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EATON SHAREHOLDERS' EQUITY | 12 Months Ended
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Dec. 31, 2021
Equity [Abstract] |
EATON SHAREHOLDERS' EQUITY | EATON SHAREHOLDERS' EQUITY There are 750 million Eaton ordinary shares authorized ($0.01 par value per share), 398.8 million and 398.1 million of which were issued and outstanding at December 31, 2021 and 2020, 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, 2021 and 2020, and 10 million serial preferred shares ($0.01 par value per share), none of which is outstanding at December 31, 2021 and 2020. At December 31, 2021, there were 10,447 holders of record of Eaton ordinary shares. Additionally, 14,835 current and former employees were shareholders through participation in the Eaton Savings Plan, the Eaton Personal Investment Plan, or the Eaton Puerto Rico Retirement Savings Plan. 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). Under the 2019 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 2021 and 2020, 0.9 million and 17.1 million ordinary shares, respectively, were repurchased under the 2019 Program in the open market at a total cost of $122 million and $1,608 million, respectively. 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). Eaton has deferral plans that permit certain employees and directors to defer a portion of their compensation. A trust contains $4 million and $3 million of ordinary shares and marketable securities at December 31, 2021 and 2020, 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 23, 2022, Eaton's Board of Directors declared a quarterly dividend of $0.81 per ordinary share, a 7% increase over the dividend paid in the fourth quarter of 2021. The dividend is payable on March 31, 2022 to shareholders of record on March 11, 2022. 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):
| 2021 |  | 2020 |  | 2019
(In millions) | Pre-tax |  | After-tax |  | Pre-tax |  | After-tax |  | Pre-tax |  | After-tax
Currency translation and related hedging instruments |  |  |  |  |  |  |  |  |  |  |
Gain (loss) from currency translation and related hedging instruments | $ | (335) |  |  | $ | (339) |  |  | $ | 154 |  |  | $ | 164 |  |  | $ | 15 |  |  | $ | 16 |
Translation reclassified to earnings | 369 |  |  | 369 |  |  | 37 |  |  | 37 |  |  | — |  |  | — |
| 34 |  |  | 30 |  |  | 191 |  |  | 201 |  |  | 15 |  |  | 16 |
Pensions and other postretirement benefits |  |  |  |  |  |  |  |  |  |  |
Prior service credit (cost) arising during the year | (1) |  |  | (1) |  |  | (1) |  |  | (1) |  |  | (2) |  |  | (2) |
Net gain (loss) arising during the year | 448 |  |  | 337 |  |  | (263) |  |  | (203) |  |  | (294) |  |  | (232) |
Currency translation | 24 |  |  | 19 |  |  | (48) |  |  | (37) |  |  | (16) |  |  | (13) |
Other | — |  |  | — |  |  | (2) |  |  | (1) |  |  | — |  |  | — |
Amortization of actuarial loss and prior service cost reclassified to earnings | 183 |  |  | 140 |  |  | 221 |  |  | 169 |  |  | 148 |  |  | 117 |
| 654 |  |  | 495 |  |  | (93) |  |  | (73) |  |  | (164) |  |  | (130) |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on derivatives designated as cash flow hedges | 50 |  |  | 39 |  |  | (60) |  |  | (47) |  |  | (33) |  |  | (27) |
Changes in cash flow hedges reclassified to earnings | (3) |  |  | (2) |  |  | 17 |  |  | 14 |  |  | (5) |  |  | (4) |
| 47 |  |  | 37 |  |  | (43) |  |  | (33) |  |  | (38) |  |  | (31) |
Other comprehensive income (loss) attributable to Eaton ordinary shareholders | $ | 735 |  |  | $ | 562 |  |  | $ | 55 |  |  | $ | 95 |  |  | $ | (187) |  |  | $ | (145) |
The changes in Accumulated other comprehensive loss are as follows:
(In millions) | Currency translation and related hedging instruments |  | Pensions and other postretirement benefits |  | Cash flow hedges |  | Total
Balance at January 1, 2021 | $ | (2,647) |  |  | $ | (1,481) |  |  | $ | (67) |  |  | $ | (4,195) |
Other comprehensive income (loss) before reclassifications | (339) |  |  | 355 |  |  | 39 |  |  | 55 |
Amounts reclassified from Accumulated other comprehensive loss (income) | 369 |  |  | 140 |  |  | (2) |  |  | 507 |
Net current-period Other comprehensive income | 30 |  |  | 495 |  |  | 37 |  |  | 562 |
Balance at December 31, 2021 | $ | (2,617) |  |  | $ | (986) |  |  | $ | (30) |  |  | $ | (3,633) |
The reclassifications out of Accumulated other comprehensive loss are as follows:
(In millions) |  | December 31, 2021 |  | Consolidated Statements of Income classification
Currency translation losses |  |  |  |
Sale of business |  | $ | (369) |  |  | Gain on sale of businesses
Tax benefit |  | — |  |  |
Total, net of tax |  | (369) |  |  |
Amortization of defined benefits pension and other postretirement benefits items |  |  |  |
Actuarial loss and prior service cost |  | (183) |  |  | 1
Tax benefit |  | 43 |  |  |
Total, net of tax |  | (140) |  |  |
Gains and (losses) on cash flow hedges |  |  |  |
Currency exchange contracts |  | (6) |  |  | Net sales and Cost of products sold
Commodity contracts |  | 9 |  |  | Cost of products sold
Tax expense |  | (1) |  |  |
Total, net of tax |  | 2 |  |  |
Total reclassifications for the period |  | $ | (507) |  |  |
1 These components of Accumulated other comprehensive loss are included in the computation of net periodic benefit cost. See Note 9 for additional information about defined benefits 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:
(In millions except for per share data) | 2021 |  | 2020 |  | 2019
Net income attributable to Eaton ordinary shareholders | $ | 2,144 |  |  | $ | 1,410 |  |  | $ | 2,211 |
Weighted-average number of ordinary shares outstanding - diluted | 401.6 |  |  | 404.0 |  |  | 420.8 |
Less dilutive effect of equity-based compensation | 2.9 |  |  | 1.8 |  |  | 1.8 |
Weighted-average number of ordinary shares outstanding - basic | 398.7 |  |  | 402.2 |  |  | 419.0 |
Net income per share attributable to Eaton ordinary shareholders |  |  |  |  |
Diluted | $ | 5.34 |  |  | $ | 3.49 |  |  | $ | 5.25 |
Basic | 5.38 |  |  | 3.51 |  |  | 5.28 |
In 2021, all stock options were included in the calculation of diluted net income per share attributable to Eaton ordinary shareholders because they were all dilutive. In 2020 and 2019, 0.6 million and 0.8 million of 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.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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