Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

EQUITY

EQUITY

The changes in Shareholders’ equity follow:

	Eaton shareholders’ equity			Noncontrolling interests			Total equity
Balance at December 31, 2011	$	7,469		$	23		$	7,492
Net income	1,038			2			1,040
Other comprehensive income	156			—			156
Cash dividends paid and accrued	(512		)	(3		)	(515		)
Issuance of shares under equity-based compensation plans-net	69			—			69
Balance at September 30, 2012	$	8,220		$	22		$	8,242

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)	2012		2011		2012		2011
Net income attributable to Eaton common shareholders	$	345	$	365	$	1,038	$	988
Weighted-average number of common shares outstanding-diluted	339.8		341.9		339.7		344.4
Less dilutive effect of stock options and restricted stock awards	2.2		3.8		3.0		4.7
Weighted-average number of common shares outstanding-basic	337.6		338.1		336.7		339.7
Net income per common share
Diluted	$	1.02	$	1.07	$	3.05	$	2.86
Basic	1.02		1.07		3.08		2.90

For the third quarter and first nine months of 2012, 4.2 million and 2.5 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 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.