Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Dec. 31, 2018 | Jan. 31, 2019 | |
Entity Information [Line Items] | ||
Entity Registrant Name | EMERSON ELECTRIC CO | |
Entity Central Index Key | 32,604 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 614,619,859 |
Consolidated Statements Of Earn
Consolidated Statements Of Earnings - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net sales | $ 4,147 | $ 3,816 |
Costs and expenses: | ||
Cost of sales | 2,386 | 2,202 |
Selling, general and administrative expenses | 1,077 | 995 |
Other deductions, net | 50 | 78 |
Interest expense (net of interest income of $5 and $11, respectively) | 43 | 38 |
Earnings before income taxes | 591 | 503 |
Income taxes | 124 | 109 |
Net earnings | 467 | 394 |
Less: Noncontrolling interests in earnings of subsidiaries | 2 | 2 |
Net earnings common stockholders | $ 465 | $ 392 |
Basic earnings per share common stockholders | $ 0.74 | $ 0.61 |
Diluted earnings per share common stockholders | 0.74 | 0.61 |
Cash dividends per common share | $ 0.49 | $ 0.485 |
Consolidated Statements Of Ea_2
Consolidated Statements Of Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Interest income | $ 5 | $ 11 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net earnings | $ 467 | $ 394 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation | (35) | 7 |
Pension and postretirement | 13 | 23 |
Cash flow hedges | (15) | (3) |
Total other comprehensive income (loss) | (37) | 27 |
Comprehensive income | 430 | 421 |
Less: Noncontrolling interests in comprehensive income of subsidiaries | 2 | 2 |
Comprehensive income common stockholders | $ 428 | $ 419 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Current assets | ||
Cash and equivalents | $ 1,248 | $ 1,093 |
Receivables, less allowances of $105 and $113, respectively | 2,733 | 3,023 |
Inventories | 1,980 | 1,813 |
Other current assets | 697 | 690 |
Total current assets | 6,658 | 6,619 |
Property, plant and equipment, net | 3,551 | 3,562 |
Other assets | ||
Goodwill | 6,468 | 6,455 |
Other intangible assets | 2,714 | 2,751 |
Other | 1,038 | 1,003 |
Total other assets | 10,220 | 10,209 |
Total assets | 20,429 | 20,390 |
Current liabilities | ||
Short-term borrowings and current maturities of long-term debt | 3,320 | 1,623 |
Accounts payable | 1,794 | 1,943 |
Accrued expenses | 2,288 | 2,534 |
Income taxes | 138 | 64 |
Total current liabilities | 7,540 | 6,164 |
Long-term debt | 2,641 | 3,137 |
Other liabilities | 1,972 | 2,099 |
Equity | ||
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 615.8 shares and 629.2 shares, respectively | 477 | 477 |
Additional paid-in-capital | 375 | 348 |
Retained earnings | 23,252 | 23,072 |
Accumulated other comprehensive income (loss) | (1,052) | (1,015) |
Cost of common stock in treasury, 337.5 shares and 324.2 shares, respectively | (14,816) | (13,935) |
Common stockholders’ equity | 8,236 | 8,947 |
Noncontrolling interests in subsidiaries | 40 | 43 |
Total equity | 8,276 | 8,990 |
Total liabilities and equity | $ 20,429 | $ 20,390 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 105 | $ 113 |
Common stock, par value per share | $ 0.50 | $ 0.50 |
Common stock, shares authorized | 1,200 | 1,200 |
Common stock, shares issued | 953.4 | 953.4 |
Common stock, shares outstanding | 615.8 | 629.2 |
Treasury stock, shares | 337.5 | 324.2 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Net earnings | $ 467 | $ 394 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 202 | 187 |
Changes in operating working capital | (310) | (160) |
Other, net | (36) | 26 |
Cash provided by operating activities | 323 | 447 |
Investing activities | ||
Capital expenditures | (155) | (96) |
Purchases of businesses, net of cash and equivalents acquired | (73) | (513) |
Divestitures of businesses | 0 | 235 |
Other, net | (31) | (18) |
Cash used in investing activities | (259) | (392) |
Financing activities | ||
Net increase in short-term borrowings | 1,601 | 1,061 |
Payments of long-term debt | (403) | (251) |
Dividends paid | (305) | (311) |
Purchases of common stock | (786) | (500) |
Other, net | (9) | (30) |
Cash provided by (used in) financing activities | 98 | (31) |
Effect of exchange rate changes on cash and equivalents | (7) | 10 |
Increase in cash and equivalents | 155 | 34 |
Beginning cash and equivalents | 1,093 | 3,062 |
Ending cash and equivalents | 1,248 | 3,096 |
Changes in operating working capital | ||
Receivables | 292 | 188 |
Inventories | (170) | (149) |
Other current assets | (9) | 14 |
Accounts payable | (247) | (129) |
Accrued expenses | (246) | (166) |
Income taxes | 70 | 82 |
Changes in operating working capital | $ (310) | $ (160) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation And Recently Issued Accounting Pronouncements | BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2018 . Certain prior year amounts have been reclassified to conform to current year presentation. On October 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers , which updated and consolidated revenue recognition guidance from multiple sources into a single, comprehensive standard to be applied for all contracts with customers. The fundamental principle of the revised standard is to recognize revenue based on the transfer of goods and services to customers at the amount the Company expects to be entitled to in exchange for those goods and services. The Company adopted the new standard using the modified retrospective approach and applied the guidance to open contracts which were not completed at the date of adoption. The cumulative effect of adoption resulted in a $20 increase to beginning retained earnings as of October 1, 2018. This increase primarily relates to contracts where a portion of revenue for delivered goods or services was previously deferred due to contingent payment terms. The adoption of ASC 606 did not materially impact the Company's consolidated financial statements as of and for the three months ended December 31, 2018 . In the first quarter of fiscal 2019, the Company adopted updates to ASC 715, Compensation - Retirement Benefits , which permit only the service cost component of net periodic pension and postretirement expense to be reported with compensation costs, while all other components are required to be reported separately in other deductions. These updates were adopted retrospectively and resulted in the reclassification of $10 of income in the first quarter of fiscal 2018 from cost of sales and SG&A to other deductions, net. Segment earnings were not impacted by the updates to ASC 715. |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | REVENUE RECOGNITION Emerson is a global manufacturer that combines technology and engineering to provide innovative solutions to its customers, largely in the form of tangible products. The Company evaluates its contracts with customers to identify the promised goods or services and recognizes revenue for the identified performance obligations at the amount the Company expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Revenue is recognized when, or as, performance obligations are satisfied and control has transferred to the customer, typically when products are shipped or delivered, title and risk of loss pass to the customer, and the Company has a present right to payment. The vast majority of the Company's revenues relate to a broad offering of manufactured products which are recognized at the point in time when control transfers, generally in accordance with shipping terms. A small portion of the Company's revenues relate to the sale of software and post-contract customer support, parts and labor for repairs, and engineering services. In limited circumstances, contracts include multiple performance obligations, where revenue is recognized separately for each good or service, as well as contracts where revenue is recognized over time as control transfers to the customer. Revenue is recognized over time for approximately 5 percent of the Company's revenues. These contracts largely relate to projects in the Process Control Systems & Solutions product offering within the Automation Solutions segment where revenue is recognized using the percentage-of-completion method to reflect the transfer of control over time, while a small amount is attributable to long-term maintenance and service contracts where revenue is typically recognized on a straight-line basis as the services are provided. Approximately 5 percent of revenues relate to sales arrangements with multiple performance obligations, principally in the Automation Solutions segment. Tangible products represent a large majority of the delivered items in contracts with multiple performance obligations or where revenue is recognized over time, while a smaller portion is attributable to installation, service and maintenance. For revenues recognized over time, the Company typically uses an input method to determine progress and recognize revenue, based on costs incurred. The Company believes costs incurred closely correspond with its performance under the contract and the transfer of control to the customer. In sales arrangements that involve multiple performance obligations, revenue is allocated based on the relative standalone selling price for each performance obligation. Observable selling prices from actual transactions are used whenever possible. In other instances, the Company determines the standalone selling price based on third-party pricing or management's best estimate. Generally, contract duration is short-term, and cancellation, termination or refund provisions apply only in the event of contract breach and are rarely invoked. Payment terms vary but are generally short-term in nature. The Company's long-term contracts, where revenue is generally recognized over time, are typically billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. The timing of revenue recognition and billings under these contracts results in either unbilled receivables (contract assets) when revenue recognized exceeds billings, or customer advances (contract liabilities) when billings exceed revenue recognized. Unbilled receivables are reclassified to accounts receivable when an unconditional right to consideration exists, typically when a milestone in the contract is achieved. The Company does not evaluate whether the transaction price includes a significant financing component for contracts where the time between cash collection and performance is less than one year. Certain arrangements with customers include variable consideration, typically in the form of rebates, cash discounts or penalties. In limited circumstances, the Company sells products with a general right of return. In most instances, returns are limited to product quality issues. The Company records a reduction to revenue at the time of sale to reflect the ultimate amount of consideration it expects to receive. The Company's estimates are updated quarterly based on historical experience, trend analysis, and expected market conditions. Variable consideration is typically not constrained at the time revenue is recognized. The Company offers warranties, which vary by product line and are competitive for the markets in which the Company operates. Warranties are largely offered to provide assurance that the product will function as intended and generally extend for a period of one to two years from the date of sale or installation. Provisions for warranty expense are estimated at the time of sale based on historical experience and adjusted quarterly for any known issues that may arise. Product warranty expense is less than one percent of sales. Capitalized amounts related to incremental costs to obtain customer contracts and costs to fulfill contracts are immaterial. The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other current assets, and its customer advances (contract liabilities), which are reported in Accrued expenses. Sept 30, 2018 Dec 31, 2018 Unbilled receivables (contract assets) $ 321 371 Customer advances (contract liabilities) (510 ) (490 ) Net contract liabilities $ (189 ) (119 ) The majority of the Company's contract balances relate to arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule. The decrease in net contract liabilities was due to revenue recognized for performance completed during the period which exceeded customer billings. Revenue recognized for the three months ended December 31, 2018 included approximately $220 that was included in the beginning contract liability balance. No other factors materially impacted the change in net contract liabilities. Revenue recognized in the current reporting period for performance obligations that were fully satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was not material. As of December 31, 2018 , the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was $5.2 billion . The Company expects to recognize approximately 85 percent of its remaining performance obligations as revenue over the next 12 months , with the remainder substantially over the subsequent two years thereafter. See Note 12 for additional information about the Company's revenues. |
Weighted Average Common Shares
Weighted Average Common Shares | 3 Months Ended |
Dec. 31, 2018 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |
Weighted Average Common Shares | WEIGHTED-AVERAGE COMMON SHARES Reconciliations of weighted-average shares for basic and diluted earnings per common share follow. Earnings allocated to participating securities were inconsequential. Three Months Ended 2017 2018 Basic shares outstanding 638.2 623.9 Dilutive shares 2.3 3.9 Diluted shares outstanding 640.5 627.8 |
Other Financial Information
Other Financial Information | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Other Financial Information | OTHER FINANCIAL INFORMATION Sept 30, 2018 Dec 31, 2018 Inventories Finished products $ 592 659 Raw materials and work in process 1,221 1,321 Total $ 1,813 1,980 Property, plant and equipment, net Property, plant and equipment, at cost $ 8,370 8,451 Less: Accumulated depreciation 4,808 4,900 Total $ 3,562 3,551 Goodwill by business segment Automation Solutions $ 5,355 5,369 Climate Technologies 670 670 Tools & Home Products 430 429 Commercial & Residential Solutions 1,100 1,099 Total $ 6,455 6,468 Other intangible assets Gross carrying amount $ 4,667 4,716 Less: Accumulated amortization 1,916 2,002 Net carrying amount $ 2,751 2,714 Other intangible assets include customer relationships of $1,476 and $1,517 as of December 31, 2018 and September 30, 2018, respectively. Other assets include the following: Pension assets $ 591 616 Asbestos-related insurance receivables $ 124 123 Deferred income taxes $ 74 77 Sept 30, 2018 Dec 31, 2018 Accrued expenses include the following: Employee compensation $ 629 512 Customer advances $ 510 490 Product warranty $ 124 117 Other liabilities Pension and postretirement liabilities $ 625 623 Deferred income taxes 484 482 Asbestos litigation 334 332 Other 656 535 Total $ 2,099 1,972 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | FINANCIAL INSTRUMENTS Following is a discussion regarding the Company’s use of financial instruments: Hedging Activities – As of December 31, 2018 , the notional amount of foreign currency hedge positions was approximately $2.3 billion , and commodity hedge contracts totaled approximately $126 (primarily 47 million pounds of copper and aluminum). All derivatives receiving hedge accounting are cash flow hedges. The majority of hedging gains and losses deferred as of December 31, 2018 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and losses on foreign currency derivatives reported in Other deductions, net reflect hedges of balance sheet exposures that do not receive hedge accounting. The following gains and losses are included in earnings and other comprehensive income (OCI) for the three months ended December 31, 2018 and 2017 : Into Earnings Into OCI 1st Quarter 1st Quarter Gains (Losses) Location 2017 2018 2017 2018 Commodity Cost of sales $ 5 (3 ) 13 (7 ) Foreign currency Sales, cost of sales — 2 (12 ) (12 ) Foreign currency Other deductions, net — 11 Total $ 5 10 1 (19 ) Regardless of whether derivatives receive hedge accounting, the Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving hedge accounting are highly effective and no amounts were excluded from the assessment of hedge effectiveness. Hedge ineffectiveness was immaterial for the three months ended December 31, 2018 and 2017 . Fair Value Measurement – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. As of December 31, 2018 , the fair value of long-term debt was $3.6 billion , which exceeded the carrying value by $150 . At December 31, 2018 , the fair values of commodity contracts and foreign currency contracts were reported in other current assets and accrued expenses. Valuations of derivative contract positions are summarized below: September 30, 2018 December 31, 2018 Assets Liabilities Assets Liabilities Foreign Currency $ 35 11 14 21 Commodity $ 1 10 — 14 Counterparties to derivatives arrangements are companies with investment-grade credit ratings. The Company has bilateral collateral arrangements with counterparties with credit rating-based posting thresholds that vary depending on the arrangement. If credit ratings on the Company's debt fall below pre-established levels, counterparties can require immediate full collateralization of all derivatives in net liability positions. The maximum amount that could potentially have been required was $23 . The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. No collateral was posted with counterparties and none was held by the Company as of December 31, 2018 . |
Equity Roll Forward
Equity Roll Forward | 3 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | EQUITY The change in equity for the three months ended December 31, 2018 and 2017 is shown below: Three Months Ended December 31, 2017 2018 Common stock $ 477 477 Additional paid-in-capital Beginning balance 297 348 Stock plans 9 27 Ending balance 306 375 Retained earnings Beginning balance 21,995 23,072 Net earnings common stockholders 392 465 Dividends paid (311 ) (305 ) Adoption of accounting standard updates 3 20 Ending balance 22,079 23,252 Accumulated other comprehensive income (loss) Beginning balance (1,019 ) (1,015 ) Foreign currency translation 7 (35 ) Pension and postretirement 23 13 Cash flow hedges (3 ) (15 ) Ending balance (992 ) (1,052 ) Treasury stock Beginning balance (13,032 ) (13,935 ) Purchases (500 ) (925 ) Issued under stock plans 11 44 Ending balance (13,521 ) (14,816 ) Common stockholders' equity 8,349 8,236 Noncontrolling interests in subsidiaries Beginning balance 52 43 Net earnings 2 2 Dividends paid (15 ) (5 ) Ending balance 39 40 Total equity $ 8,388 8,276 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Comprehensive Income (Loss) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Activity in Accumulated other comprehensive income (loss) for the three months ended December 31, 2018 and 2017 is shown below: Three Months Ended December 31, 2017 2018 Foreign currency translation Beginning balance $ (369 ) (600 ) Other comprehensive income (loss) before reclassifications 24 (35 ) Reclassified to gain/loss on sale of business (17 ) — Ending balance (362 ) (635 ) Pension and postretirement Beginning balance (662 ) (420 ) Amortization of deferred actuarial losses into earnings 23 13 Ending balance (639 ) (407 ) Cash flow hedges Beginning balance 12 5 Deferral of gains (losses) arising during the period 1 (14 ) Reclassification of realized (gains) losses to sales and cost of sales (4 ) (1 ) Ending balance 9 (10 ) Accumulated other comprehensive income (loss) $ (992 ) (1,052 ) Activity above is shown net of income taxes for the three months ended December 31, 2018 and 2017, respectively, as follows: amortization of pension and postretirement deferred actuarial losses: $(4) and $(8); deferral of cash flow hedging gains (losses): $5 and $-; reclassification of realized cash flow hedging (gains) losses: $- and $1. |
Pension & Postretirement Expens
Pension & Postretirement Expenses | 3 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Pension And Postretirement Plan Expenses | PENSION & POSTRETIREMENT PLANS Total periodic pension and postretirement (income) expense is summarized below: Three Months Ended December 31, 2017 2018 Service cost $ 19 18 Interest cost 46 50 Expected return on plan assets (87 ) (88 ) Net amortization 31 17 Total $ 9 (3 ) |
Other Deductions, Net
Other Deductions, Net | 3 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Deductions, Net | OTHER DEDUCTIONS, NET Other deductions, net are summarized below: Three Months Ended 2017 2018 Amortization of intangibles $ 56 57 Restructuring costs 15 10 Other 7 (17 ) Total $ 78 50 For the three months ended December 31, 2018, higher intangibles amortization of $17 from acquisitions completed in 2018 was largely offset by backlog amortization of $15 incurred in the prior year related to the valves & controls acquisition. The change in Other is primarily due to a favorable impact on comparisons from foreign currency transactions of $13 and pensions of $11 . |
Restructuring
Restructuring | 3 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING COSTS Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Costs for the three months ended December 31, 2018 largely relate to restructuring of the global cost structure consistent with the current level of economic activity, as well as the redeployment of resources for future growth. Restructuring expense by business segment follows: Three Months Ended 2017 2018 Automation Solutions $ 10 5 Climate Technologies 5 3 Tools & Home Products — 2 Commercial & Residential Solutions 5 5 Total $ 15 10 Details of the change in the liability for restructuring costs during the three months ended December 31, 2018 follow: Sept 30, 2018 Expense Utilized/Paid Dec 31, 2018 Severance and benefits $ 46 5 11 40 Lease and other contract terminations 3 — 1 2 Asset write-downs — 1 1 — Vacant facility and other shutdown costs 3 2 2 3 Start-up and moving costs — 2 2 — Total $ 52 10 17 45 |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On December 22, 2017, the U.S. government enacted tax reform, the Tax Cuts and Jobs Act (the "Act"), which made comprehensive changes to U.S. federal income tax laws by moving from a global to a modified territorial tax regime. The Act includes a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent in calendar year 2018 along with the elimination of certain deductions and credits, and a one-time "deemed repatriation" of accumulated foreign earnings. The Company recognized a net tax benefit of $43 ( $0.07 per share) in the first quarter of fiscal 2018 and $189 ( $0.30 per share) for the full year due to impacts of the Act. Effective in fiscal 2019, the Act also subjects the Company to U.S. tax on global intangible low-taxed income earned by certain of its foreign subsidiaries. The Company has elected to recognize this tax as a period expense when it is incurred. In the first quarter of fiscal 2019, the Company completed its accounting for the impacts of the Act and recorded a $100 benefit relating to the one-time tax on deemed repatriation of accumulated foreign earnings, which was offset by a related increase to its unrecognized tax benefits. Given the complexities associated with the Act, additional regulatory guidance is expected to be issued. Recently, the U.S. Treasury and Internal Revenue Service released proposed regulations relating to the one-time tax on deemed repatriation of accumulated foreign earnings, the utilization of foreign tax credits, the calculation of global intangible low-taxed income, and other provisions of the Act. The proposed regulations were subject to a comment period and final regulations are expected to be issued after consideration of comments received. The Company will include the effects of any final regulations, including those issued on January 15, 2019 related to the one-time tax on deemed repatriation which it is currently assessing, as well as any additional guidance or legislative changes, in the period they are issued. Income taxes were $124 for the first quarter of 2019 and $109 for 2018 , resulting in effective tax rates of 21 percent and 22 percent , respectively. The effective tax rates in both years reflect the lower U.S. corporate income tax rate as a result of the Act. The current year rate also included favorable discrete items, which reduced the rate 3 percentage points, while the prior year rate included the net tax benefit discussed above. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | BUSINESS SEGMENTS Summarized information about the Company's results of operations by business segment follows: Three Months Ended December 31, Sales Earnings 2017 2018 2017 2018 Automation Solutions $ 2,572 2,799 386 407 Climate Technologies 922 880 165 146 Tools & Home Products 330 458 87 91 Commercial & Residential Solutions 1,252 1,338 252 237 Differences in accounting methods 51 59 Corporate and other (148 ) (69 ) Eliminations/Interest (8 ) 10 (38 ) (43 ) Total $ 3,816 4,147 503 591 The decrease in Corporate and other was primarily due to lower incentive stock compensation of $63 , reflecting a decreasing stock price in the current year compared to an increasing stock price in the prior year. In addition, the prior year included valves & controls first year acquisition accounting charges of $10 related to inventory and $15 for backlog amortization. Automation Solutions sales by major product offering are summarized below: Three Months Ended December 31, 2017 2018 Measurement & Analytical Instrumentation $ 772 858 Valves, Actuators & Regulators 863 874 Industrial Solutions 428 542 Process Control Systems & Solutions 509 525 Automation Solutions $ 2,572 2,799 Segment sales by geographic destination are summarized below: Three Months Ended December 31, 2017 2018 Automation Solutions Commercial & Residential Solutions Total Automation Solutions Commercial & Residential Solutions Total Americas $ 1,286 778 2,064 1,405 907 2,312 Asia, Middle East & Africa 790 348 1,138 841 265 1,106 Europe 496 126 622 553 166 719 Total $ 2,572 1,252 3,824 2,799 1,338 4,137 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | ACQUISITIONS AND DIVESTITURES During the first three months of 2019, the Company acquired three businesses in the Automation Solutions segment for $73 , net of cash acquired. These three businesses had combined annual sales of approximately $40 . On July 17, 2018, the Company completed the acquisition of Aventics, a global provider of smart pneumatics technologies that power machine and factory automation applications, for $622 , net of cash acquired. This business, which has annual sales of approximately $425 , is reported in the Industrial Solutions product offering in the Automation Solutions segment. T he Company recognized goodwill of $358 ( $20 of which is expected to be tax deductible), and identifiable intangible assets of $278 , primarily intellectual property and customer relationships with a weighted-average useful life of approximately 12 years. On July 2, 2018, the Company completed the acquisition of Textron's tools and test equipment business for $810 , net of cash acquired. This business, with annual sales of approximately $470 , is a manufacturer of electrical and utility tools, diagnostics, and test and measurement instruments, and is reported in the Tools & Home products segment. T he Company recognized goodwill of $374 ( $17 of which is expected to be tax deductible), and identifiable intangible assets of $358 , primarily intellectual property and customer relationships with a weighted-average useful life of approximately 14 years. Valuations of acquired assets and liabilities are in process and subject to refinement. On December 1, 2017, the Company acquired Paradigm, a provider of software solutions for the oil and gas industry, for $505 , net of cash acquired. This business had annual sales of approximately $140 and is included in the Measurement & Analytical Instrumentation product offering within Automation Solutions. The Company recognized goodwill of $309 ( $170 of which is expected to be tax deductible), and identifiable intangible assets of $238 , primarily intellectual property and customer relationships with a weighted-average useful life of approximately 11 years. During 2018, the Company also acquired four smaller businesses, two in the Automation Solutions segment and two in the Climate Technologies segment. On October 2, 2017, the Company sold its residential storage business for $200 in cash, and recognized a small pretax gain and an after-tax loss of $24 ( $0.04 per share) in the first quarter of 2018 due to income taxes resulting from nondeductible goodwill. The Company realized $150 in after-tax cash proceeds from the sale. Pro Forma Financial Information The following unaudited pro forma consolidated condensed financial results of operations are presented as if the 2018 acquisitions occurred on October 1, 2016 and the acquisition of the valves & controls business occurred on October 1, 2015. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions occurred as of that time. Three Months Ended Dec 31, 2017 Net sales $ 4,087 Net earnings common stockholders $ 410 Diluted earnings per share $ 0.64 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS In January 2019, the Company issued €500 of 1.25% notes due October 2025 and €500 of 2.0% notes due October 2029. The net proceeds from the sale of the notes were used to repay commercial paper borrowings and for general corporate purposes. On January 31, 2019, the Company completed the acquisition of Intelligent Platforms, a division of General Electric, for approximately $160 net of cash acquired. This business, which offers programmable logic controller technologies, will be reported in the Automation Solutions segment. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other current assets, and its customer advances (contract liabilities), which are reported in Accrued expenses. Sept 30, 2018 Dec 31, 2018 Unbilled receivables (contract assets) $ 321 371 Customer advances (contract liabilities) (510 ) (490 ) Net contract liabilities $ (189 ) (119 ) |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |
Schedule Of Basic And Diluted Earnings Per Share Reconciliation | Three Months Ended 2017 2018 Basic shares outstanding 638.2 623.9 Dilutive shares 2.3 3.9 Diluted shares outstanding 640.5 627.8 |
Other Financial Information (Ta
Other Financial Information (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Inventories | Sept 30, 2018 Dec 31, 2018 Inventories Finished products $ 592 659 Raw materials and work in process 1,221 1,321 Total $ 1,813 1,980 |
Property, Plant And Equipment, Net | Property, plant and equipment, net Property, plant and equipment, at cost $ 8,370 8,451 Less: Accumulated depreciation 4,808 4,900 Total $ 3,562 3,551 |
Goodwill By Business Segment | Goodwill by business segment Automation Solutions $ 5,355 5,369 Climate Technologies 670 670 Tools & Home Products 430 429 Commercial & Residential Solutions 1,100 1,099 Total $ 6,455 6,468 |
Other Intangible Assets | Other intangible assets Gross carrying amount $ 4,667 4,716 Less: Accumulated amortization 1,916 2,002 Net carrying amount $ 2,751 2,714 Other intangible assets include customer relationships of $1,476 and $1,517 as of December 31, 2018 and September 30, 2018, respectively. |
Other Assets | Other assets include the following: Pension assets $ 591 616 Asbestos-related insurance receivables $ 124 123 Deferred income taxes $ 74 77 |
Accrued Expenses | Sept 30, 2018 Dec 31, 2018 Accrued expenses include the following: Employee compensation $ 629 512 Customer advances $ 510 490 Product warranty $ 124 117 |
Other Liabilities | Other liabilities Pension and postretirement liabilities $ 625 623 Deferred income taxes 484 482 Asbestos litigation 334 332 Other 656 535 Total $ 2,099 1,972 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule Of Derivative Instruments | The following gains and losses are included in earnings and other comprehensive income (OCI) for the three months ended December 31, 2018 and 2017 : Into Earnings Into OCI 1st Quarter 1st Quarter Gains (Losses) Location 2017 2018 2017 2018 Commodity Cost of sales $ 5 (3 ) 13 (7 ) Foreign currency Sales, cost of sales — 2 (12 ) (12 ) Foreign currency Other deductions, net — 11 Total $ 5 10 1 (19 ) |
Fair Value Measurements | Valuations of derivative contract positions are summarized below: September 30, 2018 December 31, 2018 Assets Liabilities Assets Liabilities Foreign Currency $ 35 11 14 21 Commodity $ 1 10 — 14 |
Equity Roll Forward (Tables)
Equity Roll Forward (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity | The change in equity for the three months ended December 31, 2018 and 2017 is shown below: Three Months Ended December 31, 2017 2018 Common stock $ 477 477 Additional paid-in-capital Beginning balance 297 348 Stock plans 9 27 Ending balance 306 375 Retained earnings Beginning balance 21,995 23,072 Net earnings common stockholders 392 465 Dividends paid (311 ) (305 ) Adoption of accounting standard updates 3 20 Ending balance 22,079 23,252 Accumulated other comprehensive income (loss) Beginning balance (1,019 ) (1,015 ) Foreign currency translation 7 (35 ) Pension and postretirement 23 13 Cash flow hedges (3 ) (15 ) Ending balance (992 ) (1,052 ) Treasury stock Beginning balance (13,032 ) (13,935 ) Purchases (500 ) (925 ) Issued under stock plans 11 44 Ending balance (13,521 ) (14,816 ) Common stockholders' equity 8,349 8,236 Noncontrolling interests in subsidiaries Beginning balance 52 43 Net earnings 2 2 Dividends paid (15 ) (5 ) Ending balance 39 40 Total equity $ 8,388 8,276 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Activity in Accumulated other comprehensive income (loss) for the three months ended December 31, 2018 and 2017 is shown below: Three Months Ended December 31, 2017 2018 Foreign currency translation Beginning balance $ (369 ) (600 ) Other comprehensive income (loss) before reclassifications 24 (35 ) Reclassified to gain/loss on sale of business (17 ) — Ending balance (362 ) (635 ) Pension and postretirement Beginning balance (662 ) (420 ) Amortization of deferred actuarial losses into earnings 23 13 Ending balance (639 ) (407 ) Cash flow hedges Beginning balance 12 5 Deferral of gains (losses) arising during the period 1 (14 ) Reclassification of realized (gains) losses to sales and cost of sales (4 ) (1 ) Ending balance 9 (10 ) Accumulated other comprehensive income (loss) $ (992 ) (1,052 ) Activity above is shown net of income taxes for the three months ended December 31, 2018 and 2017, respectively, as follows: amortization of pension and postretirement deferred actuarial losses: $(4) and $(8); deferral of cash flow hedging gains (losses): $5 and $-; reclassification of realized cash flow hedging (gains) losses: $- and $1. |
Pension & Postretirement Expe_2
Pension & Postretirement Expenses (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Summary of Pension and Postretirement Plan Expenses | Total periodic pension and postretirement (income) expense is summarized below: Three Months Ended December 31, 2017 2018 Service cost $ 19 18 Interest cost 46 50 Expected return on plan assets (87 ) (88 ) Net amortization 31 17 Total $ 9 (3 ) |
Other Deductions, Net (Tables)
Other Deductions, Net (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Deductions, net | Other deductions, net are summarized below: Three Months Ended 2017 2018 Amortization of intangibles $ 56 57 Restructuring costs 15 10 Other 7 (17 ) Total $ 78 50 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expense by Segment | Restructuring expense by business segment follows: Three Months Ended 2017 2018 Automation Solutions $ 10 5 Climate Technologies 5 3 Tools & Home Products — 2 Commercial & Residential Solutions 5 5 Total $ 15 10 |
Change in Restructuring Reserve by Type of Cost | Details of the change in the liability for restructuring costs during the three months ended December 31, 2018 follow: Sept 30, 2018 Expense Utilized/Paid Dec 31, 2018 Severance and benefits $ 46 5 11 40 Lease and other contract terminations 3 — 1 2 Asset write-downs — 1 1 — Vacant facility and other shutdown costs 3 2 2 3 Start-up and moving costs — 2 2 — Total $ 52 10 17 45 |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Summarized information about the Company's results of operations by business segment follows: Three Months Ended December 31, Sales Earnings 2017 2018 2017 2018 Automation Solutions $ 2,572 2,799 386 407 Climate Technologies 922 880 165 146 Tools & Home Products 330 458 87 91 Commercial & Residential Solutions 1,252 1,338 252 237 Differences in accounting methods 51 59 Corporate and other (148 ) (69 ) Eliminations/Interest (8 ) 10 (38 ) (43 ) Total $ 3,816 4,147 503 591 |
Financial Information by Major Product Offering | Automation Solutions sales by major product offering are summarized below: Three Months Ended December 31, 2017 2018 Measurement & Analytical Instrumentation $ 772 858 Valves, Actuators & Regulators 863 874 Industrial Solutions 428 542 Process Control Systems & Solutions 509 525 Automation Solutions $ 2,572 2,799 |
Financial Information By Geographic Area | Segment sales by geographic destination are summarized below: Three Months Ended December 31, 2017 2018 Automation Solutions Commercial & Residential Solutions Total Automation Solutions Commercial & Residential Solutions Total Americas $ 1,286 778 2,064 1,405 907 2,312 Asia, Middle East & Africa 790 348 1,138 841 265 1,106 Europe 496 126 622 553 166 719 Total $ 2,572 1,252 3,824 2,799 1,338 4,137 |
Acquisitions and Divestitures A
Acquisitions and Divestitures Acquisitions and Divestitures (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisition, Pro Forma Information | Pro Forma Financial Information The following unaudited pro forma consolidated condensed financial results of operations are presented as if the 2018 acquisitions occurred on October 1, 2016 and the acquisition of the valves & controls business occurred on October 1, 2015. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions occurred as of that time. Three Months Ended Dec 31, 2017 Net sales $ 4,087 Net earnings common stockholders $ 410 Diluted earnings per share $ 0.64 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ 23,252 | $ 23,072 |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Retained earnings | $ 20 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Details 2) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Standards Update 2017-07 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Effect of change in accounting principal on operating results, retirement benefits | $ 10 |
Revenue Recognition Revenue Rec
Revenue Recognition Revenue Recognition Narrative (Details) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Percentage of revenue recognized over time | 5.00% |
Percentage of revenue from multiple deliverable arrangements | 5.00% |
Percentage of product warranty expenses on sales | 1.00% |
Revenue Recognition Revenue R_2
Revenue Recognition Revenue Recognition Contract Asset (Liability) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Unbilled receivables (contract assets) | $ 371 | $ 321 |
Customer advances (contract liability) | (490) | (510) |
Net contract asset (liabilities) | (119) | $ (189) |
Revenue recognized, included in beginning contract liability | $ 220 |
Revenue Recognition Revenue R_3
Revenue Recognition Revenue Recognition Performance Obligations (Details) $ in Millions | Dec. 31, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Backlog | $ 5,200 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Percentage of backlog recognized as revenue, next 12 months | 85.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, backlog | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, backlog | 1 year |
Weighted Average Common Share_2
Weighted Average Common Shares (Schedule Of Basic And Diluted Earnings Per Share Reconciliation) (Details) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Basic shares outstanding | 623.9 | 638.2 |
Dilutive shares | 3.9 | 2.3 |
Diluted shares outstanding | 627.8 | 640.5 |
Other Financial Information (In
Other Financial Information (Inventories) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 659 | $ 592 |
Raw materials and work in process | 1,321 | 1,221 |
Total | $ 1,980 | $ 1,813 |
Other Financial Information (PP
Other Financial Information (PPE) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Property, Plant and Equipment [Abstract] | ||
Property, plant and equipment, at cost | $ 8,451 | $ 8,370 |
Less: Accumulated depreciation | 4,900 | 4,808 |
Total | $ 3,551 | $ 3,562 |
Other Financial Information (Go
Other Financial Information (Goodwill) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 6,468 | $ 6,455 |
Automation Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 5,369 | 5,355 |
Climate Technologies [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 670 | 670 |
Tools & Home Products [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 429 | 430 |
Commercial & Residential Solutions [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,099 | $ 1,100 |
Other Financial Information (_2
Other Financial Information (Intangibles) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 4,716 | $ 4,667 |
Less: Accumulated amortization | 2,002 | 1,916 |
Net carrying amount | 2,714 | 2,751 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net carrying amount | $ 1,476 | $ 1,517 |
Other Financial Information (Ot
Other Financial Information (Other Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Pension assets | $ 616 | $ 591 |
Asbestos-related insurance receivables | 123 | 124 |
Deferred income taxes | $ 77 | $ 74 |
Other Financial Information (Ac
Other Financial Information (Accrued Expenses) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Employee compensation | $ 512 | $ 629 |
Customer advances | 490 | 510 |
Product warranty | $ 117 | $ 124 |
Other Financial Information (_3
Other Financial Information (Other Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Other Liabilities [Abstract] | ||
Pension and postretirement liabilities | $ 623 | $ 625 |
Deferred income taxes | 482 | 484 |
Asbestos litigation | 332 | 334 |
Other | 535 | 656 |
Total | $ 1,972 | $ 2,099 |
Financial Instruments (Schedule
Financial Instruments (Schedule Of Derivative Instruments) (Details) lb in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2018USD ($)lb | Dec. 31, 2017USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified to earnings | $ 10 | $ 5 |
Gain (loss) to other comprehensive income | (19) | 1 |
Commodity Contract [Member] | Cash Flow Hedging [Member] | Other Comprehensive Income (Loss) [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) to other comprehensive income | (7) | 13 |
Commodity Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified to earnings | (3) | 5 |
Foreign Exchange Contract [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount of foreign currency hedge positions | 2,300 | |
Foreign Exchange Contract [Member] | Other deductions, net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified to earnings | 11 | 0 |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Other Comprehensive Income (Loss) [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) to other comprehensive income | (12) | (12) |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Sales, Cost of Sales [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified to earnings | 2 | $ 0 |
All Commodity Hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of commodities hedged | $ 126 | |
Copper and Aluminum [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Weight in pounds of copper and aluminum commodity hedges | lb | 47 |
Financial Instruments (Fair Val
Financial Instruments (Fair Value Measurements) (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 |
Derivatives, Fair Value [Line Items] | ||
Fair value of long-term debt compared with carrying value | $ 150 | |
Maximum collateral that could have been required | 23 | |
Collateral posted to counterparties | 0 | |
Collateral held from counterparties | 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of long-term debt | 3,600 | |
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 14 | $ 35 |
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | Other Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities | 21 | 11 |
Cash Flow Hedging [Member] | Commodity Contract [Member] | Assets [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative assets | 0 | 1 |
Cash Flow Hedging [Member] | Commodity Contract [Member] | Other Liabilities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liabilities | $ 14 | $ 10 |
Equity Roll Forward (Schedule O
Equity Roll Forward (Schedule Of Change In Equity) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 8,990 | ||
Net earnings common stockholders | 465 | $ 392 | |
Foreign currency translation | (35) | 7 | |
Cash flow hedges | (15) | (3) | |
Common stockholders' equity | 8,236 | 8,349 | $ 8,947 |
Ending balance | 8,276 | 8,388 | |
Common stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Ending balance | 477 | 477 | |
Additional paid-in-capital | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 348 | 297 | |
Stock plans | 27 | 9 | |
Ending balance | 375 | 306 | |
Retained earnings | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 23,072 | 21,995 | |
Net earnings common stockholders | 465 | 392 | |
Dividends paid | (305) | (311) | |
Adoption of accounting standard updates | 20 | 3 | |
Ending balance | 23,252 | 22,079 | |
Accumulated other comprehensive income (loss) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (1,015) | (1,019) | |
Foreign currency translation | (35) | 7 | |
Pension and postretirement | 13 | 23 | |
Cash flow hedges | (15) | (3) | |
Ending balance | (1,052) | (992) | |
Treasury stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (13,935) | (13,032) | |
Purchases | (925) | (500) | |
Issued under stock plans | 44 | 11 | |
Ending balance | (14,816) | (13,521) | |
Noncontrolling interests in subsidiaries | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 43 | 52 | |
Dividends paid | (5) | (15) | |
Net earnings | 2 | 2 | |
Ending balance | $ 40 | $ 39 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income Accumulated Other Comprehnsive Income (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Accumulated other comprehensive income [Roll Forward] | |||
Beginning balance | $ 8,990 | ||
Ending balance | 8,276 | $ 8,388 | |
Accumulated other comprehensive income (loss) | (1,052) | (992) | $ (1,015) |
Foreign currency translation [Member] | |||
Accumulated other comprehensive income [Roll Forward] | |||
Beginning balance | (600) | (369) | |
Other comprehensive income (loss) before reclassifications | (35) | 24 | |
Reclassified to gain/loss on sale of business | 0 | (17) | |
Ending balance | (635) | (362) | |
Pension and post retirement [Member] | |||
Accumulated other comprehensive income [Roll Forward] | |||
Beginning balance | (420) | (662) | |
Amortization of deferred actuarial losses into earnings | 13 | 23 | |
Ending balance | (407) | (639) | |
Cash Flow Hedges [Member] | |||
Accumulated other comprehensive income [Roll Forward] | |||
Beginning balance | 5 | 12 | |
Deferral of gains (losses) arising during the period | (14) | 1 | |
Reclassification of realized (gains) losses to sales and cost of sales | (1) | (4) | |
Ending balance | $ (10) | $ 9 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Details 2) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension and post retirement [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Amortization of deferred actuarial losses, tax | $ (4) | $ (8) |
Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Deferred cash flow hedging gains (losses), tax | 5 | 0 |
Reclassification of deferred cash flow hedging (losses), tax | $ 0 | $ 1 |
Pension & Postretirement Expe_3
Pension & Postretirement Expenses (Summary Of Net Periodic Pension And Net Postretirement Plan Expenses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension And Postretirement Plan Expenses [Line Items] | ||
Service cost | $ 18 | $ 19 |
Interest cost | 50 | 46 |
Expected return on plan assets | (88) | (87) |
Net amortization | 17 | 31 |
Total | $ (3) | $ 9 |
Other Deductions, Net (Schedule
Other Deductions, Net (Schedule Of Other Deductions, Net) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Other deductions, net [Line Items] | ||
Amortization of intangibles | $ 57 | $ 56 |
Restructuring costs | 10 | 15 |
Other | (17) | 7 |
Total | 50 | 78 |
Increase (decrease) in intangibles amortization from acquisitions | 17 | |
Change in gain (loss) from foreign currency exchange transactions | 13 | |
Change in pension expense (income) | $ (11) | |
Pentair's Valves & Controls [Member] | Order or Production Backlog [Member] | ||
Other deductions, net [Line Items] | ||
Backlog amortization | $ 15 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | $ 52 | |
Restructuring expense | 10 | $ 15 |
Restructuring utilized/paid | 17 | |
Ending restructuring liability | 45 | |
Severance and benefits [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | 46 | |
Restructuring expense | 5 | |
Restructuring utilized/paid | 11 | |
Ending restructuring liability | 40 | |
Lease and other contract terminations [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | 3 | |
Restructuring expense | 0 | |
Restructuring utilized/paid | 1 | |
Ending restructuring liability | 2 | |
Assets Write Downs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | 0 | |
Restructuring expense | 1 | |
Restructuring utilized/paid | 1 | |
Ending restructuring liability | 0 | |
Vacant facility and other shutdown costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | 3 | |
Restructuring expense | 2 | |
Restructuring utilized/paid | 2 | |
Ending restructuring liability | 3 | |
Start-up and moving costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning restructuring liability | 0 | |
Restructuring expense | 2 | |
Restructuring utilized/paid | 2 | |
Ending restructuring liability | 0 | |
Automation Solutions [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring expense | 5 | 10 |
Commercial & Residential Solutions [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring expense | 5 | 5 |
Climate Technologies [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring expense | 3 | 5 |
Tools & Home Products [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring expense | $ 2 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Federal tax rate | 21.00% | 35.00% | ||
Net income tax expense (benefit), tax reform | $ (43) | $ (189) | ||
Net income tax expense (benefit), tax reform, per diluted share | $ (0.07) | $ (0.30) | ||
One-time tax on deemed repatriation of accumulated foreign earnings, offset by unrecognized tax benefits | $ 100 | |||
Income taxes | $ 124 | $ 109 | ||
Effective income tax rate | 21.00% | 22.00% | ||
Favorable discrete items, percentage impact | 3.00% |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Increase (decrease) in incentive stock compensation expense | $ (63) | |
Net sales | 4,147 | $ 3,816 |
Earnings | 591 | 503 |
Operating Segments [Member] | Automation Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 2,799 | 2,572 |
Earnings | 407 | 386 |
Operating Segments [Member] | Commercial & Residential Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,338 | 1,252 |
Earnings | 237 | 252 |
Operating Segments [Member] | Climate Technologies [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 880 | 922 |
Earnings | 146 | 165 |
Operating Segments [Member] | Tools & Home Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 458 | 330 |
Earnings | 91 | 87 |
Differences in accounting methods [Member] | ||
Segment Reporting Information [Line Items] | ||
Earnings | 59 | 51 |
Corporate and other [Member] | ||
Segment Reporting Information [Line Items] | ||
Earnings | (69) | (148) |
Intersegment Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 10 | (8) |
Earnings | $ (43) | (38) |
Pentair's Valves & Controls [Member] | Order or Production Backlog [Member] | ||
Segment Reporting Information [Line Items] | ||
Backlog amortization | 15 | |
FairValueAdjustmentToInventoryOnly [Member] | Pentair's Valves & Controls [Member] | ||
Segment Reporting Information [Line Items] | ||
Earnings | $ 10 |
Business Segment Information Pr
Business Segment Information Product Line Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,147 | $ 3,816 |
Automation Solutions [Member] | Measurement & Analytical Instrumentation [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 858 | 772 |
Automation Solutions [Member] | Valves, Actuators & Regulators [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 874 | 863 |
Automation Solutions [Member] | Industrial Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 542 | 428 |
Automation Solutions [Member] | Process Control Systems & Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 525 | 509 |
Operating Segments [Member] | Automation Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 2,799 | $ 2,572 |
Business Segment Information Ge
Business Segment Information Geographic Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 4,147 | $ 3,816 |
Reportable Geographical Components [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,137 | 3,824 |
Reportable Geographical Components [Member] | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,312 | 2,064 |
Reportable Geographical Components [Member] | Asia, Middle East & Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,106 | 1,138 |
Reportable Geographical Components [Member] | Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 719 | 622 |
Reportable Geographical Components [Member] | Automation Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,799 | 2,572 |
Reportable Geographical Components [Member] | Automation Solutions [Member] | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,405 | 1,286 |
Reportable Geographical Components [Member] | Automation Solutions [Member] | Asia, Middle East & Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 841 | 790 |
Reportable Geographical Components [Member] | Automation Solutions [Member] | Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 553 | 496 |
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,338 | 1,252 |
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 907 | 778 |
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Asia, Middle East & Africa | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 265 | 348 |
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Europe [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 166 | $ 126 |
Acquisitions and Divestitures N
Acquisitions and Divestitures Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($)$ / shares | Jul. 17, 2018USD ($) | Jul. 02, 2018USD ($) | Dec. 01, 2017USD ($) | |
Business Acquisition & Disposal [Line Items] | |||||||
Purchase price of businesses, net of cash acquired | $ 73 | $ 513 | |||||
Net sales | 4,147 | 3,816 | |||||
Goodwill | 6,468 | $ 6,468 | $ 6,455 | ||||
Proceeds from divestiture of business | 0 | $ 235 | |||||
Series of Individually Immaterial Business Acquisitions [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Net sales | 40 | ||||||
Number of additional businesses acquired | 4 | ||||||
Aventics [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Net sales | $ 425 | ||||||
Cash paid, net of cash acquired | $ 622 | ||||||
Goodwill | 358 | ||||||
Goodwill expected tax deductible amount | 20 | ||||||
Intangibles | $ 278 | ||||||
Intangible assets, weighted average useful life | 12 years | ||||||
Textron's Tools & Test [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Net sales | $ 470 | ||||||
Cash paid, net of cash acquired | $ 810 | ||||||
Goodwill | 374 | ||||||
Goodwill expected tax deductible amount | 17 | ||||||
Intangibles | $ 358 | ||||||
Intangible assets, weighted average useful life | 14 years | ||||||
Paradigm [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Net sales | $ 140 | ||||||
Cash paid, net of cash acquired | $ 505 | ||||||
Goodwill | 309 | ||||||
Goodwill expected tax deductible amount | 170 | ||||||
Intangibles | $ 238 | ||||||
Intangible assets, weighted average useful life | 11 years | ||||||
ClosetMaid [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Proceeds from divestiture of business | $ 200 | ||||||
Gain (Loss) on sales of business, net of tax | $ (24) | ||||||
After-tax disposal gain (loss) impact on diluted earnings per share | $ / shares | $ (0.04) | ||||||
After-tax proceeds on sale of business | $ 150 | ||||||
Automation Solutions [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Goodwill | $ 5,369 | 5,369 | $ 5,355 | ||||
Automation Solutions [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Number of additional businesses acquired | 3 | 2 | |||||
Climate Technologies [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Goodwill | $ 670 | $ 670 | $ 670 | ||||
Climate Technologies [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||||||
Business Acquisition & Disposal [Line Items] | |||||||
Number of additional businesses acquired | 2 |
Acquisitions and Divestitures P
Acquisitions and Divestitures Pro Forma Financial Information (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Net sales | $ 4,087 |
Net earnings common stockholders | $ 410 |
Diluted earnings per share | $ / shares | $ 0.64 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] € in Millions, $ in Millions | Jan. 31, 2019USD ($) | Jan. 31, 2019EUR (€) |
Intelligent Platforms [Member] [Member] | ||
Subsequent Event [Line Items] | ||
Cash paid, net of cash acquired | $ | $ 160 | |
1.25 Percent Notes Due October 2025 [Member] | Senior Notes [Member] | ||
Subsequent Event [Line Items] | ||
Debt, face amount | € 500 | |
Notes interest rate, percentage | 1.25% | 1.25% |
2.0 Percent Notes Due October 2029 [Member] | Senior Notes [Member] | ||
Subsequent Event [Line Items] | ||
Debt, face amount | € 500 | |
Notes interest rate, percentage | 2.00% | 2.00% |