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Acquisitions and Sales of Businesses | 12 Months Ended
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Dec. 31, 2013
Acquistions and sale of businesses [Abstract] |
Business Combination Disclosure [Text Block] | ACQUISITIONS AND SALES OF BUSINESSES In 2012 and 2011, Eaton acquired businesses and entered into a joint venture in separate transactions for combined purchase prices totaling $13,796 and $325, respectively. The Consolidated Statements of Income include the results of these businesses from the dates of the transactions or formation. Cooper Industries plc On November 30, 2012, Eaton Corporation acquired Cooper Industries plc (Cooper) for a purchase price of $13,192. At the completion of the transaction, the holder of each Cooper common share received from Eaton $39.15 in cash and 0.77479 of an Eaton ordinary share. As a result of the transaction, based on the number of outstanding shares of Eaton Corporation and Cooper as of November 30, 2012, former Eaton Corporation and Cooper shareholders held approximately 73% and 27%, respectively, of Eaton's ordinary shares after giving effect to the acquisition. Cooper is a diversified global manufacturer of electrical products and systems, with brands including Bussmann electrical and electronic fuses; Crouse-Hinds and CEAG explosion-proof electrical equipment; Halo and Metalux lighting fixtures; and Kyle and McGraw-Edison power systems products. Cooper had annual sales of $5,409 for 2011. For segment reporting purposes, Cooper has been included in Electrical Products and Electrical Systems and Services business segments. See Note 14 for additional information about business segments. Eaton's management believes the acquisition of Cooper will provide substantial synergies including, but not limited to, enhanced operational cost efficiencies, incremental revenue opportunities, the acceleration of Eaton’s long-term growth potential through greater exposure to faster growing end markets, increased earnings and cash flow and better access to capital markets as a result of enhanced size and an expanded business line. Fair Value of Consideration Transferred The total purchase price for the acquisition of Cooper was $13,192, comprised of Eaton share consideration valued at $6,649 and cash consideration for Cooper shares of $6,474 and to settle certain Cooper equity-based compensation plans of $69, as follows:
Cooper shares outstanding as of November 30, 2012 | 163.6 |
Cooper shares issued pursuant to conversion of stock options and share units outstanding under Cooper equity-based compensation plans | 1.8 |
Total Cooper shares and share equivalents prior to transaction | 165.4 |
Exchange ratio per share | 0.77479 |
Total Eaton shares issued | 128.1 |
Weighted-average Eaton Corporation per share price on November 30, 2012 | $ | 51.91 |
Total value of Eaton shares issued | $ | 6,649 |
Total cash consideration paid at $39.15 per Cooper share and share equivalent | 6,474 |
Total cash consideration paid for equity-based compensation plans | 69 |
Total consideration | $ | 13,192 |
Purchase Price Allocation The acquisition of Cooper has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed be recognized at their respective fair values as of the acquisition date. For accounting purposes, Eaton has been treated as the acquirer in the transaction. The process for estimating the fair values of identifiable intangible assets and certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. The purchase price allocation below represents Cooper's opening balance sheet on November 30, 2012 which was initially reported in Eaton's Form 10-K for the year ended December 31, 2012 and updated by Exhibit 99.1 of Eaton's current report on Form 8-K filed on September 6, 2013. During the measurement period which ended November 30, 2013, opening balance sheet adjustments were made to finalize Eaton's preliminary fair value estimates related primarily to intangible assets, goodwill, certain property values, contingent liabilities and the related deferred tax impact. Eaton's consolidated balance sheet at December 31, 2012 has been adjusted to reflect the final purchase price allocation. The Company did not revise the Consolidated Statement of Income for the year ended December 31, 2012, as any adjustment was considered immaterial.
| November 30, 2012 (as previously reported) |  | Adjustments |  | November 30, 2012 (final adjusted)
Working capital accounts (1) | $ | 2,304 |  |  | $ | (18 | ) |  | $ | 2,286 |
Prepaid expenses and other current assets | 204 |  |  | 69 |  |  | 273 |
Property, plant and equipment | 885 |  |  | (40 | ) |  | 845 |
Investment in Apex Tool Group, LLC | 807 |  |  | (7 | ) |  | 800 |
Intangible assets | 5,250 |  |  | 119 |  |  | 5,369 |
Other assets | 35 |  |  | 30 |  |  | 65 |
Debt | (1,221 | ) |  | — |  |  | (1,221 | )
Accounts payable | (519 | ) |  | 3 |  |  | (516 | )
Other current liabilities | (673 | ) |  | (206 | ) |  | (879 | )
Other noncurrent liabilities | (2,185 | ) |  | (177 | ) |  | (2,362 | )
Total identifiable net assets | 4,887 |  |  | (227 | ) |  | 4,660 |
Goodwill | 8,305 |  |  | 227 |  |  | 8,532 |
Total consideration | $ | 13,192 |  |  | $ | — |  |  | $ | 13,192 |
(1) Working capital accounts include Cash, Short-term investments, Accounts receivable and Inventory. |  |  |  |
Goodwill has been allocated to the Electrical Products and Electrical Systems and Services segments. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce, which are further described above. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. See Note 4 for additional information about goodwill and other intangible assets. The estimated fair value of Accounts receivable is based on the historical gross contractual amount receivable as of the acquisition date and totals $955. Contingent liabilities assumed as part of the transaction total $419 and are included in Other current liabilities and Other noncurrent liabilities. These contingent liabilities are related to environmental, legal (including product liability claims) and tax matters. Contingent liabilities are recorded at fair value in purchase accounting, aside from those pertaining to uncertainty in income taxes which are an exception to the fair value basis of accounting. Legal matters, and certain environmental matters that are legal in nature, are recorded at the respective probable and estimable amount. Actual and Pro Forma Impact Eaton's Consolidated Financial Statements for the year ended December 31, 2012 include Cooper's results of operations from the date of acquisition on November 30, 2012 through December 31, 2012. Net sales and operating profit attributable to Cooper during this period and included in Eaton's Consolidated Financial Statements for the year ended December 31, 2012 total $470 and $66, respectively. The following unaudited pro forma information gives effect to Eaton's acquisition of Cooper as if the acquisition had occurred on January 1, 2012 and Cooper had been included in Eaton's consolidated results of operations for the year ended December 31, 2012.
| 2012
Net sales | $ | 21,792 |
Net income from continuing operations attributable to Eaton ordinary shareholders | 1,695 |
Diluted earnings per share from continuing operations | $ | 3.54 |
The historical consolidated financial information of Eaton and Cooper has been adjusted in the pro forma information to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable and (3) expected to have a continuing impact on the combined results. For pro forma purposes, the equity in income of Apex Tool Group, LLC has been excluded as this joint venture was sold on February 1, 2013. Acquisitions and Sales of Other Businesses In 2012 and 2011, Eaton acquired other businesses and entered into a joint venture in separate transactions. The Consolidated Statements of Income include the results of these businesses from the dates of the transactions or formation. These transactions and the related annual sales prior to acquisition are summarized below:
Acquired businesses and joint venture |  | Date of transaction |  | Business segment |  | Annual sales
Rolec Comercial e Industrial S.A. |  | September 28, 2012 |  | Electrical Systems and Services |  | $85 for the 12 months ended September 30, 2012
A Chilean manufacturer of integrated power assemblies and low- and medium-voltage switchgear, and a provider of engineering services serving mining and other heavy industrial applications in Chile and Peru. |  |  |
Jeil Hydraulics Co., Ltd. |  | July 6, 2012 |  | Hydraulics |  | $189 for 2011
A Korean manufacturer of track drive motors, swing drive motors, main control valves and remote control valves for the construction equipment market. |  |  |
Polimer Kaucuk Sanayi ve Pazarlama A.S. |  | June 1, 2012 |  | Hydraulics |  | $335 for 2011
A Turkish manufacturer of hydraulic and industrial hose for construction, mining, agriculture, oil and gas, manufacturing, food and beverage, and chemicals markets. This business sells its products under the SEL brand name. |  |  |
Acquired businesses and joint venture |  | Date of transaction |  | Business segment |  | Annual sales
Gycom Electrical Low-Voltage Power Distribution, Control and Automation |  | June 1, 2012 |  | Electrical Systems and Services |  | $24 for 2011
A Swedish electrical low-voltage power distribution, control and automation components business. |  |  |
E.A. Pedersen Company |  | December 29, 2011 |  | Electrical Systems and Services |  | $37 for 2011
A United States manufacturer of medium voltage switchgear, metal-clad switchgear, power control buildings and relay control panels primarily for the electrical utilities industry. |  |  |
IE Power, Inc. |  | August 31, 2011 |  | Electrical Systems and Services |  | $5 for 2010
A Canadian provider of high power inverters for a variety of mission-critical applications including solar, wind and battery energy storage. |  |  |
E. Begerow GmbH & Co. KG |  | August 15, 2011 |  | Hydraulics |  | $84 for 2010
A German system provider of advanced liquid filtration solutions. This business develops and produces technologically innovative filter media and filtration systems for food and beverage, chemical, pharmaceutical and industrial applications. |  |  |
ACTOM Low Voltage |  | June 30, 2011 |  | Electrical Systems and Services |  | $65 for the year ended May 31, 2011
A South African manufacturer and supplier of motor control components, engineered electrical distribution systems and uninterruptible power supply (UPS) systems. |  |  |
C.I. ESI de Colombia S.A. |  | June 2, 2011 |  | Electrical Products |  | $8 for 2010
A Colombian distributor of industrial electrical equipment and engineering services in the Colombian market, focused on oil and gas, mining, and industrial and commercial construction. |  |  |
Internormen Technology Group |  | May 12, 2011 |  | Hydraulics |  | $55 for 2010
A Germany-based manufacturer of hydraulic filtration and instrumentation with sales and distribution subsidiaries in China, the United States, India and Brazil. |  |  |
Eaton-SAMC (Shanghai) Aircraft Conveyance System Manufacturing Co., Ltd. |  | March 8, 2011 |  | Aerospace |  | Joint venture
A 49%-owned joint venture in China focusing on the design, development, manufacturing and support of fuel and hydraulic conveyance systems for the global civil aviation market. |  |  |
Tuthill Coupling Group |  | January 1, 2011 |  | Hydraulics |  | $35 for the year ended November 30, 2010
A United States based manufacturer of pneumatic and hydraulic quick coupling solutions and leak-free connectors used in industrial, construction, mining, defense, energy and power applications. |  |  |
Sale of Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions On January 20, 2014, Eaton announced it entered into an agreement to sell the Aerospace Power Distribution Management Solutions and Integrated Cockpit Solutions businesses to Safran for $270. The sale, which was approved by Eaton's Board of Directors, is subject to regulatory approvals and other customary closing conditions. The transaction is expected to close early in the second quarter of 2014. Sale of Apex Tool Group, LLC In July 2010, Cooper formed a joint venture, named Apex Tool Group, LLC (Apex), with Danaher Corporation (Danaher). On October 10, 2012, Cooper and Danaher announced they had entered into a definitive agreement to sell Apex to Bain Capital for approximately $1.6 billion subject to post-closing adjustments. On February 1, 2013, the sale of Apex was completed.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6996-128479 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7000-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4926-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4934-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7488404&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6910749&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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