Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2017shares | |
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 | Jun. 30, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 344,149,420 |
Statement of Income (Unaudited)
Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Operating Revenue | $ 3,599 | $ 3,431 | $ 7,070 | $ 6,705 |
Cost of revenue | 2,087 | 1,967 | 4,091 | 3,863 |
Selling, administrative, and research and development expenses | 586 | 617 | 1,191 | 1,214 |
Amortization and impairment of intangible assets | 52 | 55 | 105 | 114 |
Operating Income | 874 | 792 | 1,683 | 1,514 |
Interest expense | (65) | (58) | (129) | (116) |
Other income (expense) | 10 | 17 | 14 | 21 |
Income Before Taxes | 819 | 751 | 1,568 | 1,419 |
Income Taxes | 232 | 226 | 445 | 426 |
Net Income | $ 587 | $ 525 | $ 1,123 | $ 993 |
Net Income Per Share: | ||||
Basic (in dollars per share) | $ 1.70 | $ 1.47 | $ 3.25 | $ 2.76 |
Diluted (in dollars per share) | 1.69 | 1.46 | 3.23 | 2.75 |
Cash Dividends Per Share: | ||||
Paid (in dollars per share) | 0.65 | 0.55 | 1.30 | 1.10 |
Declared (in dollars per share) | $ 0.65 | $ 0.55 | $ 1.30 | $ 1.10 |
Shares of Common Stock Outstanding During the Period: | ||||
Average (in shares) | 344.7 | 356.6 | 345.4 | 359.3 |
Average assuming dilution (in shares) | 347.5 | 358.5 | 348.3 | 361.2 |
Statement of Comprehensive Inco
Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 587 | $ 525 | $ 1,123 | $ 993 |
Other Comprehensive Income (Loss): | ||||
Foreign currency translation adjustments, net of tax | 117 | (144) | 271 | 20 |
Pension and other postretirement benefit adjustments, net of tax | 10 | 6 | 20 | 14 |
Comprehensive Income | $ 714 | $ 387 | $ 1,414 | $ 1,027 |
Statement of Financial Position
Statement of Financial Position (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and equivalents | $ 2,496 | $ 2,472 |
Trade receivables | 2,629 | 2,357 |
Inventories | 1,199 | 1,076 |
Prepaid expenses and other current assets | 246 | 218 |
Total current assets | 6,570 | 6,123 |
Net plant and equipment | 1,726 | 1,652 |
Goodwill | 4,675 | 4,558 |
Intangible assets | 1,366 | 1,463 |
Deferred income taxes | 488 | 449 |
Other assets | 1,097 | 956 |
Total assets | 15,922 | 15,201 |
Current Liabilities: | ||
Short-term debt | 691 | 652 |
Accounts payable | 582 | 511 |
Accrued expenses | 1,172 | 1,202 |
Cash dividends payable | 224 | 226 |
Income taxes payable | 157 | 169 |
Total current liabilities | 2,826 | 2,760 |
Noncurrent Liabilities: | ||
Long-term debt | 7,360 | 7,177 |
Deferred income taxes | 121 | 134 |
Other liabilities | 841 | 871 |
Total noncurrent liabilities | 8,322 | 8,182 |
Stockholders’ Equity: | ||
Common stock | 6 | 6 |
Additional paid-in-capital | 1,196 | 1,188 |
Retained earnings | 20,180 | 19,505 |
Common stock held in treasury | (15,095) | (14,638) |
Accumulated other comprehensive income (loss) | (1,516) | (1,807) |
Noncontrolling interest | 3 | 5 |
Total stockholders’ equity | 4,774 | 4,259 |
Total liabilities and stockholders' equity | $ 15,922 | $ 15,201 |
Statement of Financial Positio5
Statement of Financial Position (Unaudited) - Parenthetical - $ / shares shares in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, issued (in shares) | 550 | 550 |
Common stock, outstanding (in shares) | 344.1 | 346.9 |
Statement of Cash Flows (Unaudi
Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Provided by (Used for) Operating Activities: | ||
Net Income | $ 1,123 | $ 993 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 123 | 118 |
Amortization and impairment of intangible assets | 105 | 114 |
Change in deferred income taxes | 23 | (203) |
Provision for uncollectible accounts | 2 | 6 |
(Income) loss from investments | (11) | (3) |
(Gain) loss on sale of plant and equipment | 1 | 1 |
(Gain) loss on sale of operations and affiliates | 0 | 6 |
Stock-based compensation expense | 19 | 20 |
Other non-cash items, net | 4 | 1 |
(Increase) decrease in- | ||
Trade receivables | (186) | (210) |
Inventories | (82) | (54) |
Prepaid expenses and other assets | (112) | (58) |
Increase (decrease) in- | ||
Accounts payable | 47 | 68 |
Accrued expenses and other liabilities | (115) | 0 |
Income taxes | (14) | 216 |
Other, net | 0 | (1) |
Net cash provided by operating activities | 927 | 1,014 |
Cash Provided by (Used for) Investing Activities: | ||
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates | (3) | (2) |
Additions to plant and equipment | (141) | (121) |
Proceeds from investments | 18 | 10 |
Proceeds from sale of plant and equipment | 3 | 4 |
Proceeds from sales of operations and affiliates | 2 | 2 |
Other, net | (1) | (8) |
Net cash provided by (used for) investing activities | (122) | (115) |
Cash Provided by (Used for) Financing Activities: | ||
Cash dividends paid | (450) | (398) |
Issuance of common stock | 45 | 57 |
Repurchases of common stock | (500) | (1,000) |
Net proceeds from (repayments of) debt with original maturities of three months or less | 691 | (311) |
Proceeds from debt with original maturities of more than three months | 0 | 1 |
Repayments of debt with original maturities of more than three months | (652) | (1) |
Excess tax benefits from stock-based compensation | 0 | 19 |
Other, net | (13) | (11) |
Net cash provided by (used for) financing activities | (879) | (1,644) |
Effect of Exchange Rate Changes on Cash and Equivalents | 98 | 10 |
Cash and Equivalents: | ||
Increase (decrease) during the period | 24 | (735) |
Beginning of period | 2,472 | 3,090 |
End of period | 2,496 | 2,355 |
Supplementary Cash and Non-Cash Information: | ||
Cash Paid During the Period for Interest | 146 | 133 |
Cash Paid During the Period for Income Taxes, Net of Refunds | $ 436 | $ 394 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies 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 2016 Annual Report on Form 10-K. Certain reclassifications of prior year data have been made to conform with current year reporting. New Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (the "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. Under current guidance, the Company generally recognizes operating revenue when ownership and risk of loss are transferred to the customer, which is typically at the time of product shipment or delivery of service. While the Company continues to assess the potential impact of the new guidance, we do not currently expect that the adoption of this guidance will have a material impact on our operating revenue, results of operations or financial position. However, the Company expects to provide additional disclosures in the notes to financial statements required under the new guidance. The new guidance will be effective for the Company beginning January 1, 2018 and allows for either full or modified retrospective adoption methods. The Company expects to adopt the new revenue accounting guidance utilizing the modified retrospective method. 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 with a lease term greater than twelve months in the statement of financial position, including operating leases. 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 will be effective for the Company beginning January 1, 2019, with early adoption permitted. While the Company has not yet completed its evaluation of the impact the new lease accounting guidance will have on the consolidated financial statements and related disclosures, the Company expects to recognize right of use assets and liabilities for its operating leases in the statement of financial position upon adoption. In March 2016, the FASB issued authoritative guidance that included 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. Among the more significant changes, the new guidance requires the income tax effects associated with the settlement of stock-based awards to be recognized through income tax expense rather than directly in equity. Additionally, the income tax effects related to excess tax benefits should be presented within operating cash flows in the statement of cash flows rather than as a financing activity. Excess tax benefits recognized in equity under the prior guidance were $19 million for the six months ended June 30, 2016. The Company adopted the new guidance effective January 1, 2017 and applied the newly adopted provisions prospectively. Excess tax benefits of $13 million and $26 million were included in Income Taxes in the statement of income for the three and six month periods ended June 30, 2017, respectively. The expected effect on income tax expense or net cash provided from operating activities related to future stock-based award settlements will vary each quarter and will depend on inputs such as the stock price at the time of settlement and the number of awards settled in the period presented. 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. The Company is currently assessing the potential impact the new guidance will have upon adoption. In March 2017, the FASB issued authoritative guidance which changes the income statement presentation of the components of net periodic benefit cost related to defined benefit pension and other postretirement plans. The primary change under the new guidance is that only the service cost component of net periodic benefit cost should be included in operating income and is eligible for capitalization as an asset. The other components of net periodic benefit cost, such as interest cost, the expected return on assets, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. The guidance is effective for the Company starting January 1, 2018 and will be applied retrospectively to the presentation of net periodic benefit cost and prospectively to the capitalization of service cost. The Company does not expect the adoption of this guidance to have a material impact on the results of operations or financial position. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2017 | |
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 . The acquisition of EF&C did not materially affect the Company’s results of operations or financial position for the periods presented. EF&C had operating revenue of $256 million for the six months ended June 30, 2017 which was reported within the Company’s Automotive OEM segment. As a result of the EF&C transaction, the Company recorded $185 million of goodwill and $134 million of amortizable 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 17 years, with a weighted average amortization period of 16 years. Subsequent purchase accounting adjustments may change the initial amounts recorded. The allocation of the purchase price will be completed no later than one year from the acquisition date. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
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 $58 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 or 2018. 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 | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of June 30, 2017 and December 31, 2016 were as follows: In millions June 30, 2017 December 31, 2016 Raw material $ 452 $ 407 Work-in-process 139 126 Finished goods 692 629 LIFO reserve (84 ) (86 ) Total inventories $ 1,199 $ 1,076 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits Beginning in 2017, the Company changed the method used to estimate the service and interest cost components of net periodic benefit cost related to pension and other postretirement benefit plans. The new method provides a more precise measure of the service and interest cost components of net periodic benefit cost by applying specific spot rates along the yield curve to the projected cash flows rather than a single weighted-average rate. The Company accounted for this change as a change in estimate prospectively. The change did not have a material impact on the 2017 net periodic pension and other postretirement benefit costs. Pension and other postretirement benefit costs for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2017 2016 2017 2016 2017 2016 2017 2016 Components of net periodic benefit cost: Service cost $ 16 $ 16 $ 2 $ 3 $ 32 $ 32 $ 4 $ 5 Interest cost 18 24 5 6 36 47 10 12 Expected return on plan assets (33 ) (36 ) (5 ) (5 ) (66 ) (73 ) (11 ) (11 ) Amortization of actuarial loss 14 10 (1 ) — 28 21 (1 ) — Amortization of prior service income — — — (1 ) — — — (1 ) Total net periodic benefit cost $ 15 $ 14 $ 1 $ 3 $ 30 $ 27 $ 2 $ 5 The Company expects to contribute approximately $179 million to its pension plans and $5 million to its other postretirement plans in 2017 . During the six months ended June 30, 2017 , the Company made contributions of $170 million to its pension plans, which include an additional $115 million discretionary contribution made in the second quarter of 2017. Contributions of $3 million have been made to other postretirement plans during the six months ended June 30, 2017. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term debt as of June 30, 2017 included commercial paper of $688 million . Short-term debt as of December 31, 2016 included $650 million related to the 0.90% notes paid on the February 25, 2017 due date. 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 June 30, 2017 and December 31, 2016 were as follows: In millions June 30, 2017 December 31, 2016 Fair value $ 7,898 $ 8,281 Carrying value 7,360 7,827 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. |
Legal Settlement
Legal Settlement | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Settlement | Legal Settlement In the second quarter of 2017, the Company entered into a confidential settlement agreement to resolve a litigation matter. Based on the terms of the agreement, the Company expects to receive a total of $95 million within 120 days of the execution of the agreement. The receipt of the settlement is primarily expected to have a favorable impact on the third quarter 2017 results. In the second quarter of 2017, the Company recorded a $15 million gain related to this matter which is included in operating income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2017 | |
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 six months ended June 30, 2017 and 2016 : Three Months Ended Six Months Ended June 30, June 30, In millions 2017 2016 2017 2016 Beginning balance $ (1,643 ) $ (1,332 ) $ (1,807 ) $ (1,504 ) Foreign currency translation adjustments during the period 60 (124 ) 204 — Foreign currency translation adjustments reclassified to income — — — 1 Income taxes 57 (20 ) 67 19 Total foreign currency translation adjustments, net of tax 117 (144 ) 271 20 Pension and other postretirement benefit adjustments during the period — — — 1 Pension and other postretirement benefit adjustments reclassified to income 13 9 27 20 Income taxes (3 ) (3 ) (7 ) (7 ) Total pension and other postretirement benefit adjustments, net of tax 10 6 20 14 Ending balance $ (1,516 ) $ (1,470 ) $ (1,516 ) $ (1,470 ) 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 2015 and 2014 Euro notes were $1.1 billion and $1.1 billion , respectively, as of June 30, 2017 . 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 $195 million and $375 million as of June 30, 2017 and December 31, 2016 , respectively. The ending balance of Accumulated other comprehensive income (loss) as of June 30, 2017 and 2016 consisted of cumulative translation adjustment losses, net of tax, of $ 1.1 billion and $ 1.1 billion , respectively, and unrecognized pension and other postretirement benefits costs, net of tax, of $ 385 million and $ 365 million , respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
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. |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (the "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. Under current guidance, the Company generally recognizes operating revenue when ownership and risk of loss are transferred to the customer, which is typically at the time of product shipment or delivery of service. While the Company continues to assess the potential impact of the new guidance, we do not currently expect that the adoption of this guidance will have a material impact on our operating revenue, results of operations or financial position. However, the Company expects to provide additional disclosures in the notes to financial statements required under the new guidance. The new guidance will be effective for the Company beginning January 1, 2018 and allows for either full or modified retrospective adoption methods. The Company expects to adopt the new revenue accounting guidance utilizing the modified retrospective method. 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 with a lease term greater than twelve months in the statement of financial position, including operating leases. 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 will be effective for the Company beginning January 1, 2019, with early adoption permitted. While the Company has not yet completed its evaluation of the impact the new lease accounting guidance will have on the consolidated financial statements and related disclosures, the Company expects to recognize right of use assets and liabilities for its operating leases in the statement of financial position upon adoption. In March 2016, the FASB issued authoritative guidance that included 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. Among the more significant changes, the new guidance requires the income tax effects associated with the settlement of stock-based awards to be recognized through income tax expense rather than directly in equity. Additionally, the income tax effects related to excess tax benefits should be presented within operating cash flows in the statement of cash flows rather than as a financing activity. Excess tax benefits recognized in equity under the prior guidance were $19 million for the six months ended June 30, 2016. The Company adopted the new guidance effective January 1, 2017 and applied the newly adopted provisions prospectively. Excess tax benefits of $13 million and $26 million were included in Income Taxes in the statement of income for the three and six month periods ended June 30, 2017, respectively. The expected effect on income tax expense or net cash provided from operating activities related to future stock-based award settlements will vary each quarter and will depend on inputs such as the stock price at the time of settlement and the number of awards settled in the period presented. 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. The Company is currently assessing the potential impact the new guidance will have upon adoption. In March 2017, the FASB issued authoritative guidance which changes the income statement presentation of the components of net periodic benefit cost related to defined benefit pension and other postretirement plans. The primary change under the new guidance is that only the service cost component of net periodic benefit cost should be included in operating income and is eligible for capitalization as an asset. The other components of net periodic benefit cost, such as interest cost, the expected return on assets, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. The guidance is effective for the Company starting January 1, 2018 and will be applied retrospectively to the presentation of net periodic benefit cost and prospectively to the capitalization of service cost. The Company does not expect the adoption of this guidance to have a material impact on the results of operations or financial position. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories as of June 30, 2017 and December 31, 2016 were as follows: In millions June 30, 2017 December 31, 2016 Raw material $ 452 $ 407 Work-in-process 139 126 Finished goods 692 629 LIFO reserve (84 ) (86 ) Total inventories $ 1,199 $ 1,076 |
Pension and Other Postretirem18
Pension and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Costs | Pension and other postretirement benefit costs for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2017 2016 2017 2016 2017 2016 2017 2016 Components of net periodic benefit cost: Service cost $ 16 $ 16 $ 2 $ 3 $ 32 $ 32 $ 4 $ 5 Interest cost 18 24 5 6 36 47 10 12 Expected return on plan assets (33 ) (36 ) (5 ) (5 ) (66 ) (73 ) (11 ) (11 ) Amortization of actuarial loss 14 10 (1 ) — 28 21 (1 ) — Amortization of prior service income — — — (1 ) — — — (1 ) Total net periodic benefit cost $ 15 $ 14 $ 1 $ 3 $ 30 $ 27 $ 2 $ 5 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 and December 31, 2016 were as follows: In millions June 30, 2017 December 31, 2016 Fair value $ 7,898 $ 8,281 Carrying value 7,360 7,827 |
Accumulated Other Comprehensi20
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table summarizes changes in Accumulated other comprehensive income (loss) for the three and six months ended June 30, 2017 and 2016 : Three Months Ended Six Months Ended June 30, June 30, In millions 2017 2016 2017 2016 Beginning balance $ (1,643 ) $ (1,332 ) $ (1,807 ) $ (1,504 ) Foreign currency translation adjustments during the period 60 (124 ) 204 — Foreign currency translation adjustments reclassified to income — — — 1 Income taxes 57 (20 ) 67 19 Total foreign currency translation adjustments, net of tax 117 (144 ) 271 20 Pension and other postretirement benefit adjustments during the period — — — 1 Pension and other postretirement benefit adjustments reclassified to income 13 9 27 20 Income taxes (3 ) (3 ) (7 ) (7 ) Total pension and other postretirement benefit adjustments, net of tax 10 6 20 14 Ending balance $ (1,516 ) $ (1,470 ) $ (1,516 ) $ (1,470 ) |
Significant Accounting Polici21
Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Excess tax benefits recognized in equity | $ 19 | ||
Excess tax benefits included in income taxes in the statement of income | $ 13 | $ 26 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Millions | Jul. 01, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Operating revenue | $ 3,599 | $ 3,431 | $ 7,070 | $ 6,705 | ||
Goodwill | $ 4,675 | 4,675 | $ 4,558 | |||
Engineered Fasteners and Components | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, purchase price | $ 450 | |||||
Operating revenue | $ 256 | |||||
Goodwill | 185 | |||||
Intangible assets | $ 134 | |||||
Finite-lived intangible assets, weighted average amortization period | 16 years | |||||
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 | 17 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Feb. 18, 2014 | Jun. 30, 2017 |
Income Tax Examination [Line Items] | ||
Potential decrease in unrecognized tax benefits | $ 58 | |
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 | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 452 | $ 407 |
Work-in-process | 139 | 126 |
Finished goods | 692 | 629 |
LIFO reserve | (84) | (86) |
Total inventories | $ 1,199 | $ 1,076 |
Pension and Other Postretirem25
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Pension | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 16 | $ 16 | $ 32 | $ 32 |
Interest cost | 18 | 24 | 36 | 47 |
Expected return on plan assets | (33) | (36) | (66) | (73) |
Amortization of actuarial loss | 14 | 10 | 28 | 21 |
Amortization of prior service income | 0 | 0 | 0 | 0 |
Total net periodic benefit cost | 15 | 14 | 30 | 27 |
Other Postretirement Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 2 | 3 | 4 | 5 |
Interest cost | 5 | 6 | 10 | 12 |
Expected return on plan assets | (5) | (5) | (11) | (11) |
Amortization of actuarial loss | (1) | 0 | (1) | 0 |
Amortization of prior service income | 0 | (1) | 0 | (1) |
Total net periodic benefit cost | $ 1 | $ 3 | $ 2 | $ 5 |
Pension and Other Postretirem26
Pension and Other Postretirement Benefits - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions | $ 115 | |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected current year company contributions | 179 | $ 179 |
Contributions | 170 | |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Expected current year company contributions | $ 5 | 5 |
Contributions | $ 3 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Commercial paper | $ 688 | |
Notes Payable | 0.90% Notes Due February 25, 2017 | ||
Debt Instrument [Line Items] | ||
Notes, due within one year | $ 650 | |
Stated interest rate | 0.90% |
Debt - Fair Value and Related C
Debt - Fair Value and Related Carrying Values (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Fair value | $ 7,898 | $ 8,281 |
Carrying value | $ 7,360 | $ 7,827 |
Legal Settlement (Details)
Legal Settlement (Details) - Settled Litigation $ in Millions | 3 Months Ended |
Jun. 30, 2017USD ($) | |
Loss Contingencies [Line Items] | |
Litigation settlement, amount awarded | $ 95 |
Litigation settlement, payment period | 120 days |
Gain from litigation settlement | $ 15 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ 4,259 | |||
Ending balance | $ 4,774 | 4,774 | ||
AOCI | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (1,643) | $ (1,332) | (1,807) | $ (1,504) |
Ending balance | (1,516) | (1,470) | (1,516) | (1,470) |
Accumulated Foreign Currency Translation Adjustment | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Other comprehensive income (loss), adjustments during the period | 60 | (124) | 204 | 0 |
Other comprehensive income (loss), adjustments reclassified to income | 0 | 0 | 0 | 1 |
Income taxes | 57 | (20) | 67 | 19 |
Other comprehensive income (loss), net of tax | 117 | (144) | 271 | 20 |
Accumulated Pension and Other Postretirement Benefit Adjustments | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Other comprehensive income (loss), adjustments during the period | 0 | 0 | 0 | 1 |
Other comprehensive income (loss), adjustments reclassified to income | 13 | 9 | 27 | 20 |
Income taxes | (3) | (3) | (7) | (7) |
Other comprehensive income (loss), net of tax | $ 10 | $ 6 | $ 20 | $ 14 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) $ in Millions | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | May 31, 2015EUR (€) | May 31, 2014EUR (€) |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Cumulative translation adjustment losses, net of tax | $ 1,100 | $ 1,100 | |||
Unrecognized pension and other postretirement benefits costs, net of tax | 385 | $ 365 | |||
Net Investment Hedging | Euro Notes | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accumulated other comprehensive income related to net investment hedge unrealized gain | 195 | $ 375 | |||
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) | 6 Months Ended |
Jun. 30, 2017Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 7 |