Illinois Tool Works (ITW) 10-Q 28 Oct 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Sep. 30, 2016shares
Document and Entity Information [Abstract]
Entity Registrant Name	ILLINOIS TOOL WORKS INC
Entity Central Index Key	49,826
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	351,004,744

Statement of Income (Unaudited)

Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Operating Revenue	$ 3,495	$ 3,354	$ 10,200	$ 10,130
Cost of revenue	2,027	1,953	5,890	5,947
Selling, administrative, and research and development expenses	604	581	1,818	1,819
Amortization and impairment of intangible assets	56	59	170	176
Operating Income	808	761	2,322	2,188
Interest expense	(58)	(59)	(174)	(168)
Other income (expense)	13	23	34	65
Income Before Taxes	763	725	2,182	2,085
Income Taxes	228	214	654	636
Net Income	$ 535	$ 511	$ 1,528	$ 1,449
Net Income Per Share:
Basic (in dollars per share)	$ 1.51	$ 1.40	$ 4.28	$ 3.92
Diluted (in dollars per share)	1.50	1.39	4.25	3.90
Cash Dividends Per Share:
Paid (in dollars per share)	0.55	0.485	1.65	1.455
Declared (in dollars per share)	$ 0.65	$ 0.55	$ 1.75	$ 1.52
Shares of Common Stock Outstanding During the Period:
Average (in shares)	353.5	365.1	357.3	369.3
Average assuming dilution (in shares)	355.5	367.1	359.3	371.6

Statement of Comprehensive Inco

Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 535	$ 511	$ 1,528	$ 1,449
Other Comprehensive Income (Loss):
Foreign currency translation adjustments, net of tax	(5)	(335)	15	(743)
Pension and other postretirement benefit adjustments, net of tax	7	11	21	31
Comprehensive Income (Loss)	$ 537	$ 187	$ 1,564	$ 737

Statement of Financial Position

Statement of Financial Position (Unaudited) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Current Assets:
Cash and equivalents	$ 2,299	$ 3,090
Trade receivables	2,496	2,203
Inventories	1,167	1,086
Prepaid expenses and other current assets	223	341
Total current assets	6,185	6,720
Net plant and equipment	1,702	1,577
Goodwill	4,711	4,439
Intangible assets	1,480	1,560
Deferred income taxes	467	346
Other assets	1,164	1,087
Total assets	15,709	15,729
Current Liabilities:
Short-term debt	1,364	526
Accounts payable	582	449
Accrued expenses	1,180	1,136
Cash dividends payable	228	200
Income taxes payable	132	57
Total current liabilities	3,486	2,368
Noncurrent Liabilities:
Long-term debt	6,329	6,896
Deferred income taxes	131	256
Other liabilities	970	981
Total noncurrent liabilities	7,430	8,133
Stockholders’ Equity:
Common stock	6	6
Additional paid-in-capital	1,174	1,135
Income reinvested in the business	19,223	18,316
Common stock held in treasury	(14,147)	(12,729)
Accumulated other comprehensive income (loss)	(1,468)	(1,504)
Noncontrolling interest	5	4
Total stockholders’ equity	4,793	5,228
Total liabilities and stockholders' equity	$ 15,709	$ 15,729

Statement of Cash Flows (Unaudi

Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Provided by (Used for) Operating Activities:
Net Income	$ 1,528	$ 1,449
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Depreciation	182	180
Amortization and impairment of intangible assets	170	176
Change in deferred income taxes	(228)	(35)
Provision for uncollectible accounts	7	6
(Income) loss from investments	(5)	(1)
(Gain) loss on sale of plant and equipment	2	1
(Gain) loss on sale of operations and affiliates	6	(16)
Stock-based compensation expense	31	33
Other non-cash items, net	(4)	7
(Increase) decrease in-
Trade receivables	(198)	(157)
Inventories	(47)	(32)
Prepaid expenses and other assets	(30)	22
Increase (decrease) in-
Accounts payable	23	13
Accrued expenses and other liabilities	(8)	(88)
Income taxes	209	38
Other, net	0	0
Net cash provided by (used for) operating activities	1,638	1,596
Cash Provided by (Used for) Investing Activities:
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates	(456)	(6)
Additions to plant and equipment	(202)	(209)
Proceeds from investments	17	17
Proceeds from sale of plant and equipment	11	19
Proceeds from sales of operations and affiliates	1	29
Other, net	(8)	(3)
Net cash provided by (used for) investing activities	(637)	(153)
Cash Provided by (Used for) Financing Activities:
Cash dividends paid	(593)	(542)
Issuance of common stock	74	48
Repurchases of common stock	(1,482)	(2,002)
Net proceeds from (repayments of) debt with original maturities of three months or less	188	(662)
Proceeds from debt with original maturities of more than three months	1	1,098
Repayments of debt with original maturities of more than three months	(1)	(1)
Excess tax benefits from stock-based compensation	25	18
Other, net	(11)	(11)
Net cash provided by (used for) financing activities	(1,799)	(2,054)
Effect of Exchange Rate Changes on Cash and Equivalents	7	(378)
Cash and Equivalents:
Increase (decrease) during the period	(791)	(989)
Beginning of period	3,090	3,990
End of period	2,299	3,001
Supplementary Cash and Non-Cash Information:
Cash Paid During the Period for Interest	198	178
Cash Paid During the Period for Income Taxes, Net of Refunds	$ 648	$ 585

Financial Statements

Financial Statements	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Financial Statements	Financial Statements The unaudited financial statements included herein have been prepared by Illinois Tool Works Inc. and Subsidiaries (the “Company”). In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. It is suggested that these financial statements be read in conjunction with the financial statements and notes to financial statements included in the Company’s 2015 Annual Report on Form 10-K. Certain reclassifications of prior year data have been made to conform with current year reporting. In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for revenue recognition. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, several new revenue recognition disclosures will be required. This guidance is effective for the Company beginning January 1, 2018. The Company is currently assessing the potential impact the guidance will have upon adoption. In February 2016, the FASB issued authoritative guidance to change the criteria for recognizing leasing transactions. Under the new guidance, a lessee will be required to recognize a lease liability and lease asset for all leases, including operating leases, with a lease term greater than twelve months in the statement of financial position. Subsequent measurement, including presentation of expenses and cash flows, will depend on the classification of the lease as either a financing or operating lease. In addition, several new disclosures will be required. This guidance is effective for the Company beginning January 1, 2019. The Company is currently assessing the potential impact the guidance will have upon adoption. In March 2016, the FASB issued authoritative guidance that includes several changes to simplify the accounting for stock-based compensation, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification of tax benefits in the statement of cash flows. The new guidance will require that the income tax effects associated with the settlement of stock-based awards after adoption of the guidance be recognized through income tax expense rather than directly in equity. The income tax effects related to excess tax benefits will also be presented as an operating cash flow in the statement of cash flows rather than a financing activity for all periods presented. This guidance is effective for the Company beginning January 1, 2017, with early adoption permitted. For the nine months ended September 30, 2016 and 2015, the Company classified $25 million and $18 million, respectively, of excess tax benefits as a financing activity in the statement of cash flows which will be presented as an operating cash flow under the new guidance. The expected effect on income tax expense or operating cash flows for stock-based awards settled after adoption of the new guidance will depend on inputs such as the stock price and the number of stock-based awards settled in the period presented. In August 2016, the FASB issued authoritative guidance to clarify the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The objective of the new guidance is to reduce the diversity in practice of the presentation and classification of certain transactions. This guidance is effective for the Company beginning January 1, 2018, with early adoption permitted. The adoption of this standard is not expected to have a material impact. In October 2016, the FASB issued authoritative guidance requiring the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than when transferred to a third party as required under the current guidance. The new guidance is effective for the Company beginning January 1, 2018, with early adoption permitted. The Company is currently assessing the potential impact the guidance will have upon adoption.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company and its subsidiaries file tax returns in the U.S. and various state, local and foreign jurisdictions. These tax returns are routinely audited by the tax authorities in these jurisdictions, including the Internal Revenue Service ("IRS"), Her Majesty's Revenue and Customs, German Fiscal Authority, French Fiscal Authority, and Australian Tax Office, and a number of these audits are currently ongoing, which may increase the amount of the unrecognized tax benefits in future periods. Due to the ongoing audits, the Company believes it is reasonably possible that within the next twelve months the amount of the Company's unrecognized tax benefits may be decreased by approximately $104 million related predominantly to various intercompany transactions. The Company has recorded its best estimate of the potential exposure for these issues. On February 18, 2014, the Company received a Notice of Deficiency (“NOD”) from the IRS asserting that a non-taxable return of capital received from a subsidiary was a taxable dividend distribution. The NOD assesses additional taxes of $70 million for the 2006 tax year, plus interest and penalties. In May 2014, the Company petitioned the United States Tax Court to challenge the NOD. The Company's petition was subsequently denied and the case proceeded to court with the trial taking place in the third quarter of 2016. Final decision by the tax court is expected in 2017. Although the court's final decision cannot be predicted with certainty, the Company believes its position continues to be supportable. Accordingly, no reserve has been recorded related to this matter.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories as of September 30, 2016 and December 31, 2015 were as follows: In millions September 30, 2016 December 31, 2015 Raw material $ 430 $ 415 Work-in-process 145 130 Finished goods 674 622 LIFO reserve (82 ) (81 ) Total inventories $ 1,167 $ 1,086

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill represents the excess cost over fair value of the net assets of purchased businesses. The Company does not amortize goodwill and intangible assets that have indefinite lives. The Company performs an impairment assessment of goodwill and intangible assets with indefinite lives annually, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When performing its annual impairment assessment, the Company evaluates the goodwill assigned to each of its reporting units for potential impairment by comparing the estimated fair value of the relevant reporting unit to the carrying value. The Company uses various Level 2 and Level 3 valuation techniques to determine the fair value of its reporting units, including discounting estimated future cash flows based on a detailed cash flow forecast prepared by the relevant reporting unit and market multiples of relevant public companies. If the fair value of a reporting unit is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of the reporting unit's goodwill. The Company's indefinite-lived intangible assets consist of trademarks and brands. The estimated fair values of these intangible assets are determined based on a Level 3 valuation method using a relief-from-royalty income approach derived from internally forecasted revenues of the related products. If the fair value of the trademark or brand is less than its carrying value, an impairment loss is recorded for the difference between the estimated fair value and carrying value of the intangible asset. The Company performed its annual impairment assessment of goodwill and indefinite-lived intangible assets in the third quarter of 2016 and 2015 . The assessment resulted in no impairment charges in 2016. In 2015, the Company recorded a $2 million indefinite-lived intangible asset impairment charge related to a brand in the Polymers & Fluids segment which had a fair value of $24 million and a carrying value of $26 million .

Pension and Other Postretiremen

Pension and Other Postretirement Benefits	9 Months Ended
	Sep. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Pension and Other Postretirement Benefits	Pension and Other Postretirement Benefits Pension and other postretirement benefit costs for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, September 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2016 2015 2016 2015 2016 2015 2016 2015 Components of net periodic benefit cost: Service cost $ 15 $ 18 $ 2 $ 3 $ 47 $ 54 $ 7 $ 8 Interest cost 23 23 6 6 70 69 18 18 Expected return on plan assets (36 ) (38 ) (6 ) (7 ) (109 ) (114 ) (17 ) (19 ) Amortization of actuarial loss 11 15 — — 32 45 — — Amortization of prior service income — — — — — — (1 ) — Net periodic benefit cost $ 13 $ 18 $ 2 $ 2 $ 40 $ 54 $ 7 $ 7 The Company expects to contribute approximately $73 million to its pension plans and $5 million to its other postretirement plans in 2016 . As of September 30, 2016 , contributions of $66 million to pension plans and $4 million to other postretirement plans have been made.

Debt

Debt	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Debt	Debt Short-term debt as of September 30, 2016 and December 31, 2015 included commercial paper of $687 million and $498 million , respectively. In addition, in the first quarter of 2016, the Company reclassified $649 million related to the 0.90% notes due February 25, 2017 from Long-term debt to Short-term debt. During the second quarter of 2016, the Company entered into a $2.5 billion, five-year line of credit agreement with a termination date of May 9, 2021. This agreement replaced the existing $1.5 billion line of credit agreement with a termination date of June 8, 2017 and $1.0 billion line of credit agreement with a termination date of August 15, 2018. No amount was outstanding under this agreement as of September 30, 2016. The approximate fair value and related carrying value of the Company's total long-term debt, including current maturities of long-term debt presented as short-term debt, as of September 30, 2016 and December 31, 2015 were as follows: In millions September 30, 2016 December 31, 2015 Fair value $ 7,860 $ 7,153 Carrying value 6,979 6,897 The approximate fair values of the Company's long-term debt, including current maturities, were based on a valuation model, using Level 2 observable inputs which included market rates for comparable instruments for the respective periods.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) The following table summarizes changes in Accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended September 30, September 30, In millions 2016 2015 2016 2015 Beginning balance $ (1,470 ) $ (1,046 ) $ (1,504 ) $ (658 ) Foreign currency translation adjustments during the period (15 ) (337 ) (15 ) (711 ) Foreign currency translation adjustments reclassified to income — — 1 — Income taxes 10 2 29 (32 ) Foreign currency translation adjustments, net of tax (5 ) (335 ) 15 (743 ) Pension and other postretirement benefit adjustments during the period — 1 1 (1 ) Pension and other postretirement benefit adjustments reclassified to income 11 15 31 45 Income taxes (4 ) (5 ) (11 ) (13 ) Pension and other postretirement benefit adjustments, net of tax 7 11 21 31 Ending balance $ (1,468 ) $ (1,370 ) $ (1,468 ) $ (1,370 ) The Company designated the € 1.0 billion of Euro notes issued in May 2015 and the € 1.0 billion of Euro notes issued in May 2014 as hedges of a portion of its net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. The carrying values of the Euro notes were $1.1 billion and $1.1 billion , respectively, as of September 30, 2016 . Changes in the value of this debt resulting from fluctuations in the Euro to U.S. dollar exchange rate have been recorded as foreign currency translation adjustments within Accumulated other comprehensive income (loss). The unrealized pre-tax gain recorded in Accumulated other comprehensive income (loss) related to the net investment hedge was $232 million and $308 million as of September 30, 2016 and December 31, 2015 , respectively. The ending balance of Accumulated other comprehensive income (loss) as of September 30, 2016 and 2015 consisted of cumulative translation adjustment losses, net of tax, of $ 1.1 billion and $ 1.0 billion , respectively, and unrecognized pension and other postretirement benefits costs, net of tax, of $ 358 million and $ 362 million , respectively.

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2016
Segment Reporting [Abstract]
Segment Information	Segment Information The Company has seven reportable segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. See Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations for information regarding operating revenue and operating income for the Company's segments.

Acquisition

Acquisition	9 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Acquisition	Acquisition On July 1, 2016, the Company completed the acquisition of the Engineered Fasteners and Components business ("EF&C") from ZF TRW for a purchase price of approximately $ 450 million . EF&C had operating revenue of $117 million for the three months ended September 30, 2016 which was reported within the Company’s Automotive OEM segment. The acquisition of EF&C did not materially affect the Company’s results of operations or financial position for any period presented. Based on preliminary acquisition accounting, the Company allocated $236 million to goodwill and $95 million to intangible assets, primarily related to customer relationships and technology. The intangible assets are expected to be amortized on a straight-line basis over their estimated useful lives ranging from 4 to 19 years. The Company anticipates subsequent acquisition accounting adjustments will change the initial amounts recorded for goodwill and intangible assets, primarily due to the completion of valuations. The allocation of purchase price will be completed as soon as practicable, but no later than one year from the acquisition date.

Financial Statements (Policies)

Financial Statements (Policies)	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
New Accounting Pronouncements	In May 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for revenue recognition. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, several new revenue recognition disclosures will be required. This guidance is effective for the Company beginning January 1, 2018. The Company is currently assessing the potential impact the guidance will have upon adoption. In February 2016, the FASB issued authoritative guidance to change the criteria for recognizing leasing transactions. Under the new guidance, a lessee will be required to recognize a lease liability and lease asset for all leases, including operating leases, with a lease term greater than twelve months in the statement of financial position. Subsequent measurement, including presentation of expenses and cash flows, will depend on the classification of the lease as either a financing or operating lease. In addition, several new disclosures will be required. This guidance is effective for the Company beginning January 1, 2019. The Company is currently assessing the potential impact the guidance will have upon adoption. In March 2016, the FASB issued authoritative guidance that includes several changes to simplify the accounting for stock-based compensation, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification of tax benefits in the statement of cash flows. The new guidance will require that the income tax effects associated with the settlement of stock-based awards after adoption of the guidance be recognized through income tax expense rather than directly in equity. The income tax effects related to excess tax benefits will also be presented as an operating cash flow in the statement of cash flows rather than a financing activity for all periods presented. This guidance is effective for the Company beginning January 1, 2017, with early adoption permitted. For the nine months ended September 30, 2016 and 2015, the Company classified $25 million and $18 million, respectively, of excess tax benefits as a financing activity in the statement of cash flows which will be presented as an operating cash flow under the new guidance. The expected effect on income tax expense or operating cash flows for stock-based awards settled after adoption of the new guidance will depend on inputs such as the stock price and the number of stock-based awards settled in the period presented. In August 2016, the FASB issued authoritative guidance to clarify the presentation and classification of certain cash receipts and cash payments in the statement of cash flows. The objective of the new guidance is to reduce the diversity in practice of the presentation and classification of certain transactions. This guidance is effective for the Company beginning January 1, 2018, with early adoption permitted. The adoption of this standard is not expected to have a material impact. In October 2016, the FASB issued authoritative guidance requiring the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs rather than when transferred to a third party as required under the current guidance. The new guidance is effective for the Company beginning January 1, 2018, with early adoption permitted. The Company is currently assessing the potential impact the guidance will have upon adoption.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Inventories	Inventories as of September 30, 2016 and December 31, 2015 were as follows: In millions September 30, 2016 December 31, 2015 Raw material $ 430 $ 415 Work-in-process 145 130 Finished goods 674 622 LIFO reserve (82 ) (81 ) Total inventories $ 1,167 $ 1,086

Pension and Other Postretirem17

Pension and Other Postretirement Benefits (Tables)	9 Months Ended
	Sep. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Pension and Other Postretirement Benefit Costs	Pension and other postretirement benefit costs for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended Nine Months Ended September 30, September 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2016 2015 2016 2015 2016 2015 2016 2015 Components of net periodic benefit cost: Service cost $ 15 $ 18 $ 2 $ 3 $ 47 $ 54 $ 7 $ 8 Interest cost 23 23 6 6 70 69 18 18 Expected return on plan assets (36 ) (38 ) (6 ) (7 ) (109 ) (114 ) (17 ) (19 ) Amortization of actuarial loss 11 15 — — 32 45 — — Amortization of prior service income — — — — — — (1 ) — Net periodic benefit cost $ 13 $ 18 $ 2 $ 2 $ 40 $ 54 $ 7 $ 7

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Approximate Fair Value and Related Carrying Value of Long-term Debt, Including Current Maturities	The approximate fair value and related carrying value of the Company's total long-term debt, including current maturities of long-term debt presented as short-term debt, as of September 30, 2016 and December 31, 2015 were as follows: In millions September 30, 2016 December 31, 2015 Fair value $ 7,860 $ 7,153 Carrying value 6,979 6,897

Accumulated Other Comprehensi19

Accumulated Other Comprehensive Income (Loss) (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss)	The following table summarizes changes in Accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended Nine Months Ended September 30, September 30, In millions 2016 2015 2016 2015 Beginning balance $ (1,470 ) $ (1,046 ) $ (1,504 ) $ (658 ) Foreign currency translation adjustments during the period (15 ) (337 ) (15 ) (711 ) Foreign currency translation adjustments reclassified to income — — 1 — Income taxes 10 2 29 (32 ) Foreign currency translation adjustments, net of tax (5 ) (335 ) 15 (743 ) Pension and other postretirement benefit adjustments during the period — 1 1 (1 ) Pension and other postretirement benefit adjustments reclassified to income 11 15 31 45 Income taxes (4 ) (5 ) (11 ) (13 ) Pension and other postretirement benefit adjustments, net of tax 7 11 21 31 Ending balance $ (1,468 ) $ (1,370 ) $ (1,468 ) $ (1,370 )

Financial Statements (Details)

Financial Statements (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Excess tax benefits	$ 25	$ 18

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	Feb. 18, 2014	Sep. 30, 2016
Income Tax Examination [Line Items]
Period for unrecognized tax benefits to decrease		12 months
Potential decrease in unrecognized tax benefits		$ 104
Internal Revenue Service (IRS) | Tax Year 2006
Income Tax Examination [Line Items]
IRS Notice of Deficiency tax assessment	$ 70

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw material	$ 430	$ 415
Work-in-process	145	130
Finished goods	674	622
LIFO reserve	(82)	(81)
Total inventories	$ 1,167	$ 1,086

Goodwill and Intangible Assets

Goodwill and Intangible Assets - Narrative (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and indefinite-lived intangible asset impairment charges	$ 0
Indefinite-lived intangible asset impairment charges		$ 2,000,000
Indefinite-lived intangible assets, fair value			$ 24,000,000
Indefinite-lived intangible assets, carrying value			$ 26,000,000

Pension and Other Postretirem24

Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Pension
Components of net periodic benefit cost:
Service cost	$ 15	$ 18	$ 47	$ 54
Interest cost	23	23	70	69
Expected return on plan assets	(36)	(38)	(109)	(114)
Amortization of actuarial loss	11	15	32	45
Amortization of prior service income	0	0	0	0
Net periodic benefit cost	13	18	40	54
Other Postretirement Benefits
Components of net periodic benefit cost:
Service cost	2	3	7	8
Interest cost	6	6	18	18
Expected return on plan assets	(6)	(7)	(17)	(19)
Amortization of actuarial loss	0	0	0	0
Amortization of prior service income	0	0	(1)	0
Net periodic benefit cost	$ 2	$ 2	$ 7	$ 7

Pension and Other Postretirem25

Pension and Other Postretirement Benefits - Narrative (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Pension
Defined Benefit Plan Disclosure [Line Items]
Expected current year company contributions	$ 73
Contributions	66
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Expected current year company contributions	5
Contributions	$ 4

Debt - Narrative (Details)

Debt - Narrative (Details) - USD ($)	3 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Outstanding commercial paper			$ 687,000,000	$ 498,000,000
Long-term debt reclassified to short-term debt		$ 649,000,000
Notes Payable, Other Payables | 0.90% Notes Due February 25, 2017
Debt Instrument [Line Items]
Stated interest rate			0.90%
Line of Credit Terminating May 9, 2021
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 2,500,000,000
Expiration period	5 years
Long-term debt			$ 0
Line of Credit Terminating June 8, 2017
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 1,500,000,000
Line of Credit Terminating August 15, 2018
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 1,000,000,000

Debt - Fair Value and Related C

Debt - Fair Value and Related Carrying Values (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Fair value	$ 7,860	$ 7,153
Carrying value	$ 6,979	$ 6,897

Accumulated Other Comprehensi28

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Changes in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance			$ 5,228
Ending balance	$ 4,793		4,793
AOCI
Changes in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	(1,470)	$ (1,046)	(1,504)	$ (658)
Ending balance	(1,468)	(1,370)	(1,468)	(1,370)
Accumulated Foreign Currency Translation Adjustment
Changes in Accumulated Other Comprehensive Income [Roll Forward]
Other comprehensive income (loss) adjustments during the period	(15)	(337)	(15)	(711)
Other comprehensive income (loss), adjustments reclassified to income	0	0	1	0
Income taxes	10	2	29	(32)
Other comprehensive income (loss), net of tax	(5)	(335)	15	(743)
Accumulated Pension and Other Postretirement Benefit Adjustments
Changes in Accumulated Other Comprehensive Income [Roll Forward]
Other comprehensive income (loss) adjustments during the period	0	1	1	(1)
Other comprehensive income (loss), adjustments reclassified to income	11	15	31	45
Income taxes	(4)	(5)	(11)	(13)
Other comprehensive income (loss), net of tax	$ 7	$ 11	$ 21	$ 31

Accumulated Other Comprehensi29

Accumulated Other Comprehensive Income (Loss) - Narrative (Details) $ in Millions	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)	May 31, 2015EUR (€)	May 31, 2014EUR (€)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Cumulative translation adjustment losses, net of tax	$ 1,100		$ 1,000
Unrecognized pension and other postretirement benefits costs, net of tax	358		$ 362
Net Investment Hedging | Euro Notes
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income related to net investment hedge unrealized gain	232	$ 308
Euro Notes Issued May 2015 | Net Investment Hedging | Euro Notes
Accumulated Other Comprehensive Income (Loss) [Line Items]
Face value of notes | €				€ 1,000,000,000
Long-term debt	1,100
Euro Notes Issued May 2014 | Net Investment Hedging | Euro Notes
Accumulated Other Comprehensive Income (Loss) [Line Items]
Face value of notes | €					€ 1,000,000,000
Long-term debt	$ 1,100

Segment Information (Details)

Segment Information (Details)	9 Months Ended
	Sep. 30, 2016Segment
Segment Reporting [Abstract]
Number of reportable segments	7

Acquisition (Details)

Acquisition (Details) - USD ($) $ in Millions	Jul. 01, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Business Acquisition [Line Items]
Operating revenue		$ 3,495	$ 3,354	$ 10,200	$ 10,130
Goodwill		4,711		$ 4,711		$ 4,439
Engineered Fasteners and Components
Business Acquisition [Line Items]
Business acquisition, purchase price	$ 450
Operating revenue		$ 117
Goodwill	236
Intangible assets	$ 95
Minimum | Engineered Fasteners and Components
Business Acquisition [Line Items]
Finite-lived intangible assets, estimated useful life	4 years
Maximum | Engineered Fasteners and Components
Business Acquisition [Line Items]
Finite-lived intangible assets, estimated useful life	19 years