v3.3.1.900
Eaton Shareholders' Equity
 12 Months Ended
Dec. 31, 2015
Equity [Abstract]  
Eaton Shareholders' Equity [Text Block]
EATON SHAREHOLDERS' EQUITY
There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 458.8 million and 467.9 million of which were issued and outstanding at December 31, 2015 and 2014, respectively. Eaton's Memorandum and Articles of Association authorized 40 thousand deferred ordinary shares (€1.00 par value per share) and 10 thousand preferred A shares ($1.00 par value per share), all of which were issued and outstanding at December 31, 2015 and 2014, and 10 million serial preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2015 and 2014. At December 31, 2015, there were 18,538 holders of record of Eaton ordinary shares. Additionally, 23,559 current and former employees were shareholders through participation in the Eaton Savings Plan, Eaton Personal Investment Plan, Eaton Puerto Rico Retirement Savings Plan.
On September 28, 2011, Eaton Corporation's Board of Directors adopted a common share repurchase program (2011 Program) which authorized the purchase of up to 20 million common shares, not to exceed an aggregate purchase price of $1.25 billion. During 2012, no common shares were repurchased under the 2011 Program. On April 24, 2013, the Company's shareholders authorized the Board of Directors to adopt an ordinary share repurchase program (the 2013 Program) for up to 40 million ordinary shares at prices between 70% and 120% of the closing price of Eaton's ordinary shares on the day preceding the day of purchase. On October 22, 2013, Eaton's Board of Directors adopted the 2013 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 2015 and 2014, 11.3 million and 9.6 million ordinary shares were repurchased under the 2013 Program in the open market at a total cost of $682 and $650, respectively. During 2013, no ordinary shares were repurchased under the 2013 Program.
Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $16 and $19 of ordinary shares and marketable securities, as valued at December 31, 2015 and 2014, respectively, to fund a portion of these liabilities. The marketable securities were included in Other assets and the ordinary shares were included in Shareholders' equity at historical cost.
On February 24, 2016, Eaton's Board of Directors declared a quarterly dividend of $0.57 per ordinary share, payable on March 18, 2016, to shareholders of record at the close of business on March 7, 2016.
Comprehensive Income (Loss)
Comprehensive income (loss) consists primarily of net income, 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 pre-tax and after-tax amounts recognized in Comprehensive income (loss):
 
2015
 
2014
 
2013
 
Pre-tax
 
After-tax
 
Pre-tax
 
After-tax
 
Pre-tax
 
After-tax
Currency translation and related hedging instruments
$
(1,080
)
 
$
(1,078
)
 
$
(1,014
)
 
$
(1,019
)
 
$
(30
)
 
$
(28
)
 
 
 
 
 
 
 
 
 
 
 
 
Pensions and other postretirement benefits
 
 
 
 
 
 
 
 
 
 
 
Prior service credit (cost) arising during the year
1

 
1

 
82

 
51

 
(6
)
 
(4
)
Net (loss) gain arising during the year
(123
)
 
(89
)
 
(718
)
 
(519
)
 
456

 
277

Currency translation
62

 
46

 
56

 
47

 
(5
)
 
(4
)
Other
—

 
(3
)
 
—

 
(4
)
 
2

 
16

Amortization of actuarial loss and prior service cost
   reclassified to earnings
237

 
156

 
168

 
110

 
229

 
144

 
177

 
111

 
(412
)
 
(315
)
 
676

 
429

 
 
 
 
 
 
 
 
 
 
 
 
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
 
Gain (loss) on derivatives designated as cash flow hedges
20

 
13

 
(3
)
 
(2
)
 
6

 
3

Changes in cash flow hedges reclassified to earnings
(16
)
 
(10
)
 
(5
)
 
(3
)
 
—

 
—

  Cash flow hedges, net of reclassification adjustments
4

 
3

 
(8
)
 
(5
)
 
6

 
3

Other comprehensive (loss) income attributable to Eaton
   ordinary shareholders
$
(899
)
 
$
(964
)
 
$
(1,434
)
 
$
(1,339
)
 
$
652

 
$
404


The changes in Accumulated other comprehensive loss follow:
 
Currency translation and related hedging instruments
 
Pensions and other postretirement benefits
 
Cash flow
hedges
 
Total
Balance at December 31, 2014
$
(1,414
)
 
$
(1,485
)
 
$
—

 
$
(2,899
)
Other comprehensive (loss) income before
    reclassifications
(1,078
)
 
(45
)
 
13

 
(1,110
)
Amounts reclassified from Accumulated other
   comprehensive loss (income)
—

 
156

 
(10
)
 
146

Net current-period Other comprehensive
   (loss) income
(1,078
)
 
111

 
3

 
(964
)
Balance at December 31, 2015
$
(2,492
)
 
$
(1,374
)
 
$
3

 
$
(3,863
)

The reclassifications out of Accumulated other comprehensive loss follow:
 
 
December 31, 2015
 
Consolidated Statements of
Income classification
Amortization of defined benefit pension and other
   postretirement benefits items
 
 
 
 
Actuarial loss and prior service cost
 
$
(237
)
 
1 
Tax benefit
 
81

 
 
Total, net of tax
 
(156
)
 
 
 
 
 
 
 
Gains and (losses) on cash flow hedges
 
 
 
 
Currency exchange contracts
 
16

 
Cost of products sold
Tax expense
 
(6
)
 
 
Total, net of tax
 
10

 
 
 
 
 
 
 
Total reclassifications for the period
 
$
(146
)
 
 
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 defined benefit pension and other postretirement benefits items.
Net Income Per Share Attributable to Eaton Ordinary Shareholders
A summary of the calculation of net income per share attributable to Eaton ordinary shareholders follows:
(Shares in millions)
2015
 
2014
 
2013
Net income attributable to Eaton ordinary shareholders
$
1,979

 
$
1,793

 
$
1,861

 
 
 
 
 
 
Weighted-average number of ordinary shares outstanding - diluted
467.1

 
476.8

 
476.7

Less dilutive effect of equity-based compensation
1.6

 
2.7

 
3.2

Weighted-average number of ordinary shares outstanding - basic
465.5

 
474.1

 
473.5

 
 
 
 
 
 
Net income per share attributable to Eaton ordinary shareholders
 
 
 
 
 
Diluted
$
4.23

 
$
3.76

 
$
3.90

Basic
4.25

 
3.78

 
3.93


In 2015, 2014, and 2013, 1.6 million, 0.5 million, and 0.2 million stock options, respectively, were excluded from the calculation of diluted net income per share attributable to Eaton ordinary shareholders because the exercise price of the options exceeded the average market price of the ordinary shares during the period and their effect, accordingly, would have been antidilutive.