(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) | ||||||||||||||||
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(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 | |||||||||||||||||||||||||||||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||||||||
Smaller reporting company | Emerging growth company | (Do not check if a smaller reporting company) |
TABLE OF CONTENTS | |||||
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Net sales | $ | $ | |||||||||
Cost of products sold | |||||||||||
Selling and administrative expense | |||||||||||
Research and development expense | |||||||||||
Interest expense - net | |||||||||||
Gain on sale of business | |||||||||||
Other income - net | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | |||||||||||
Less net income for noncontrolling interests | ( | ( | |||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ | |||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||
Diluted | $ | $ | |||||||||
Basic | |||||||||||
Weighted-average number of ordinary shares outstanding | |||||||||||
Diluted | |||||||||||
Basic | |||||||||||
Cash dividends declared per ordinary share | $ | $ |
Three months ended March 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Net income | $ | $ | |||||||||
Less net income for noncontrolling interests | ( | ( | |||||||||
Net income attributable to Eaton ordinary shareholders | |||||||||||
Other comprehensive income (loss), net of tax | |||||||||||
Currency translation and related hedging instruments | ( | ( | |||||||||
Pensions and other postretirement benefits | |||||||||||
Cash flow hedges | |||||||||||
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | ( | ||||||||||
Total comprehensive income attributable to Eaton ordinary shareholders | $ | $ |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable - net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment | |||||||||||
Land and buildings | |||||||||||
Machinery and equipment | |||||||||||
Gross property, plant and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Net property, plant and equipment | |||||||||||
Other noncurrent assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets | |||||||||||
Operating lease assets | |||||||||||
Deferred income taxes | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and shareholders’ equity | |||||||||||
Current liabilities | |||||||||||
Short-term debt | $ | $ | |||||||||
Current portion of long-term debt | |||||||||||
Accounts payable | |||||||||||
Accrued compensation | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Noncurrent liabilities | |||||||||||
Long-term debt | |||||||||||
Pension liabilities | |||||||||||
Other postretirement benefits liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other noncurrent liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Shareholders’ equity | |||||||||||
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 | |||||||||||
Total liabilities and equity | $ | $ |
Three months ended March 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile to net cash provided by operating activities | |||||||||||
Depreciation and amortization | |||||||||||
Deferred income taxes | ( | ||||||||||
Pension and other postretirement benefits expense | |||||||||||
Contributions to pension plans | ( | ( | |||||||||
Contributions to other postretirement benefits plans | ( | ( | |||||||||
Gain on sale of business | ( | ||||||||||
Changes in working capital | ( | ( | |||||||||
Other - net | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Capital expenditures for property, plant and equipment | ( | ( | |||||||||
Cash paid for acquisitions of businesses, net of cash acquired | ( | ( | |||||||||
Investments in associate companies | ( | ( | |||||||||
Purchases of short-term investments - net | ( | ( | |||||||||
Payments for settlement of currency exchange contracts not designated as hedges - net | ( | ||||||||||
Other - net | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Proceeds from borrowings | |||||||||||
Payments on borrowings | ( | ( | |||||||||
Short-term debt, net | |||||||||||
Cash dividends paid | ( | ( | |||||||||
Exercise of employee stock options | |||||||||||
Repurchase of shares | ( | ( | |||||||||
Employee taxes paid from shares withheld | ( | ( | |||||||||
Other - net | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of currency on cash | ( | ||||||||||
Less: Increase in cash classified as held for sale | ( | ||||||||||
Decrease in cash | ( | ( | |||||||||
Cash at the beginning of the period | |||||||||||
Cash at the end of the period | $ | $ |
(In millions) | Preliminary Allocation | Measurement Period Adjustments | Final Allocation | |||||||||||||||||
Short-term investments | $ | $ | — | $ | ||||||||||||||||
Accounts receivable | ( | |||||||||||||||||||
Inventory | ( | |||||||||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||||||||
Property, plant and equipment | ( | |||||||||||||||||||
Other intangible assets | ( | |||||||||||||||||||
Other assets | ||||||||||||||||||||
Accounts payable | ( | — | ( | |||||||||||||||||
Other current liabilities | ( | ( | ( | |||||||||||||||||
Other noncurrent liabilities | ( | ( | ( | |||||||||||||||||
Total identifiable net assets | ( | |||||||||||||||||||
Goodwill | ||||||||||||||||||||
Total consideration, net of cash received | $ | $ | $ |
(In millions) | January 5, 2022 | |||||||
Accounts receivable | $ | |||||||
Inventory | ||||||||
Prepaid expenses and other current assets | ||||||||
Property, plant and equipment | ||||||||
Other intangible assets | ||||||||
Other assets | ||||||||
Accounts payable | ( | |||||||
Other current liabilities | ( | |||||||
Other noncurrent liabilities | ( | |||||||
Total identifiable net assets | ||||||||
Goodwill | ||||||||
Total consideration, net of cash received | $ |
Three months ended March 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Electrical Americas | |||||||||||
Products | $ | $ | |||||||||
Systems | |||||||||||
Total | $ | $ | |||||||||
Electrical Global | |||||||||||
Products | $ | $ | |||||||||
Systems | |||||||||||
Total | $ | $ | |||||||||
Hydraulics | |||||||||||
United States | $ | $ | |||||||||
Rest of World | |||||||||||
Total | $ | $ | |||||||||
Aerospace | |||||||||||
Original Equipment Manufacturers | $ | $ | |||||||||
Aftermarket | |||||||||||
Industrial and Other | |||||||||||
Total | $ | $ | |||||||||
Vehicle | |||||||||||
Commercial | $ | $ | |||||||||
Passenger and Light Duty | |||||||||||
Total | $ | $ | |||||||||
eMobility | $ | $ | |||||||||
Total net sales | $ | $ |
(In millions) | Deferred Revenue | ||||
Balance at January 1, 2022 | $ | ||||
Customer deposits and billings | |||||
Revenue recognized in the period | ( | ||||
Translation | ( | ||||
Balance at March 31, 2022 | $ |
(In millions) | Deferred Revenue | ||||
Balance at January 1, 2021 | $ | ||||
Customer deposits and billings | |||||
Revenue recognized in the period | ( | ||||
Translation and other | ( | ||||
Balance at March 31, 2021 | $ |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods | |||||||||||
Total inventory | $ | $ |
(In millions) | January 1, 2022 | Additions | Translation | March 31, 2022 | |||||||||||||||||||
Electrical Americas | $ | $ | $ | $ | |||||||||||||||||||
Electrical Global | ( | ||||||||||||||||||||||
Aerospace | ( | ||||||||||||||||||||||
Vehicle | |||||||||||||||||||||||
eMobility | |||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
United States pension benefit expense (income) | Non-United States pension benefit expense (income) | Other postretirement benefits expense (income) | |||||||||||||||||||||||||||||||||
Three months ended March 31 | |||||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Interest cost | |||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Amortization | ( | ( | |||||||||||||||||||||||||||||||||
( | ( | ||||||||||||||||||||||||||||||||||
Settlements | |||||||||||||||||||||||||||||||||||
Total expense (income) | $ | ( | $ | ( | $ | $ | $ | $ |
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, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and accrued | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under equity-based compensation plans | — | ( | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | ( | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Ordinary shares | Capital in excess of par value | Retained earnings | Accumulated other comprehensive loss | Shares held in trust | Total Eaton shareholders' equity | Noncontrolling interests | Total equity | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Shares | Dollars | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and accrued | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares under equity-based compensation plans | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Changes in noncontrolling interest of consolidated subsidiaries - net | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of shares | ( | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(In millions) | Currency translation and related hedging instruments | Pensions and other postretirement benefits | Cash flow hedges | Total | |||||||||||||||||||
Balance at January 1, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive loss (income) | ( | ||||||||||||||||||||||
Net current-period Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance at March 31, 2022 | $ | ( | $ | ( | $ | $ | ( |
(In millions) | Three months ended March 31, 2022 | Consolidated statements of income classification | |||||||||
Amortization of defined benefit pensions and other postretirement benefits items | |||||||||||
Actuarial loss and prior service cost | $ | ( | 1 | ||||||||
Tax benefit | |||||||||||
Total, net of tax | ( | ||||||||||
Gains and (losses) on cash flow hedges | |||||||||||
Commodity contracts | Cost of products sold | ||||||||||
Tax expense | |||||||||||
Total, net of tax | |||||||||||
Total reclassifications for the period | $ | ( |
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ | |||||||||
Weighted-average number of ordinary shares outstanding - diluted | |||||||||||
Less dilutive effect of equity-based compensation | |||||||||||
Weighted-average number of ordinary shares outstanding - basic | |||||||||||
Net income per share attributable to Eaton ordinary shareholders | |||||||||||
Diluted | $ | $ | |||||||||
Basic |
(In millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
March 31, 2022 | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Net derivative contracts | |||||||||||||||||||||||
Contingent consideration from acquisition of Green Motion | ( | ( | |||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||||||||||
Short-term investments | |||||||||||||||||||||||
Net derivative contracts | |||||||||||||||||||||||
Contingent consideration from acquisition of Green Motion | ( | ( |
(In millions) | Notional amount | Other current assets | Other noncurrent assets | Other current liabilities | Other noncurrent liabilities | Type of hedge | Term | ||||||||||||||||||||||||||||||||||
March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | $ | $ | $ | $ | $ | Cash flow | |||||||||||||||||||||||||||||||||||
Currency exchange contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Commodity contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Derivatives designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Fixed-to-floating interest rate swaps | $ | $ | $ | $ | $ | Fair value | |||||||||||||||||||||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Commodity contracts | Cash flow | ||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedges | |||||||||||||||||||||||||||||||||||||||||
Currency exchange contracts | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Commodity contracts | |||||||||||||||||||||||||||||||||||||||||
Total | $ | $ |
Commodity | March 31, 2022 | Term | ||||||||||||||||||
Copper | Millions of pounds | |||||||||||||||||||
Gold | Troy ounces | |||||||||||||||||||
Silver | Troy ounces | |||||||||||||||||||
(In millions) | Carrying amount of the hedged assets (liabilities) | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a) | |||||||||||||||||||||
Location on Consolidated Balance Sheets | March 31, 2022 | December 31, 2021 | March 31, 2022 | December 31, 2021 | |||||||||||||||||||
Long-term debt | $ | ( | $ | ( | $ | ( | $ | ( |
Three months ended March 31, 2022 | |||||||||||||||||
(In millions) | Net sales | Cost of products sold | Interest expense - net | ||||||||||||||
Amounts from Consolidated Statements of Income | $ | $ | $ | ||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | |||||||||||||||||
Currency exchange contracts | |||||||||||||||||
Hedged item | $ | $ | ( | $ | |||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
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 | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
Three months ended March 31, 2021 | |||||||||||||||||
(In millions) | Net sales | Cost of products sold | Interest expense - net | ||||||||||||||
Amounts from Consolidated Statements of Income | $ | $ | $ | ||||||||||||||
Gain (loss) on derivatives designated as cash flow hedges | |||||||||||||||||
Currency exchange contracts | |||||||||||||||||
Hedged item | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ( | |||||||||||||||
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 | $ | $ | $ | ||||||||||||||
Derivative designated as hedging instrument | ( | ||||||||||||||||
Gain (loss) recognized in Consolidated Statements of Income | Consolidated Statements of Income classification | ||||||||||||||||
Three months ended March 31 | |||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Gain (loss) on derivatives not designated as hedges | |||||||||||||||||
Currency exchange contracts | $ | ( | $ | ( | Interest expense - net | ||||||||||||
Commodity Contracts | Cost of products sold | ||||||||||||||||
Total | $ | ( | $ | ( | |||||||||||||
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 March 31 | Three months ended March 31 | ||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||||||||||||||
Forward starting floating-to-fixed interest rate swaps | $ | $ | Interest expense - net | $ | $ | ||||||||||||||||||||||||
Currency exchange contracts | ( | Net sales and Cost of products sold | ( | ||||||||||||||||||||||||||
Commodity contracts | Cost of products sold | ||||||||||||||||||||||||||||
Non-derivative designated as net investment hedges | |||||||||||||||||||||||||||||
Foreign currency denominated debt | Interest expense - net | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( |
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Workforce reductions | $ | $ | |||||||||
Plant closing and other | |||||||||||
Total before income taxes | |||||||||||
Income tax benefit | |||||||||||
Total after income taxes | $ | $ | |||||||||
Per ordinary share - diluted | $ | $ |
Three months ended March 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Electrical Americas | $ | $ | |||||||||
Electrical Global | |||||||||||
Aerospace | |||||||||||
Vehicle | |||||||||||
Corporate | |||||||||||
Total | $ | $ |
(In millions) | Workforce reductions | Plant closing and other | Total | ||||||||||||||
Balance at January 1, 2020 | $ | $ | $ | ||||||||||||||
Liability recognized | |||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ||||||||||||||
Liability recognized | |||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Liability recognized | |||||||||||||||||
Payments, utilization and translation | ( | ( | ( | ||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ||||||||||||||
Three months ended March 31 | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Net sales | |||||||||||
Electrical Americas | $ | $ | |||||||||
Electrical Global | |||||||||||
Hydraulics | |||||||||||
Aerospace | |||||||||||
Vehicle | |||||||||||
eMobility | |||||||||||
Total net sales | $ | $ | |||||||||
Segment operating profit (loss) | |||||||||||
Electrical Americas | $ | $ | |||||||||
Electrical Global | |||||||||||
Hydraulics | |||||||||||
Aerospace | |||||||||||
Vehicle | |||||||||||
eMobility | ( | ( | |||||||||
Total segment operating profit | |||||||||||
Corporate | |||||||||||
Intangible asset amortization expense | ( | ( | |||||||||
Interest expense - net | ( | ( | |||||||||
Pension and other postretirement benefits income | |||||||||||
Restructuring program charges | ( | ( | |||||||||
Other expense - net | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | |||||||||||
Less net income for noncontrolling interests | ( | ( | |||||||||
Net income attributable to Eaton ordinary shareholders | $ | $ |
Acquisitions of businesses and investments in associate companies | Date of acquisition | Business segment | ||||||||||||
Tripp Lite | March 17, 2021 | Electrical Americas | ||||||||||||
A leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. | ||||||||||||||
Green Motion SA | March 22, 2021 | Electrical Global | ||||||||||||
A leading designer and manufacturer of electric vehicle charging hardware and related software. | ||||||||||||||
HuanYu High Tech | March 29, 2021 | Electrical Global | ||||||||||||
A 50 percent stake in HuanYu High Tech, a subsidiary of HuanYu Group that manufactures and markets low-voltage circuit breakers and contactors in China, and throughout the Asia-Pacific region. | ||||||||||||||
Mission Systems | June 1, 2021 | Aerospace | ||||||||||||
A leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. | ||||||||||||||
Jiangsu YiNeng Electric's busway business | June 25, 2021 | Electrical Global | ||||||||||||
A 50 percent stake in Jiangsu YiNeng Electric's busway business which manufactures and markets busway products in China. | ||||||||||||||
Royal Power Solutions | January 5, 2022 | eMobility | ||||||||||||
A manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. |
Divestiture of business | Date of divestiture | Business segment | ||||||||||||
Hydraulics business | August 2, 2021 | Hydraulics |
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Net sales | $ | 4,843 | $ | 4,692 | |||||||
Net income attributable to Eaton ordinary shareholders | 532 | 458 | |||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 1.33 | $ | 1.14 |
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Acquisition integration, divestiture charges and transaction costs | $ | 29 | $ | 46 | |||||||
Gain on the sale of the Hydraulics business | (24) | — | |||||||||
Total before income taxes | 5 | 46 | |||||||||
Income tax benefit | 1 | 9 | |||||||||
Total after income taxes | $ | 4 | $ | 37 | |||||||
Per ordinary share - diluted | $ | 0.01 | $ | 0.09 |
Three months ended March 31 | |||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||
Intangible asset amortization expense | $ | 128 | $ | 92 | |||||||
Income tax benefit | 29 | 22 | |||||||||
Total after income taxes | $ | 99 | $ | 70 | |||||||
Per ordinary share - diluted | $ | 0.25 | $ | 0.18 |
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions except for per share data) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 4,843 | $ | 4,692 | 3 | % | |||||||||||
Gross profit | 1,574 | 1,508 | 4 | % | |||||||||||||
Percent of net sales | 32.5 | % | 32.1 | % | |||||||||||||
Income before income taxes | 619 | 538 | 15 | % | |||||||||||||
Net income | 533 | 459 | 16 | % | |||||||||||||
Less net income for noncontrolling interests | (1) | (1) | |||||||||||||||
Net income attributable to Eaton ordinary shareholders | 532 | 458 | 16 | % | |||||||||||||
Excluding acquisition and divestiture charges, after-tax | 4 | 37 | |||||||||||||||
Excluding restructuring program charges, after-tax | 14 | 12 | |||||||||||||||
Excluding intangible asset amortization expense, after-tax | 99 | 70 | |||||||||||||||
Adjusted earnings | $ | 649 | $ | 577 | 12 | % | |||||||||||
Net income per share attributable to Eaton ordinary shareholders - diluted | $ | 1.33 | $ | 1.14 | 17 | % | |||||||||||
Excluding per share impact of acquisition and divestiture charges, after-tax | 0.01 | 0.09 | |||||||||||||||
Excluding per share impact of restructuring program charges, after-tax | 0.03 | 0.03 | |||||||||||||||
Excluding per share impact of intangible asset amortization expense, after-tax | 0.25 | 0.18 | |||||||||||||||
Adjusted earnings per ordinary share | $ | 1.62 | $ | 1.44 | 13 | % |
Changes in Net sales are summarized as follows: | Three months ended March 31 | |||||||
2022 | ||||||||
Organic growth | 10 | % | ||||||
Acquisitions of businesses | 6 | % | ||||||
Divestiture of business | (12) | % | ||||||
Foreign currency | (1) | % | ||||||
Total increase (decrease) in Net sales | 3 | % |
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 1,891 | $ | 1,622 | 17 | % | |||||||||||
Operating profit | $ | 361 | $ | 332 | 9 | % | |||||||||||
Operating margin | 19.1 | % | 20.5 | % | |||||||||||||
Changes in Net sales are summarized as follows: | Three months ended March 31 | ||||||||||||||||
2022 | |||||||||||||||||
Organic growth | 10 | % | |||||||||||||||
Acquisition of Tripp Lite | 7 | % | |||||||||||||||
Total increase (decrease) in Net sales | 17 | % | |||||||||||||||
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 1,437 | $ | 1,253 | 15 | % | |||||||||||
Operating profit | $ | 279 | $ | 213 | 31 | % | |||||||||||
Operating margin | 19.4 | % | 17.0 | % | |||||||||||||
Changes in Net sales are summarized as follows: | Three months ended March 31 | ||||||||||||||||
2022 | |||||||||||||||||
Organic growth | 18 | % | |||||||||||||||
Foreign currency | (3) | % | |||||||||||||||
Total increase (decrease) in Net sales | 15 | % | |||||||||||||||
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 718 | $ | 519 | 38 | % | |||||||||||
Operating profit | $ | 159 | $ | 96 | 66 | % | |||||||||||
Operating margin | 22.1 | % | 18.5 | % | |||||||||||||
Changes in Net sales are summarized as follows: | Three months ended March 31 | ||||||||||||||||
2022 | |||||||||||||||||
Organic growth | 15 | % | |||||||||||||||
Acquisition of Mission Systems | 25 | % | |||||||||||||||
Foreign currency | (2) | % | |||||||||||||||
Total increase (decrease) in Net sales | 38 | % | |||||||||||||||
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 671 | $ | 654 | 3 | % | |||||||||||
Operating profit | $ | 113 | $ | 113 | — | % | |||||||||||
Operating margin | 16.8 | % | 17.3 | % | |||||||||||||
Changes in Net sales are summarized as follows: | Three months ended March 31 | ||||||||||||||||
2022 | |||||||||||||||||
Organic growth | 3 | % | |||||||||||||||
Total increase (decrease) in Net sales | 3 | % |
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Net sales | $ | 126 | $ | 83 | 52 | % | |||||||||||
Operating profit (loss) | $ | (3) | $ | (7) | 57 | % | |||||||||||
Operating margin | (2.4) | % | (8.4) | % | |||||||||||||
Changes in Net sales are summarized as follows: | Three months ended March 31 | ||||||||||||||||
2022 | |||||||||||||||||
Organic growth | 7 | % | |||||||||||||||
Acquisition of Royal Power Solutions | 46 | % | |||||||||||||||
Foreign currency | (1) | % | |||||||||||||||
Total increase (decrease) in Net sales | 52 | % |
Three months ended March 31 | Increase (decrease) | ||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||
Intangible asset amortization expense | $ | 128 | $ | 92 | 39 | % | |||||||||||
Interest expense - net | 32 | 38 | (16) | % | |||||||||||||
Pension and other postretirement benefits income | (19) | (14) | 36 | % | |||||||||||||
Restructuring program charges | 18 | 16 | 13 | % | |||||||||||||
Other expense - net | 131 | 161 | (19) | % | |||||||||||||
Total corporate expense | $ | 290 | $ | 293 | (1) | % |
Three months ended March 31 | |||||||||||||||||
(In millions) | 2022 | 2021 | Change from 2021 | ||||||||||||||
Net cash provided by operating activities | $ | 42 | $ | 260 | $ | (218) | |||||||||||
Net cash used in investing activities | (762) | (2,201) | 1,439 | ||||||||||||||
Net cash provided by financing activities | 652 | 1,875 | (1,223) | ||||||||||||||
Effect of currency on cash | 8 | (11) | 19 | ||||||||||||||
Increase in cash classified as held for sale | — | (7) | 7 | ||||||||||||||
Total decrease in cash | $ | (60) | $ | (84) |
(In millions) | March 31, 2022 | December 31, 2021 | ||||||||||||
Current assets | $ | 3,264 | $ | 3,032 | ||||||||||
Noncurrent assets | 11,578 | 11,553 | ||||||||||||
Current liabilities | 4,944 | 3,950 | ||||||||||||
Noncurrent liabilities | 8,349 | 8,461 | ||||||||||||
Amounts due to subsidiaries that are non-issuers and non-guarantors - net | 16,621 | 18,006 | ||||||||||||
Three months ended March 31 | ||||||||||||||
(In millions) | 2022 | |||||||||||||
Net sales | $ | 2,550 | ||||||||||||
Sales to subsidiaries that are non-issuers and non-guarantors | 215 | |||||||||||||
Cost of products sold | 2,125 | |||||||||||||
Expense from subsidiaries that are non-issuers and non-guarantors - net | 89 | |||||||||||||
Net income | 42 |
Month | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) | ||||||||||||||||||||||
January | — | $ | — | — | $ | 1,972 | ||||||||||||||||||||
February | — | $ | — | — | $ | 5,000 | ||||||||||||||||||||
March | 584,539 | $ | 147.22 | 584,539 | $ | 4,914 | ||||||||||||||||||||
Total | 584,539 | $ | 147.22 | 584,539 |
3 (i) | |||||||||||
3 (ii) | |||||||||||
4.1 | |||||||||||
4.2 | |||||||||||
4.3 | |||||||||||
4.4 | |||||||||||
4.5 | |||||||||||
4.6 | |||||||||||
4.7 | |||||||||||
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 | ||||||||||
10.1 | |||||||||||
10.2 | |||||||||||
22 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
32.1 | |||||||||||
32.2 | |||||||||||
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. |
EATON CORPORATION plc | ||||||||||||||
Registrant | ||||||||||||||
Date: | May 3, 2022 | By: | /s/ Thomas B. Okray | |||||||||||
Thomas B. Okray | ||||||||||||||
Principal Financial Officer | ||||||||||||||
(On behalf of the registrant and as Principal Financial Officer) |
Date: | May 3, 2022 | /s/ Craig Arnold | |||||||||
Craig Arnold | |||||||||||
Principal Executive Officer |
Date: | May 3, 2022 | /s/ Thomas B. Okray | |||||||||
Thomas B. Okray | |||||||||||
Principal Financial Officer |
Date: | May 3, 2022 | /s/ Craig Arnold | |||||||||
Craig Arnold | |||||||||||
Principal Executive Officer |
Date: | May 3, 2022 | /s/ Thomas B. Okray | |||||||||
Thomas B. Okray | |||||||||||
Principal Financial Officer |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Statement [Abstract] | ||
Net sales | $ 4,843 | $ 4,692 |
Cost of products sold | 3,269 | 3,184 |
Selling and administrative expense | 790 | 795 |
Research and development expense | 165 | 148 |
Interest expense - net | 32 | 38 |
Gain on sale of business | 24 | 0 |
Other income - net | (8) | (11) |
Income before income taxes | 619 | 538 |
Income tax expense | 86 | 79 |
Net income | 533 | 459 |
Less net income for noncontrolling interests | (1) | (1) |
Net income attributable to Eaton ordinary shareholders | $ 532 | $ 458 |
Net income per share attributable to Eaton ordinary shareholders | ||
Diluted (USD per share) | $ 1.33 | $ 1.14 |
Basic (USD per share) | $ 1.33 | $ 1.15 |
Weighted-average number of ordinary shares outstanding | ||
Diluted (shares) | 401.8 | 400.9 |
Basic (shares) | 399.2 | 398.3 |
Cash dividends declared per ordinary share (USD per share) | $ 0.81 | $ 0.76 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 533 | $ 459 |
Less net income for noncontrolling interests | (1) | (1) |
Net income attributable to Eaton ordinary shareholders | 532 | 458 |
Other comprehensive income (loss), net of tax | ||
Currency translation and related hedging instruments | (62) | (172) |
Pensions and other postretirement benefits | 77 | 47 |
Cash flow hedges | 101 | 95 |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | 116 | (30) |
Total comprehensive income attributable to Eaton ordinary shareholders | $ 648 | $ 428 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Ordinary shares outstanding (shares) | 399.0 | 398.8 |
BASIS OF PRESENTATION |
3 Months Ended |
---|---|
Mar. 31, 2022 | |
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 2021 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. Certain prior year amounts have been reclassified to conform to the current year presentation.
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ACQUISITIONS AND DIVESTITURES OF BUSINESSES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS AND DIVESTITURES OF BUSINESSES | ACQUISITIONS AND DIVESTITURE OF BUSINESSES Acquisition of Tripp Lite On March 17, 2021, Eaton acquired Tripp Lite for $1.65 billion, net of cash received. Tripp Lite is a leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. Tripp Lite is reported within the Electrical Americas business segment. The acquisition of Tripp Lite has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. During the measurement period which ended in March 2022, opening balance sheet adjustments were made to finalize Eaton's fair value estimates based on the final valuations received, which are summarized in the table below. The measurement period adjustments did not have a material impact to the Consolidated Statements of Income.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Tripp Lite. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. The estimated fair values of the customer relationships, trademarks and technology intangible assets of $539 million, $33 million and $32 million, respectively, were determined using either the relief-from-royalty model or the multi-period excess earnings model, which are discounted cash flow models that rely on the Company's estimates. These estimates require judgment of future revenue growth rates, future margins, and the applicable weighted-average cost of capital used to discount those estimated cash flows. The weighted-average cost of capital is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The estimated useful lives for customer relationships, trademarks and technology intangible assets were 20 years, 15 years, and 5 years, respectively. See Note 6 for additional information about goodwill. Eaton's 2021 Condensed Consolidated Financial Statements include Tripp Lite’s results of operations, including sales of $26 million, from the date of acquisition through March 31, 2021. Acquisition of Mission Systems On June 1, 2021, Eaton acquired Mission Systems for $2.80 billion, net of cash received. Mission Systems is a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission Systems is reported within the Aerospace business segment. The acquisition of Mission Systems has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. There has not been a material change from the estimated fair values of the assets acquired and liabilities assumed presented in Note 2 to the Consolidated Financial Statements in the 2021 Form 10-K. Draft third-party valuations for Other intangible assets and Property, plant and equipment have been received. These preliminary estimates will be finalized in the second quarter of 2022 when our review of the third-party valuations are completed, further information becomes available and additional analyses are performed, and these differences could have a material impact on Eaton's preliminary purchase price allocation. Sale of Hydraulics business On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. According to the terms of the sales agreement, the Company finalized negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022. As a result of these negotiations, the Company recognized an additional pre-tax gain of $24 million. The business had sales of $1.3 billion in 2021 through the date of the sale. Acquisition of Royal Power Solutions On January 5, 2022, Eaton acquired Royal Power Solutions for $612 million, net of cash received. Royal Power Solutions is a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment. The acquisition of Royal Power Solutions has been accounted for using the acquisition method of accounting which requires the assets acquired and liabilities assumed be recognized at their respective fair values on the acquisition date. The table below summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed on the acquisition date. These preliminary estimates will continue to be revised during the measurement period as third-party valuations are received and finalized, further information becomes available and additional analyses are performed, and these differences could have a material impact on Eaton's preliminary purchase price allocation.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the anticipated synergies of acquiring Royal Power Solutions. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. Other intangible assets of $306 million are expected to include customer relationships, trademarks and technology. Given the timing of the acquisition, Eaton utilized a benchmarking approach based on similar acquisitions to determine the preliminary fair values for intangible assets. See Note 6 for additional information about goodwill. Eaton's 2022 Condensed Consolidated Financial Statements include Royal Power Solutions' results of operations, including segment operating profit of $5 million on sales of $38 million, from the date of acquisition through March 31, 2022.
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REVENUE RECOGNITION |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services. Sales are measured at the amount of consideration the Company expects to be paid in exchange for these products or services. The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (revenue recognized exceeds amount billed to the customer), and deferred revenue (advance payments and billings in excess of revenue recognized). Accounts receivable from customers were $3,216 million and $2,896 million at March 31, 2022 and December 31, 2021, 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 $194 million and $187 million at March 31, 2022 and December 31, 2021, respectively, and are recorded in Prepaid expenses and other current assets. The increase in unbilled receivables reflects higher revenue recognized from increased business activity in 2022. Changes in the deferred revenue liabilities are as follows:
Deferred revenue liabilities of $401 million and $395 million as of March 31, 2022 and December 31, 2021, respectively, were included in Other current liabilities with the remaining balance presented in Other noncurrent liabilities. A significant portion of open orders placed with Eaton are by original equipment manufacturers or distributors. These open orders are not considered firm as they have been historically subject to releases by customers. In measuring backlog of unsatisfied or partially satisfied obligations, only the amount of orders to which customers are firmly committed are included. Using this criterion, total backlog at March 31, 2022 was approximately $9.3 billion. At March 31, 2022, approximately 87% of this backlog is targeted for delivery to customers in the next twelve months and the rest thereafter.
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CREDIT LOSSES FOR RECEIVABLES |
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Mar. 31, 2022 | |
Credit Loss [Abstract] | |
CREDIT LOSSES FOR RECEIVABLES | CREDIT LOSSES FOR RECEIVABLES Receivables are exposed to credit risk based on the customers’ ability to pay which is influenced by, among other factors, their financial liquidity position. Eaton’s receivables are generally short-term in nature with a majority outstanding less than 90 days. Eaton performs ongoing credit evaluation of its customers and maintains sufficient allowances for potential credit losses. The Company evaluates the collectability of its receivables based on the length of time the receivable is past due, and any anticipated future write-off based on historic experience adjusted for market conditions. The Company's segments, supported by our global credit department, perform the credit evaluation and monitoring process to estimate and manage credit risk. The process includes an evaluation of credit losses for both the overall segment receivable and specific customer balances. The process also includes review of customer financial information and credit ratings, approval and monitoring of customer credit limits, and an assessment of market conditions. The Company may also require prepayment from customers to mitigate credit risk. Receivable balances are written off against an allowance for credit losses after a final determination of collectability has been made. Accounts receivable are net of an allowance for credit losses of $42 million at March 31, 2022 and December 31, 2021. The change in the allowance for credit losses includes expense and net write-offs, none of which are significant.
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INVENTORY |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORY | INVENTORY Inventory is carried at lower of cost or net realizable value. The components of inventory are as follows:
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GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL | GOODWILL Changes in the carrying amount of goodwill by segment are as follows:
The 2022 additions to goodwill relate primarily to the anticipated synergies of acquiring Royal Power Solutions. 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 |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS The components of retirement benefits expense (income) are as follows:
During 2020, the Company announced it was freezing its United States pension plans for its non-union employees. The freeze was effective January 1, 2021 for non-union U.S. employees whose retirement benefit was determined under a cash balance formula and is effective January 1, 2026 for non-union U.S. employees whose retirement benefit is determined under a final average pay formula. During the first quarter of 2022, the Company recognized settlement losses from lump-sum distributions of $14 million, and remeasured certain pension plans as a result of lump-sum distributions exceeding or expected to exceed the sum of service and interest costs for the year. These remeasurements resulted in increases of $32 million in pension assets, decreases of $15 million in pension liabilities, and decreases of $47 million in other comprehensive loss. The components of retirement benefits expense (income) other than service costs are included in Other income - net.
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LEGAL CONTINGENCIES |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL CONTINGENCIES | LEGAL CONTINGENCIESEaton is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations and indemnity claims, 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 Condensed Consolidated Financial Statements. |
INCOME TAXES |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rate for the first quarter of 2022 was expense of 13.9% compared to expense of 14.7% for the first quarter of 2021. The decrease in the effective tax rate in the first quarter of 2022 was primarily due to the excess tax benefits recognized for employee share-based payments in the first quarter of 2022. Brazil Tax Years 2005-2012 The Company has two Brazilian tax cases primarily relating to the amortization of certain goodwill generated from the acquisition of third-party businesses and corporate reorganizations. One case involves tax years 2005-2008 (Case 1), and the other involves tax years 2009-2012 (Case 2). Case 2 is proceeding on a more accelerated timeline than Case 1. For Case 2, the Company received a tax assessment in 2014 that included interest and penalties. In November 2019, the Company received an unfavorable result at the final tax administrative appeals level, resulting in an alleged tax deficiency of $29 million plus $107 million of interest and penalties (translated at the March 31, 2022 exchange rate). The Company is challenging this assessment in the judicial system and, on April 18, 2022, received an unfavorable decision at the first judicial level. On April 27, 2022, the Company filed a motion for clarification relating to that decision, which is currently pending with the court. The Company intends to continue its challenge of this assessment in the judicial system, including appealing the April 18, 2022 decision, if necessary. As previously disclosed for Case 1, the Company received a separate tax assessment alleging a tax deficiency of $35 million plus $115 million of interest and penalties (translated at the March 31, 2022 exchange rate), which the Company is challenging in the judicial system. This case is still pending resolution at the first judicial level. Both cases are expected to take several years to resolve through the Brazilian judicial system and require provision of certain assets as security for the alleged deficiencies. As of March 31, 2022, the Company pledged Brazilian real estate assets with net book value of $22 million and provided additional security in the form of bank secured bonds totaling $113 million and a cash deposit of $20 million (translated at the March 31, 2022 exchange rate). The Company believes that the final resolution of both of the assessments will not have a material impact on its condensed consolidated financial statements. The ultimate outcome of these matters cannot be predicted with certainty given the complex nature of tax controversies. Should the ultimate outcome of these matters deviate from our reasonable expectations, they may have a material adverse impact on the Company’s condensed consolidated financial statements. However, Eaton believes that its interpretations of tax laws and application of tax laws to its facts are correct.
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EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY On February 27, 2019, the Board of Directors adopted a share repurchase program for share repurchases up to $5.0 billion of ordinary shares (2019 Program). On February 23, 2022, the Board renewed the 2019 Program by providing authority for up to $5.0 billion in repurchases to be made during the three-year period commencing on that date (2022 Program). Under the 2022 Program, the ordinary shares are expected to be repurchased over time, depending on market conditions, the market price of ordinary shares, capital levels, and other considerations. During the three months ended March 31, 2022, 0.6 million ordinary shares were repurchased under the 2022 program in the open market at a total cost of $86 million. During the three months ended March 31, 2021, 0.5 million ordinary shares were repurchased under the 2019 Program in the open market at a total cost of $59 million. The changes in Shareholders’ equity are as follows:
The changes in Accumulated other comprehensive loss are as follows:
The reclassifications out of Accumulated other comprehensive loss are as follows:
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 is as follows:
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy is established, which categorizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:
Eaton values its financial instruments using an industry standard market approach, in which prices and other relevant information is generated by market transactions involving identical or comparable assets or liabilities. On March 22, 2021, Eaton acquired Green Motion SA, a leading designer and manufacturer of electric vehicle charging hardware and related software based in Switzerland. Green Motion SA was acquired for $106 million, including $49 million of cash paid at closing and $57 million of estimated fair value of contingent future consideration based on 2023 and 2024 revenue performance. The fair value of contingent consideration liabilities is estimated by discounting contingent payments expected to be made, and may increase or decrease based on changes in revenue estimates and discount rates, with a maximum possible undiscounted value of $109 million. Other Fair Value Measurements Long-term debt and the current portion of long-term debt had a carrying value of $8,491 million and fair value of $8,709 million at March 31, 2022 compared to $8,566 million and $9,232 million, respectively, at December 31, 2021. The fair value of Eaton's debt instruments were estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and is considered a Level 2 fair value measurement.
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES In the normal course of business, Eaton is exposed to certain risks related to fluctuations in interest rates, currency exchange rates and commodity prices. The Company uses various derivative and non-derivative financial instruments, primarily interest rate swaps, currency forward exchange contracts, currency swaps and 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 non-derivative net investment hedging instruments had a carrying value on an after-tax basis of $2,819 million at March 31, 2022 and $2,880 million at December 31, 2021. Derivative Financial Statement Impacts The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
The currency exchange contracts shown in the table above as derivatives not designated as hedges are primarily contracts entered into to manage currency volatility or exposure on intercompany receivables, payables and loans. While Eaton does not elect hedge accounting treatment for these derivatives, Eaton targets managing 100% of the intercompany balance sheet exposure to minimize the effect of currency volatility related to the movement of goods and services in the normal course of its operations. This activity represents the great majority of these currency exchange contracts. The cash flows resulting from the settlement of these derivatives have been classified in investing activities in the Condensed Consolidated Statement of Cash Flows. As of March 31, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:
The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:
(a) At March 31, 2022 and December 31, 2021, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $70 million and $33 million, respectively. The impact of hedging activities to the Consolidated Statements of Income is as follows:
The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:
The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows:
At March 31, 2022, a gain of $14 million of estimated unrealized net gains or losses associated with our cash flow hedges were expected to be reclassified to income from Accumulated other comprehensive loss within the next twelve months. These reclassifications relate to our designated foreign currency and commodity hedges that will mature in the next 12 months.
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RESTRUCTURING CHARGES |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING CHARGES | RESTRUCTURING CHARGES In the second quarter of 2020, Eaton decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company has incurred charges of $310 million. These restructuring activities are expected to incur additional expenses of $40 million in 2022 primarily comprised of plant closing and other costs, resulting in total estimated charges of $350 million for the entire program. A summary of restructuring program charges is as follows:
Restructuring program charges related to the following segments:
A summary of liabilities related to workforce reductions, plant closing and other associated costs is as follows:
These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other 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 |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision maker, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance. Eaton's operating segments are Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility. On August 2, 2021, Eaton completed the sale of the Hydraulics business. Operating profit includes the operating profit from intersegment sales. For additional information regarding Eaton's business segments, see Note 17 to the Consolidated Financial Statements contained in the 2021 Form 10-K.
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BASIS OF PRESENTATION (Policies) |
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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 2021 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. Certain prior year amounts have been reclassified to conform to the current year presentation.
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ACQUISITIONS AND DIVESTITURES OF BUSINESSES (Tables) |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
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REVENUE RECOGNITION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Sales | The following table provides disaggregated sales by lines of businesses, geographic destination, market channel or end market, as applicable, for the Company's operating segments:
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Schedule of Changes in Deferred Revenue Liabilities | Changes in the deferred revenue liabilities are as follows:
|
INVENTORY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventory | The components of inventory are as follows:
|
GOODWILL (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill by segment are as follows:
|
RETIREMENT BENEFIT PLANS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Retirement Benefits Expense | The components of retirement benefits expense (income) are as follows:
|
EQUITY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Shareholders' Equity | The changes in Shareholders’ equity are as follows:
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Schedule of Accumulated Other Comprehensive Loss | The changes in Accumulated other comprehensive loss are as follows:
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Schedule of Reclassifications of Accumulated Other Comprehensive Loss | The reclassifications out of Accumulated other comprehensive loss are as follows:
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.
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Schedule of Net Income per Ordinary Share Attributable to Shareholders | A summary of the calculation of net income per share attributable to Eaton ordinary shareholders is as follows:
|
FAIR VALUE MEASUREMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Recognized at Fair Value and Fair Value Measurements Used | A summary of financial instruments and contingent consideration recognized at fair value, and the fair value measurements used, is as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Financial Instruments Recognized in Condensed Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
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Schedule of Notional Amounts of Outstanding Derivative Positions | As of March 31, 2022, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:
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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:
(a) At March 31, 2022 and December 31, 2021, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $70 million and $33 million, respectively.
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Schedule of Impact of Hedging Activities to Consolidated Statement of Income | The impact of hedging activities to the Consolidated Statements of Income is as follows:
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Schedule of Amounts Recognized in Net Income | The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:
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Schedule of Amounts Recognized in Accumulated Other Comprehensive Income | The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows:
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RESTRUCTURING CHARGES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Program Charges | A summary of restructuring program charges is as follows:
Restructuring program charges related to the following segments:
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Schedule of Liabilities Related to Restructuring | A summary of liabilities related to workforce reductions, plant closing and other associated costs is as follows:
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BUSINESS SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Segment Information |
|
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Revenue from Contract with Customer [Abstract] | ||
Accounts receivables from customers | $ 3,216 | $ 2,896 |
Unbilled receivables | 194 | 187 |
Deferred revenue liabilities, included in other current liabilities | 401 | $ 395 |
Backlog of unsatisfied or partially satisfied obligations | $ 9,300 | |
Backlog expected to be recognized in the next twelve months (as a percent) | 87.00% |
REVENUE RECOGNITION - Changes in Deferred Revenue Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Movement in Deferred Revenue [Roll Forward] | ||
Balance at beginning of period | $ 422 | $ 257 |
Customer deposits and billings | 342 | 276 |
Revenue recognized in the period | (334) | (262) |
Translation | (2) | |
Translation and other | (3) | |
Balance at end of period | $ 428 | $ 268 |
CREDIT LOSSES FOR RECEIVABLES - Narrative (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Credit Loss [Abstract] | ||
Allowance for credit losses | $ 42 | $ 42 |
INVENTORY - Summary (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,219 | $ 1,096 |
Work-in-process | 783 | 620 |
Finished goods | 1,315 | 1,253 |
Total inventory | $ 3,317 | $ 2,969 |
GOODWILL - Summary (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 14,751 |
Additions | 299 |
Translation | (95) |
Balance at end of period | 14,955 |
Electrical Americas | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 7,417 |
Additions | 5 |
Translation | 6 |
Balance at end of period | 7,428 |
Electrical Global | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 4,183 |
Additions | 2 |
Translation | (65) |
Balance at end of period | 4,120 |
Aerospace | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 2,781 |
Additions | 8 |
Translation | (36) |
Balance at end of period | 2,753 |
Vehicle | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 290 |
Additions | 0 |
Translation | 0 |
Balance at end of period | 290 |
eMobility | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 80 |
Additions | 284 |
Translation | 0 |
Balance at end of period | $ 364 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Aug. 31, 2021 |
Nov. 30, 2019 |
|
Income Tax Examination [Line Items] | ||||
Effective income tax rate (benefit) expense (as a percent) | 13.90% | 14.70% | ||
Secretariat of the Federal Revenue Bureau of Brazil | ||||
Income Tax Examination [Line Items] | ||||
Alleged tax deficiency | $ 35 | |||
Income tax examination, penalties and interest accrued | $ 115 | |||
Net book value of pledged real estate assets | $ 22 | |||
Real estate bond | 113 | |||
Pledged cash deposit | $ 20 | |||
Secretariat of the Federal Revenue Bureau of Brazil | Tax Years 2005-2012 | ||||
Income Tax Examination [Line Items] | ||||
Alleged tax deficiency | $ 29 | |||
Income tax examination, penalties and interest accrued | $ 107 |
EQUITY - Narrative (Details) - USD ($) shares in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Feb. 23, 2022 |
Feb. 27, 2019 |
|
Class of Stock [Line Items] | ||||
Antidilutive shares excluded from net income per share (shares) | 0.1 | |||
2019 Program | ||||
Class of Stock [Line Items] | ||||
Share repurchase program, authorized amount | $ 5,000,000,000 | |||
Ordinary shares purchased (shares) | 0.5 | |||
Stock repurchased, value | $ 59,000,000 | |||
2022 Program | ||||
Class of Stock [Line Items] | ||||
Share repurchase program, authorized amount | $ 5,000,000,000 | |||
Ordinary shares purchased (shares) | 0.6 | |||
Stock repurchased, value | $ 86,000,000 |
EQUITY - Calculation of Net Income per Ordinary Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Calculation of net income per ordinary share attributable to ordinary shareholders | ||
Net Income Attributable to Eaton ordinary shareholders | $ 532 | $ 458 |
Weighted-average number of ordinary shares outstanding - diluted (shares) | 401.8 | 400.9 |
Less dilutive effect of equity-based compensation (shares) | 2.6 | 2.6 |
Weighted-average number of ordinary shares outstanding - basic (shares) | 399.2 | 398.3 |
Net income per share attributable to Eaton ordinary shareholders | ||
Diluted (USD per share) | $ 1.33 | $ 1.14 |
Basic (USD per share) | $ 1.33 | $ 1.15 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions |
Mar. 22, 2021 |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Contingent consideration from acquisition of Green Motion | $ 57 | $ 57 | |
Long-term debt and current portion of long term debt, carrying value | 8,491 | 8,566 | |
Long-term debt and current portion of long-term debt, fair value | $ 8,709 | $ 9,232 | |
Green Motion, SA | |||
Business Acquisition [Line Items] | |||
Total consideration to be transferred for acquisition | $ 106 | ||
Cash paid at closing | 49 | ||
Contingent consideration from acquisition of Green Motion | 57 | ||
Maximum potential payments based on future revenue performance | $ 109 |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Derivative [Line Items] | ||
Proportion of intercompany balance sheet exposure (as a percent) | 100.00% | |
Cash flow hedge gain to be reclassified within the next twelve months | $ 14 | |
Non-derivative net investment hedge | ||
Derivative [Line Items] | ||
Foreign currency note payable, noncurrent, after-tax | $ 2,819 | $ 2,880 |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Volume of Outstanding Commodity Contracts (Details) - Commodity contracts lb in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
ozt
lb
| |
Copper | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | lb | 10 |
Copper | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Copper | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 12 months |
Gold | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | 1,418 |
Gold | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Gold | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 12 months |
Silver | |
Derivative [Line Items] | |
Derivative, outstanding commodity contract | 560,367 |
Silver | Minimum | |
Derivative [Line Items] | |
Derivative, term of contract | 1 month |
Silver | Maximum | |
Derivative [Line Items] | |
Derivative, term of contract | 12 months |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Balance Sheet Related to Fixed-to-Floating Interest Rate Swaps (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Interest rate swap | ||
Derivative [Line Items] | ||
Carrying amount of the hedged assets (liabilities) | $ (2,413) | $ (2,413) |
Long-term debt | ||
Derivative [Line Items] | ||
Discontinued hedge, cumulative adjustment | 70 | 33 |
Long-term debt | Interest rate swap | ||
Derivative [Line Items] | ||
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) | $ (70) | $ (84) |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES - Impact of Derivatives Not Designated as Hedges (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | $ (7) | $ (61) |
Currency exchange contracts | Interest expense - net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | (8) | (63) |
Commodity contracts | Cost of products sold | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivatives not designated as hedges | $ 1 | $ 2 |
RESTRUCTURING CHARGES - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | 24 Months Ended | |||
---|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2022 |
|
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 18 | $ 16 | $ 78 | $ 214 | $ 310 | |
Estimated charges | $ 350 | $ 350 | ||||
Forecast | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 40 |
RESTRUCTURING CHARGES - Restructuring Program Charges (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2022 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Total before income taxes | $ 18 | $ 16 | $ 78 | $ 214 | $ 310 |
Income tax benefit | 4 | 4 | |||
Total after income taxes | $ 14 | $ 12 | |||
Per ordinary share - diluted (USD per share) | $ 0.03 | $ 0.03 | |||
Workforce reductions | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total before income taxes | $ 5 | $ 2 | 21 | 172 | |
Plant closing and other | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total before income taxes | $ 13 | $ 14 | $ 57 | $ 42 |
RESTRUCTURING CHARGES - Restructuring Program Charges Related to Segments (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2022 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 18 | $ 16 | $ 78 | $ 214 | $ 310 |
Operating segments | Electrical Americas | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 5 | 5 | |||
Operating segments | Electrical Global | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 5 | 2 | |||
Operating segments | Aerospace | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 3 | 1 | |||
Operating segments | Vehicle | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | 3 | 6 | |||
Corporate | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ 2 | $ 2 |
RESTRUCTURING CHARGES - Liabilities Related to Restructuring (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2022 |
|
Restructuring Reserve [Roll Forward] | |||||
Balance at beginning of period | $ 104 | $ 142 | $ 142 | $ 0 | |
Liability recognized | 18 | 16 | 78 | 214 | $ 310 |
Payments, utilization and translation | (26) | (116) | (72) | ||
Balance at end of period | 96 | 104 | 142 | 96 | |
Workforce reductions | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance at beginning of period | 96 | 139 | 139 | 0 | |
Liability recognized | 5 | 2 | 21 | 172 | |
Payments, utilization and translation | (12) | (64) | (33) | ||
Balance at end of period | 89 | 96 | 139 | 89 | |
Plant closing and other | |||||
Restructuring Reserve [Roll Forward] | |||||
Balance at beginning of period | 8 | 3 | 3 | 0 | |
Liability recognized | 13 | $ 14 | 57 | 42 | |
Payments, utilization and translation | (14) | (52) | (39) | ||
Balance at end of period | $ 7 | $ 8 | $ 3 | $ 7 |
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