchange contracts | Other current assets
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, asset, at fair value	$ 30	$ 48
Derivatives not designated as hedges | Currency exchange contracts | Other current liabilities
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, liability, at fair value	19	13
Derivatives not designated as hedges | Commodity contracts
Derivatives designated as hedges
Notional amount	7	3
Derivatives not designated as hedges | Commodity contracts | Other current assets
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, asset, at fair value	$ 1	$ 0
Derivatives not designated as hedges | Commodity contracts | Other current liabilities
Derivatives, Fair Value [Line Items]
Derivative, term of contract	1 month	1 month
Derivatives not designated as hedges
Derivative instruments not designated as hedging instruments, liability, at fair value	$ 0	$ 0
Non-derivative net investment hedge
Derivatives, Fair Value [Line Items]
Foreign currency note payable, noncurrent, after-tax	1,842	1,845
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps
Derivatives designated as hedges
Notional amount	$ 2,225	$ 2,225
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Minimum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	6 months	12 months
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Maximum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	15 years	15 years
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Other current assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	$ 5	$ 0
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Other noncurrent assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	121	57
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Other current liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	0	0
Fair value hedging | Derivatives designated as hedges | Fixed-to-floating interest rate swaps | Other noncurrent liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	$ 0	$ 0
Fair value hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps
Derivatives, Fair Value [Line Items]
Derivative, remaining maturity	33 years
Fair value hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Minimum
Derivatives, Fair Value [Line Items]
Derivative, remaining maturity		13 years
Fair value hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Maximum
Derivatives, Fair Value [Line Items]
Derivative, remaining maturity		33 years
Cash Flow Hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps
Derivatives designated as hedges
Notional amount	$ 850	$ 500
Cash Flow Hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Other current assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	0	0
Cash Flow Hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Other noncurrent assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	3	3
Cash Flow Hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Other current liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	0	0
Cash Flow Hedging | Derivatives designated as hedges | Forward starting floating-to-fixed interest rate swaps | Other noncurrent liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	178	42
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts
Derivatives designated as hedges
Notional amount	$ 1,031	$ 1,146
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Minimum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	1 month	1 month
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Maximum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	36 months	36 months
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Other current assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	$ 9	$ 14
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Other noncurrent assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	1	3
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Other current liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	37	11
Cash Flow Hedging | Derivatives designated as hedges | Currency exchange contracts | Other noncurrent liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	12	6
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts
Derivatives designated as hedges
Notional amount	$ 13	$ 9
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Minimum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	1 month	1 month
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Maximum
Derivatives, Fair Value [Line Items]
Derivative, term of contract	10 months	9 months
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Other current assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	$ 1	$ 0
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Other noncurrent assets
Derivatives designated as hedges
Derivative asset designated as hedging instrument	0	0
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Other current liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	0	0
Cash Flow Hedging | Derivatives designated as hedges | Commodity contracts | Other noncurrent liabilities
Derivatives designated as hedges
Derivative liability designated as hedging instrument	$ 0	$ 0

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Volume of Outstanding Commodity Contracts (Details) - Commodity contracts lb in Millions	6 Months Ended
	Jun. 30, 2020 ozt lb
Copper
Derivative [Line Items]
Derivative, outstanding commodity contract | lb	5
Copper | Minimum
Derivative [Line Items]
Derivative, term of contract	1 month
Copper | Maximum
Derivative [Line Items]
Derivative, term of contract	10 months
Gold
Derivative [Line Items]
Derivative, outstanding commodity contract | ozt	622
Gold | Minimum
Derivative [Line Items]
Derivative, term of contract	1 month
Gold | Maximum
Derivative [Line Items]
Derivative, term of contract	3 months

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Balance Sheet Related to Fixed-to-Floating Interest Rate Swaps (Details) - Long-term debt - Fixed-to-floating interest rate swaps - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Carrying amount of the hedged assets (liabilities)	$ (2,838)	$ (2,838)
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities)	(164)	(97)
Discontinued hedge, cumulative adjustment	$ (38)	$ (40)

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivatives on Consolidated Statement of Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Net sales	$ 3,856	$ 5,533	$ 8,645	$ 10,838
Cost of products sold	2,877	3,697	6,179	7,270
Interest expense - net	38	50	72	110
Cash Flow Hedging | Net Sales | Currency exchange contracts
Derivative [Line Items]
Gain (loss) on hedged item	5	2	5	5
Gain (loss) on hedging instrument	(5)	(2)	(5)	(5)
Cash Flow Hedging | Net Sales | Commodity contracts
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Cash Flow Hedging | Cost of products sold | Currency exchange contracts
Derivative [Line Items]
Gain (loss) on hedged item	4	(4)	1	(9)
Gain (loss) on hedging instrument	(4)	4	(1)	9
Cash Flow Hedging | Cost of products sold | Commodity contracts
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Cash Flow Hedging | Interest expense - net | Currency exchange contracts
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Cash Flow Hedging | Interest expense - net | Commodity contracts
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Fair value hedging | Net Sales | Fixed-to-floating interest rate swaps
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Fair value hedging | Cost of products sold | Fixed-to-floating interest rate swaps
Derivative [Line Items]
Gain (loss) on hedged item	0	0	0	0
Gain (loss) on hedging instrument	0	0	0	0
Fair value hedging | Interest expense - net | Fixed-to-floating interest rate swaps
Derivative [Line Items]
Gain (loss) on hedged item	(1)	(40)	(69)	(63)
Gain (loss) on hedging instrument	$ 1	$ 40	$ 69	$ 63

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivatives Not Designated as Hedges (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in Consolidated Statements of Income	$ 47	$ 7	$ (102)	$ 48
Currency exchange contracts | Interest expense - net
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in Consolidated Statements of Income	46	8	(103)	48
Commodity contracts | Cost of products sold
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in Consolidated Statements of Income	$ 1	$ (1)	$ 1	$ 0

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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recognized in Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Total, gain (loss) on derivative and net investment hedge recognized in other comprehensive (loss) income	$ (27)	$ (30)	$ (175)	$ (25)
Total, gain (loss) reclassified from Accumulated other comprehensive loss	(9)	2	(6)	4
Cash flow hedge loss to be reclassified within the next twelve months			27
Interest expense - net | Non-derivative designated as net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in other comprehensive (loss) income	(38)	0	5	12
Gain (loss) reclassified from Accumulated other comprehensive loss	0	0	0	0
Interest expense - net | Forward starting floating-to-fixed interest rate swaps | Derivatives designated as cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in other comprehensive (loss) income	11	(18)	(136)	(27)
Gain (loss) reclassified from Accumulated other comprehensive loss	0	0	0	0
Net sales and Cost of products sold | Currency exchange contracts | Derivatives designated as cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in other comprehensive (loss) income	(3)	(10)	(45)	(10)
Gain (loss) reclassified from Accumulated other comprehensive loss	(9)	2	(6)	4
Cost of products sold | Commodity contracts | Derivatives designated as cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in other comprehensive (loss) income	3	(2)	1	0
Gain (loss) reclassified from Accumulated other comprehensive loss	$ 0	$ 0	$ 0	$ 0

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RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2022	Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 187	$ 0		$ 187	$ 0
Total estimated charges	$ 280			$ 280
Expected
Restructuring Cost and Reserve [Line Items]
Restructuring charges			$ 33			$ 5	$ 55

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RESTRUCTURING CHARGES - Restructuring Program Charges (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 187	$ 0	$ 187	$ 0
Total business segments | Electrical Americas
Restructuring Cost and Reserve [Line Items]
Restructuring charges	13
Total business segments | Electrical Global
Restructuring Cost and Reserve [Line Items]
Restructuring charges	51
Total business segments | Aerospace
Restructuring Cost and Reserve [Line Items]
Restructuring charges	30
Total business segments | Vehicle
Restructuring Cost and Reserve [Line Items]
Restructuring charges	90
Total business segments | eMobility
Restructuring Cost and Reserve [Line Items]
Restructuring charges	1
Corporate
Restructuring Cost and Reserve [Line Items]
Restructuring charges	2
Workforce reductions
Restructuring Cost and Reserve [Line Items]
Restructuring charges	166		166
Plant closing and other
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 21		$ 21

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RESTRUCTURING CHARGES - Summary of Liabilities Related to Restructuring (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Restructuring Reserve [Roll Forward]
Balance at December 31, 2019			$ 0
Liability recognized	$ 187	$ 0	187	$ 0
Payments, utilization and translation			(30)
Balance at June 30, 2020	157		157
Workforce reductions
Restructuring Reserve [Roll Forward]
Balance at December 31, 2019			0
Liability recognized	166		166
Payments, utilization and translation			(9)
Balance at June 30, 2020	157		157
Plant closing and other
Restructuring Reserve [Roll Forward]
Balance at December 31, 2019			0
Liability recognized	21		21
Payments, utilization and translation			(21)
Balance at June 30, 2020	$ 0		$ 0

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BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	$ 3,856		$ 5,533		$ 8,645	$ 10,838
Interest expense - net	(38)		(50)		(72)	(110)
Pension and other postretirement benefits expense					(109)	(75)
Restructuring program charges	(187)		0		(187)	0
Other expense - net	(77)		10		(112)	14
Income before income taxes	47		738		668	1,341
Income tax expense (benefit)	(7)		102		176	183
Net income	54	$ 438	636	$ 522	492	1,158
Less net income for noncontrolling interests	(3)		0		(3)	0
Net income attributable to Eaton ordinary shareholders	51		636		489	1,158
Electrical Americas
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	1,490		2,085		3,278	4,046
Electrical Global
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	1,111		1,324		2,255	2,566
Hydraulics
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	411		603		918	1,208
Aerospace
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	461		634		1,141	1,238
Vehicle
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	327		803		925	1,613
eMobility
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	56		84		128	167
Total business segments
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	3,856		5,533		8,645	10,838
Segment operating profit (loss)	568		988		1,326	1,835
Total business segments | Electrical Americas
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	1,490		2,085		3,278	4,046
Segment operating profit (loss)	308		404		616	738
Restructuring program charges	(13)
Total business segments | Electrical Global
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	1,111		1,324		2,255	2,566
Segment operating profit (loss)	178		233		344	423
Restructuring program charges	(51)
Total business segments | Hydraulics
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	411		603		918	1,208
Segment operating profit (loss)	37		53		92	112
Total business segments | Aerospace
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	461		634		1,141	1,238
Segment operating profit (loss)	68		155		215	292
Restructuring program charges	(30)
Total business segments | Vehicle
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	327		803		925	1,613
Segment operating profit (loss)	(21)		136		60	258
Restructuring program charges	(90)
Total business segments | eMobility
Segment Reporting Information, Profit (Loss) [Abstract]
Net sales	56		84		128	167
Segment operating profit (loss)	(2)		7		(1)	12
Restructuring program charges	(1)
Corporate
Segment Reporting Information, Profit (Loss) [Abstract]
Amortization of intangible assets	(88)		(94)		(175)	(187)
Interest expense - net	(38)		(50)		(72)	(110)
Pension and other postretirement benefits expense	(12)		(2)		(20)	(2)
Restructuring program charges	(2)
Other expense - net	$ (196)		$ (104)		$ (204)	$ (195)