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Eaton Third Quarter Operating Earnings Up 48 Percent Over 2012

Financial Results

The company’s comparative financial results for the three months ended September 30, 2013 are available on the company’s website, www.eaton.com.

               
 
 
EATON CORPORATION plc
CONSOLIDATED STATEMENTS OF INCOME
 
  Three months endedSeptember 30     Nine months endedSeptember 30
 
(In millions except for per share data) 2013 2012 2013 2012
Net sales $ 5,607 $ 3,950 $ 16,519 $ 11,978
 
Cost of products sold 3,883 2,747 11,488 8,316
Selling and administrative expense 967 687 2,885 2,079
Research and development expense 166 102 479 313
Interest expense - net 63 42 209 100
Other expense (income) - net 7   (4 ) 3   7  
Income before income taxes 521 376 1,455 1,163
Income tax expense 7   29   64   123  
Net income 514 347 1,391 1,040
Less net income for noncontrolling interests (4 ) (2 ) (9 ) (2 )
Net income attributable to Eaton ordinary shareholders $ 510   $ 345   $ 1,382   $ 1,038  
 
Net income per ordinary share
Diluted $ 1.07 $ 1.02 $ 2.90 $ 3.05
Basic 1.08 1.02 2.92 3.08
 
Weighted-average number of ordinary shares outstanding
Diluted 477.2 339.8 476.2 339.7
Basic 474.0 337.6 473.1 336.7
 
Cash dividends declared per ordinary share $ 0.42 $ 0.76 $ 1.26 $ 1.52
 

Reconciliation of net income attributable to Eaton ordinary shareholders to operating earnings

Net income attributable to Eaton ordinary shareholders $ 510 $ 345 $ 1,382 $ 1,038
Excluding acquisition integration charges and transaction costs (after-tax) 26   18   73   30  
Operating earnings $ 536   $ 363   $ 1,455   $ 1,068  
 
Net income per ordinary share - diluted $ 1.07 $ 1.02 $ 2.90 $ 3.05

Excluding per share impact of acquisition integration charges and transaction costs (after-tax)

0.05   0.05   0.15   0.09  
Operating earnings per ordinary share $ 1.12   $ 1.07   $ 3.05   $ 3.14  

See accompanying notes.

               
 
 
EATON CORPORATION plc
BUSINESS SEGMENT INFORMATION
 
  Three months endedSeptember 30     Nine months endedSeptember 30
 
(In millions) 2013 2012 2013 2012
Net sales
Electrical Products $ 1,817 $ 919 $ 5,235 $ 2,708
Electrical Systems and Services 1,639 910 4,784 2,675
Hydraulics 739 763 2,267 2,267
Aerospace 448 419 1,328 1,285
Vehicle 964   939   2,905   3,043  
Total net sales $ 5,607   $ 3,950   $ 16,519   $ 11,978  
 
Segment operating profit
Electrical Products $ 301 $ 172 $ 814 $ 462
Electrical Systems and Services 231 111 668 278
Hydraulics 89 93 271 325
Aerospace 64 49 193 168
Vehicle 161   144   465   472  
Total segment operating profit 846 569 2,411 1,705
 
Corporate
Amortization of intangible assets (110 ) (45 ) (325 ) (129 )
Interest expense - net (63 ) (42 ) (209 ) (100 )
Pension and other postretirement benefits expense (55 ) (41 ) (136 ) (121 )
Inventory step-up adjustment (1 ) (34 ) (4 )
Other corporate expense - net (97 ) (64 ) (252 ) (188 )
Income before income taxes 521 376 1,455 1,163
Income tax expense 7   29   64   123  
Net income 514 347 1,391 1,040
Less net income for noncontrolling interests (4 ) (2 ) (9 ) (2 )
Net income attributable to Eaton ordinary shareholders $ 510   $ 345   $ 1,382   $ 1,038  

See accompanying notes.

           
 
 
EATON CORPORATION plc
CONDENSED CONSOLIDATED BALANCE SHEETS
 
September 30,2013 December 31,2012
(In millions)
Assets
Current assets
Cash $ 642 $ 577
Short-term investments 698 527
Accounts receivable - net 3,950 3,510
Inventory 2,403 2,339
Deferred income taxes 404 393
Prepaid expenses and other current assets 669 429
Total current assets 8,766 7,775
 
Property, plant and equipment - net 3,757 3,823
 
Other noncurrent assets
Goodwill 14,276 14,211
Other intangible assets 7,231 7,468
Deferred income taxes 328 369
Other assets 954 1,704
Total assets $ 35,312 $ 35,350
 
Liabilities and shareholders’ equity
Current liabilities
Short-term debt $ 88 $ 757
Current portion of long-term debt 576 314
Accounts payable 1,976 1,879
Accrued compensation 430 463
Other current liabilities 1,984 2,008
Total current liabilities 5,054 5,421
 
Noncurrent liabilities
Long-term debt 9,029 9,762
Pension liabilities 1,801 2,004
Other postretirement benefits liabilities 733 740
Deferred income taxes 1,513 1,456
Other noncurrent liabilities 1,065 812
Total noncurrent liabilities 14,141 14,774
 
Shareholders’ equity
Eaton shareholders’ equity 16,071 15,113
Noncontrolling interests 46 42
Total equity 16,117 15,155
Total liabilities and equity $ 35,312 $ 35,350

See accompanying notes.

 
 
 

EATON CORPORATION plc

NOTES TO THE THIRD QUARTER 2013 EARNINGS RELEASE

Amounts are in millions of dollars unless indicated otherwise (per share data assume dilution).

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