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Equity
9 Months Ended
Sep. 30, 2011
Stockholders' Equity Note [Abstract] 
EQUITY
EQUITY
Eaton has a common share repurchase program (2007 Program) that authorizes the repurchase of 10 million common shares. During the first nine months of 2011, 8.3 million common shares were repurchased under the 2007 Program in the open market at a total cost of $343. On September 28, 2011, Eaton's Board of Directors approved a common share repurchase program (2011 Program) which replaced the 2007 Program and authorizes the purchase of up to 20 million shares, not to exceed an aggregate purchase price of $1.25 billion. The common shares are expected to be repurchased over time, depending on market conditions, the market price of common shares, capital levels and other considerations. No common shares were repurchased in the open market in the first nine months of 2010.
The changes in Shareholders’ equity follow:
 
Eaton
shareholders’
equity
 
Noncontrolling
interests
 
Total
equity
Balance at December 31, 2010
$
7,362

 
$
41

 
$
7,403

 
 
 
 
 
 
Net income
988

 
3

 
991

Other comprehensive loss
(67
)
 
—

 
(67
)
Total comprehensive income
921

 
3

 
924

Cash dividends paid
(348
)
 
(7
)
 
(355
)
Issuance of shares under equity-based compensation plans-net
131

 
—

 
131

Business divestiture
—

 
(14
)
 
(14
)
Repurchase of shares
(343
)
 
—

 
(343
)
Balance at September 30, 2011
$
7,723

 
$
23

 
$
7,746


Comprehensive (Loss) Income
Comprehensive (loss) income consists primarily of net income, foreign currency translation and related hedging instruments, changes in unrecognized costs of pension and other postretirement benefits, and changes in the effective portion of open derivative contracts designated as cash flow hedges. The following table summarizes the components of Comprehensive (loss) income:
 
Three months ended
September 30
 
Nine months ended
September 30
 
2011
 
2010
 
2011
 
2010
Net income
$
367

 
$
269

 
$
991

 
$
654

 
 
 
 
 
 
 
 
Foreign currency translation and related hedging instruments
(449
)
 
419

 
(111
)
 
(64
)
Pensions and other postretirement benefits
34

 
4

 
69

 
51

Cash flow hedges
(20
)
 
7

 
(25
)
 
(2
)
Other comprehensive (loss) income
(435
)
 
430

 
(67
)
 
(15
)
Total comprehensive (loss) income
(68
)
 
699

 
924

 
639

Adjustment for comprehensive income attributable to noncontrolling interests
(2
)
 
(1
)
 
(3
)
 
(5
)
Total Comprehensive (loss) income attributable to Eaton common shareholders
$
(70
)
 
$
698

 
$
921

 
$
634


Net Income per Common Share
A summary of the calculation of net income per common share attributable to common shareholders follows:
 
Three months ended
September 30
 
Nine months ended
September 30
(Shares in millions)
2011
 
2010
 
2011
 
2010
Net income attributable to Eaton common shareholders
$
365

 
$
268

 
$
988

 
$
649

 
 
 
 
 
 
 
 
Weighted-average number of common shares outstanding-diluted
341.9

 
340.6

 
344.4

 
340.1

Less dilutive effect of stock options and restricted stock awards
3.8

 
5.4

 
4.7

 
5.4

Weighted-average number of common shares outstanding-basic
338.1

 
335.2

 
339.7

 
334.7

 
 
 
 
 
 
 
 
Net income per common share
 
 
 
 
 
 
 
Diluted
$
1.07

 
$
0.78

 
$
2.86

 
$
1.90

Basic
1.07

 
0.80

 
2.90

 
1.93


For the third quarter and first nine months of 2011, 2.7 million and 1.1 million stock options, respectively, were excluded from the calculation of diluted net income per common share because the exercise price of the options exceeded the average market price of the common shares during the period and their effect, accordingly, would have been antidilutive. For the third quarter and first nine months of 2010, 7.0 million and 8.8 million stock options, respectively, were excluded from the calculation of diluted net income per common share because the exercise price of the options exceeded the average market price of the common shares during the period and their effect, accordingly, would have been antidilutive