Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2018shares | |
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, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 335,352,977 |
Statement of Income (Unaudited)
Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Operating Revenue | $ 3,831 | $ 3,599 | $ 7,575 | $ 7,070 |
Cost of revenue | 2,231 | 2,087 | 4,412 | 4,090 |
Selling, administrative, and research and development expenses | 620 | 603 | 1,232 | 1,211 |
Legal settlement (income) | 0 | (15) | 0 | (15) |
Amortization and impairment of intangible assets | 48 | 52 | 96 | 105 |
Operating Income | 932 | 872 | 1,835 | 1,679 |
Interest expense | (64) | (65) | (130) | (129) |
Other income (expense) | 26 | 12 | 38 | 18 |
Income Before Taxes | 894 | 819 | 1,743 | 1,568 |
Income Taxes | 228 | 232 | 425 | 445 |
Net Income | $ 666 | $ 587 | $ 1,318 | $ 1,123 |
Net Income Per Share: | ||||
Basic (in dollars per share) | $ 1.98 | $ 1.70 | $ 3.90 | $ 3.25 |
Diluted (in dollars per share) | 1.97 | 1.69 | 3.87 | 3.23 |
Cash Dividends Per Share: | ||||
Paid (in dollars per share) | 0.78 | 0.65 | 1.56 | 1.30 |
Declared (in dollars per share) | $ 0.78 | $ 0.65 | $ 1.56 | $ 1.30 |
Shares of Common Stock Outstanding During the Period: | ||||
Average (in shares) | 336.7 | 344.7 | 338.5 | 345.4 |
Average assuming dilution (in shares) | 338.9 | 347.5 | 340.8 | 348.3 |
Statement of Comprehensive Inco
Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 666 | $ 587 | $ 1,318 | $ 1,123 |
Other Comprehensive Income (Loss): | ||||
Foreign currency translation adjustments, net of tax | (299) | 117 | (216) | 271 |
Pension and other postretirement benefit adjustments, net of tax | 9 | 10 | 18 | 20 |
Comprehensive Income | $ 376 | $ 714 | $ 1,120 | $ 1,414 |
Statement of Financial Position
Statement of Financial Position (Unaudited) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash and equivalents | $ 1,628 | $ 3,094 |
Trade receivables | 2,878 | 2,628 |
Inventories | 1,320 | 1,220 |
Prepaid expenses and other current assets | 293 | 336 |
Total current assets | 6,119 | 7,278 |
Net plant and equipment | 1,783 | 1,778 |
Goodwill | 4,675 | 4,752 |
Intangible assets | 1,177 | 1,272 |
Deferred income taxes | 595 | 505 |
Other assets | 1,174 | 1,195 |
Total assets | 15,523 | 16,780 |
Current Liabilities: | ||
Short-term debt | 1,350 | 850 |
Accounts payable | 623 | 590 |
Accrued expenses | 1,224 | 1,258 |
Cash dividends payable | 262 | 266 |
Income taxes payable | 88 | 89 |
Total current liabilities | 3,547 | 3,053 |
Noncurrent Liabilities: | ||
Long-term debt | 6,069 | 7,478 |
Deferred income taxes | 704 | 164 |
Noncurrent income taxes payable | 561 | 614 |
Other liabilities | 854 | 882 |
Total noncurrent liabilities | 8,188 | 9,138 |
Stockholders’ Equity: | ||
Common stock | 6 | 6 |
Additional paid-in-capital | 1,231 | 1,218 |
Retained earnings | 20,633 | 20,210 |
Common stock held in treasury | (16,555) | (15,562) |
Accumulated other comprehensive income (loss) | (1,530) | (1,287) |
Noncontrolling interest | 3 | 4 |
Total stockholders’ equity | 3,788 | 4,589 |
Total liabilities and stockholders' equity | $ 15,523 | $ 16,780 |
Statement of Financial Positio5
Statement of Financial Position (Unaudited) - Parenthetical - $ / shares shares in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
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) | 335.4 | 341.5 |
Statement of Cash Flows (Unaudi
Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Provided by (Used for) Operating Activities: | ||
Net Income | $ 1,318 | $ 1,123 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 135 | 123 |
Amortization and impairment of intangible assets | 96 | 105 |
Change in deferred income taxes | 10 | 23 |
Provision for uncollectible accounts | 3 | 2 |
(Income) loss from investments | (5) | (11) |
(Gain) loss on sale of plant and equipment | (2) | 1 |
(Gain) loss on sale of operations and affiliates | (1) | 0 |
Stock-based compensation expense | 20 | 19 |
Other non-cash items, net | 5 | 4 |
(Increase) decrease in- | ||
Trade receivables | (288) | (186) |
Inventories | (95) | (82) |
Prepaid expenses and other assets | (3) | (112) |
Increase (decrease) in- | ||
Accounts payable | 47 | 47 |
Accrued expenses and other liabilities | (77) | (115) |
Income taxes | (7) | (14) |
Net cash provided by operating activities | 1,158 | 927 |
Cash Provided by (Used for) Investing Activities: | ||
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates | 0 | (3) |
Additions to plant and equipment | (181) | (141) |
Proceeds from investments | 10 | 18 |
Proceeds from sale of plant and equipment | 8 | 3 |
Proceeds from sales of operations and affiliates | 0 | 2 |
Other, net | (2) | (1) |
Net cash provided by (used for) investing activities | (165) | (122) |
Cash Provided by (Used for) Financing Activities: | ||
Cash dividends paid | (530) | (450) |
Issuance of common stock | 10 | 45 |
Repurchases of common stock | (1,000) | (500) |
Net proceeds from (repayments of) debt with original maturities of three months or less | (850) | 691 |
Repayments of debt with original maturities of more than three months | 0 | (652) |
Other, net | (12) | (13) |
Net cash provided by (used for) financing activities | (2,382) | (879) |
Effect of Exchange Rate Changes on Cash and Equivalents | (77) | 98 |
Cash and Equivalents: | ||
Increase (decrease) during the period | (1,466) | 24 |
Beginning of period | 3,094 | 2,472 |
End of period | 1,628 | 2,496 |
Supplementary Cash and Non-Cash Information: | ||
Cash Paid During the Period for Interest | 149 | 146 |
Cash Paid During the Period for Income Taxes, Net of Refunds | $ 422 | $ 436 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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 2017 Annual Report on Form 10-K. Certain reclassifications of prior year data have been made to conform with current year reporting. Operating Revenue — Prior to 2018, the Company recognized revenue when persuasive evidence of an arrangement existed, product had shipped and the risks and rewards of ownership had transferred or services had been rendered, the price to the customer was fixed or determinable, and collectibility was reasonably assured, which generally occurred at the time of product shipment. Effective January 1, 2018, the Company adopted new revenue recognition guidance. Under this new guidance, operating revenue is recognized at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. The Company's sales arrangements with customers are predominantly short-term in nature involving a single performance obligation related to the delivery of products and generally provide for transfer of control at the time of shipment. In limited circumstances, arrangements may include service performed over time, or there may be significant obligations to the customer that are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance. In these circumstances, operating revenue may be recognized over time as the service is provided to the customer or deferred until all significant obligations have been completed. The amount of operating revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods or services and may include adjustments for customer allowances and rebates. Customer allowances and rebates consist primarily of volume discounts and other short-term incentive programs, which are estimated at the time of sale based on historical experience and anticipated trends. Shipping and handling charges billed to customers are included in revenue and are recognized along with the related product revenue as they are considered a fulfillment cost. Sales commissions are expensed when incurred, which is generally at the time of revenue recognition. Contract liabilities associated with sales arrangements primarily relate to deferred revenue on equipment sales and prepaid service contracts. Total deferred revenue was $236 million and $205 million as of June 30, 2018 and December 31, 2017, respectively, and is short-term in nature. For additional information regarding the Company's operating revenue, see New Accounting Pronouncements below and Note 2. Operating Revenue. 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 guidance is that revenue should be recognized to depict the transfer of control 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, expanded revenue disclosures are required. The Company's sales arrangements with customers are predominantly short-term in nature and generally provide for transfer of control and risks and rewards of ownership at the time of product shipment or delivery of service. As such, the timing of revenue recognition under both the prior and new guidance is the same for the majority of the Company’s transactions. Effective January 1, 2018, the Company adopted the new revenue guidance under the modified retrospective method and recorded a cumulative-effect adjustment reducing retained earnings by $9 million as of January 1, 2018. Under the modified retrospective method of adoption, prior periods are not restated and the new guidance is applied prospectively to revenue transactions completed on or after January 1, 2018. Given the nature of the Company’s revenue transactions, the new guidance had an immaterial impact on the Company's operating revenue, results of operations, and financial position for the three and six months ended June 30, 2018. The Company updated its revenue recognition accounting policy to reflect the requirements of the new guidance and included additional disclosures regarding the Company's revenue transactions. Refer to the Company’s operating revenue accounting policy above and Note 2. Operating Revenue for additional information. 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 prior guidance. The provisions of the new guidance are being applied prospectively to intra-entity asset transfers on or after January 1, 2018 and may result in future tax rate volatility. Upon adoption of the new guidance on January 1, 2018, the Company recorded a cumulative-effect adjustment reducing deferred tax assets and retained earnings by $406 million. For the three and six months ended June 30, 2018, the impact of the new guidance on the Company's effective income tax rate was not material. In March 2017, the FASB issued authoritative guidance which changes the income statement presentation 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 ("other net periodic benefit cost"), including interest cost, expected return on assets, settlements, curtailments, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. Effective January 1, 2018, the Company adopted the new presentation of other net periodic benefit cost and restated the prior year statement of income and related disclosures for comparability, as required under the new guidance. For the three months ended June 30, 2018 and 2017, other net periodic benefit cost included in Other income (expense) was income of $5 million and $2 million, respectively. For the six months ended June 30, 2018 and 2017, other net periodic benefit cost included in Other income (expense) was income of $10 million and $4 million, respectively. Refer to Note 5. Pension and Other Postretirement Benefits for additional information. In February 2018, the FASB issued authoritative guidance which allows for an optional one-time reclassification of the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate under the "Tax Cuts and Jobs Act" (the "Act") from accumulated other comprehensive income ("AOCI") to retained earnings. The guidance is effective January 1, 2019, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2018 and to reclassify the stranded tax effects related to the Act, which resulted in an increase of $45 million to both retained earnings and accumulated other comprehensive loss. Refer to Note 8. Accumulated Other Comprehensive Income (Loss) for additional information. 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 right-of-use lease asset for all leases with a lease term greater than twelve months, including operating leases, 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, expanded disclosures will be required. This guidance is effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently reviewing its existing lease portfolio to assess the impact that the new lease accounting guidance will have on the consolidated financial statements and related disclosures. While the Company has not yet completed this review, the Company expects to recognize right-of-use assets and lease liabilities for its operating leases in the statement of financial position upon adoption. |
Operating Revenue
Operating Revenue | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Operating Revenue | Operating Revenue The Company's 85 diversified operating divisions are organized and managed based on similar product offerings and end markets, and are reported to senior management as the following seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. Operating revenue by product category, which is consistent with the Company's segment presentation, for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2018 2017 2018 2017 Automotive OEM $ 879 $ 820 $ 1,780 $ 1,648 Food Equipment 553 529 1,080 1,026 Test & Measurement and Electronics 554 519 1,097 999 Welding 440 385 863 772 Polymers & Fluids 445 437 887 863 Construction Products 444 425 872 820 Specialty Products 522 490 1,007 953 Intersegment revenue (6 ) (6 ) (11 ) (11 ) Total $ 3,831 $ 3,599 $ 7,575 $ 7,070 Prior to 2018, the Company recognized revenue when persuasive evidence of an arrangement existed, product had shipped and the risks and rewards of ownership had transferred or services had been rendered, the price to the customer was fixed or determinable, and collectibility was reasonably assured, which generally occurred at the time of product shipment. Effective January 1, 2018, the Company adopted new revenue recognition guidance. Under this new guidance, operating revenue is recognized at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Given the nature of the Company’s revenue transactions, the new guidance had an immaterial impact on the Company's operating revenue, results of operations, and financial position for the three and six months ended June 30, 2018. See Note 1. Significant Accounting Policies for additional information. The following is a description of the product offerings, end markets and typical revenue transactions for each of the Company's seven segments: Automotive OEM — This segment is a global, niche supplier to top tier OEMs, providing unique innovation to address pain points for sophisticated customers with complex problems. Businesses in this segment produce components and fasteners for automotive-related applications. This segment primarily serves the automotive original equipment manufacturers and tiers market. Products in this segment include: • plastic and metal components, fasteners and assemblies for automobiles, light trucks and other industrial uses. Products sold in this segment are primarily manufactured to the customer's specifications and are sold under long-term supply agreements with OEM auto manufacturers and other top tier auto parts suppliers. The Company typically recognizes revenue for products in this segment at the time of shipment. Certain products may be produced utilizing tooling that is owned by the customer that the Company developed and is reimbursed by the customer for the associated cost. In these arrangements, the Company typically retains a contractual right to use the customer-owned tooling for the purpose of fulfilling its obligations under the supply agreement. The Company records reimbursements for the cost of customer-owned tooling as a cost offset rather than operating revenue as tooling is not considered a product offering central to the Company's operations. Food Equipment — This segment is a highly focused and branded industry-leader in commercial food equipment differentiated by innovation and integrated service offerings. This segment primarily serves the food service, food institutional/restaurant and food retail markets. Products in this segment include: • warewashing equipment; • cooking equipment, including ovens, ranges and broilers; • refrigeration equipment, including refrigerators, freezers and prep tables; • food processing equipment, including slicers, mixers and scales; • kitchen exhaust, ventilation and pollution control systems; and • food equipment service, maintenance and repair. Revenue for equipment sold in this segment is typically recognized at the time of product shipment. In limited circumstances involving installation of equipment and customer acceptance, the Company may recognize revenue upon completion of installation and acceptance by the customer. Annual service contracts are typically sold separate from equipment and the related revenue is recognized on a straight-line basis over the annual service period. Operating revenue for on-demand service repairs and parts is recorded upon completion and customer acceptance of the work performed. Test & Measurement and Electronics — This segment is a branded and innovative producer of test and measurement and electronic manufacturing and maintenance, repair, and operations, or "MRO" solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. This segment primarily serves the electronics, general industrial, industrial capital goods, automotive original equipment manufacturers and tiers, and consumer durables markets. Products in this segment include: • equipment, consumables, and related software for testing and measuring of materials, structures, gases and fluids; • electronic assembly equipment and related consumable solder materials; • electronic components and component packaging; • static control equipment and consumables used for contamination control in clean room environments; and • pressure sensitive adhesives and components for telecommunications, electronics, medical and transportation applications. Revenue for products sold in this segment is typically recognized at the time of shipment. In limited circumstances where significant obligations to the customer are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance, revenue recognition is deferred until such obligations have been completed. Welding — This segment is a branded value-added equipment and specialty consumable manufacturer with innovative and leading technology. Businesses in this segment produce arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications. This segment primarily serves the general industrial market, which includes fabrication, shipbuilding and other general industrial markets, and energy, construction, MRO, automotive original equipment manufacturers and tiers, and industrial capital goods markets. Products in this segment include: • arc welding equipment; • metal arc welding consumables and related accessories; and • metal jacketing and other insulation products. Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment. Polymers & Fluids — This segment is a highly branded supplier to niche markets that require value-added, differentiated products. Businesses in this segment produce engineered adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. This segment primarily serves the automotive aftermarket, general industrial, MRO and construction markets. Products in this segment include: • adhesives for industrial, construction and consumer purposes; • chemical fluids which clean or add lubrication to machines; • epoxy and resin-based coating products for industrial applications; • hand wipes and cleaners for industrial applications; • fluids, polymers and other supplies for auto aftermarket maintenance and appearance; • fillers and putties for auto body repair; and • polyester coatings and patch and repair products for the marine industry. Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment. Construction Products — This segment is a branded supplier of innovative engineered fastening systems and solutions. This segment primarily serves the residential construction, renovation/remodel and commercial construction markets. Products in this segment include: • fasteners and related fastening tools for wood and metal applications; • anchors, fasteners and related tools for concrete applications; • metal plate truss components and related equipment and software; and • packaged hardware, fasteners, anchors and other products for retail. Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment. Specialty Products — This segment is focused on diversified niche market opportunities with substantial patent protection producing beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. This segment primarily serves the food and beverage, consumer durables, general industrial, printing and publishing and industrial capital goods markets. Products in this segment include: • line integration, conveyor systems and line automation for the food and beverage industries; • plastic consumables that multi-pack cans and bottles and related equipment; • foil, film and related equipment used to decorate consumer products; • product coding and marking equipment and related consumables; • plastic and metal fasteners and components for appliances; • airport ground support equipment; and • components for medical devices. Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment. In limited circumstances where significant obligations to the customer are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance, revenue is recognized when such obligations have been completed. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate for the six months ended June 30, 2018 and 2017 was 24.4% and 28.4% , respectively. The year-to-date 2018 effective tax rate was lower primarily as a result of the lower U.S. corporate federal tax rate and a discrete income tax benefit of $14 million in the first quarter of 2018 related to foreign tax credits. Additionally, the effective tax rate for both respective periods included discrete tax benefits of $6 million and $26 million in 2018 and 2017, respectively, related to excess tax benefits from stock-based compensation. On December 22, 2017, the "Tax Cuts and Jobs Act" (the “Act”) was enacted in the United States. The provisions of the Act significantly revised the U.S. corporate income tax rules. At December 31, 2017, the Company had not completed the accounting for the tax effects of enactment of the Act; however, the Company made a reasonable estimate of the effects on the existing deferred tax balances and one-time transition tax. The Company continues to analyze certain aspects of the Act and may refine its calculations, which could potentially affect the measurement of the amounts recorded at December 31, 2017. The provisional amounts recorded for the year ended December 31, 2017, and unchanged at June 30, 2018, reflect the Company’s best estimate based on information currently available and are subject to future changes due to subsequent clarification of the tax law and refinement of estimated amounts. On August 1, 2018, the U.S. Department of Treasury released proposed rules related to the one-time transition tax. The Company is currently assessing the potential impact of these proposed rules on the consolidated financial statements. 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 $18 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 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, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of June 30, 2018 and December 31, 2017 were as follows: In millions June 30, 2018 December 31, 2017 Raw material $ 499 $ 465 Work-in-process 180 141 Finished goods 730 703 LIFO reserve (89 ) (89 ) Total inventories $ 1,320 $ 1,220 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits Pension and other postretirement benefit costs for the three and six months ended June 30, 2018 and 2017 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic benefit cost: Service cost $ 15 $ 16 $ 2 $ 2 $ 30 $ 32 $ 4 $ 4 Interest cost 18 18 4 5 36 36 9 10 Expected return on plan assets (32 ) (33 ) (6 ) (5 ) (64 ) (66 ) (12 ) (11 ) Amortization of actuarial loss (gain) 11 14 — (1 ) 22 28 (1 ) (1 ) Total net periodic benefit cost $ 12 $ 15 $ — $ 1 $ 24 $ 30 $ — $ 2 The service cost component of net periodic benefit cost is presented within Cost of revenue and Selling, administrative, and research and development expenses in the statement of income while the other components of net periodic benefit cost are presented within Other income (expense). The Company expects to contribute approximately $26 million to its pension plans and $5 million to its other postretirement benefit plans in 2018 . As of June 30, 2018 , contributions of $15 million to pension plans and $3 million to other postretirement benefit plans have been made. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Short-term debt as of June 30, 2018 included $649 million related to the 1.95% notes due March 1, 2019 and $699 million related to the 6.25% notes due April 1, 2019, which were reclassified from Long-term debt to Short-term debt in the first and second quarters of 2018, respectively. There was no commercial paper outstanding as of June 30, 2018. Short-term debt as of December 31, 2017 included commercial paper of $849 million . 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, 2018 and December 31, 2017 were as follows: In millions June 30, 2018 December 31, 2017 Fair value $ 7,727 $ 8,052 Carrying value 7,419 7,479 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, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Settlement | Legal Settlement In the second quarter of 2017, the Company entered into a $95 million confidential settlement agreement to resolve a litigation matter. Based on the terms of the agreement, the Company received the settlement within 120 days of the execution of the agreement. The receipt of the settlement resulted in a favorable pre-tax impact of $15 million in the second quarter of 2017 and $80 million in the third quarter of 2017, which was included in operating income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 and 2017 : Three Months Ended Six Months Ended June 30, June 30, In millions 2018 2017 2018 2017 Beginning balance $ (1,240 ) $ (1,643 ) $ (1,287 ) $ (1,807 ) Adoption of new accounting guidance related to reclassification of certain tax effects — — (45 ) — Foreign currency translation adjustments during the period (270 ) 60 (201 ) 204 Income taxes (29 ) 57 (15 ) 67 Total foreign currency translation adjustments, net of tax (299 ) 117 (216 ) 271 Pension and other postretirement benefit adjustments during the period — — 1 — Pension and other postretirement benefit adjustments reclassified to income 11 13 21 27 Income taxes (2 ) (3 ) (4 ) (7 ) Total pension and other postretirement benefit adjustments, net of tax 9 10 18 20 Ending balance $ (1,530 ) $ (1,516 ) $ (1,530 ) $ (1,516 ) $45 million of stranded income tax effects from Accumulated other comprehensive income (loss) to Retained earnings. Refer to Note 1. Significant Accounting Policies for additional information. Pension and other postretirement benefit adjustments reclassified to income relate primarily to the amortization of actuarial losses. Refer to Note 5. Pension and Other Postretirement Benefits for additional information. 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 $1.2 billion and $1.2 billion , respectively, as of June 30, 2018 . 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 $145 million and $81 million as of June 30, 2018 and December 31, 2017 , respectively. The ending balance of Accumulated other comprehensive income (loss) as of June 30, 2018 and 2017 consisted of cumulative translation adjustment losses, net of tax, of $ 1.2 billion and $ 1.1 billion , respectively, and unrecognized pension and other postretirement benefits costs, net of tax, of $ 329 million and $ 385 million , respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's operations are organized and managed based on similar product offerings and end markets, and are reported to senior management as the following seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. Refer to 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, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operating Revenues | Operating Revenue — Prior to 2018, the Company recognized revenue when persuasive evidence of an arrangement existed, product had shipped and the risks and rewards of ownership had transferred or services had been rendered, the price to the customer was fixed or determinable, and collectibility was reasonably assured, which generally occurred at the time of product shipment. Effective January 1, 2018, the Company adopted new revenue recognition guidance. Under this new guidance, operating revenue is recognized at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. The Company's sales arrangements with customers are predominantly short-term in nature involving a single performance obligation related to the delivery of products and generally provide for transfer of control at the time of shipment. In limited circumstances, arrangements may include service performed over time, or there may be significant obligations to the customer that are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance. In these circumstances, operating revenue may be recognized over time as the service is provided to the customer or deferred until all significant obligations have been completed. The amount of operating revenue recorded reflects the consideration to which the Company expects to be entitled in exchange for goods or services and may include adjustments for customer allowances and rebates. Customer allowances and rebates consist primarily of volume discounts and other short-term incentive programs, which are estimated at the time of sale based on historical experience and anticipated trends. Shipping and handling charges billed to customers are included in revenue and are recognized along with the related product revenue as they are considered a fulfillment cost. Sales commissions are expensed when incurred, which is generally at the time of revenue recognition. Contract liabilities associated with sales arrangements primarily relate to deferred revenue on equipment sales and prepaid service contracts. Total deferred revenue was $236 million and $205 million as of June 30, 2018 and December 31, 2017, respectively, and is short-term in nature. For additional information regarding the Company's operating revenue, see New Accounting Pronouncements below and Note 2. Operating Revenue. |
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 guidance is that revenue should be recognized to depict the transfer of control 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, expanded revenue disclosures are required. The Company's sales arrangements with customers are predominantly short-term in nature and generally provide for transfer of control and risks and rewards of ownership at the time of product shipment or delivery of service. As such, the timing of revenue recognition under both the prior and new guidance is the same for the majority of the Company’s transactions. Effective January 1, 2018, the Company adopted the new revenue guidance under the modified retrospective method and recorded a cumulative-effect adjustment reducing retained earnings by $9 million as of January 1, 2018. Under the modified retrospective method of adoption, prior periods are not restated and the new guidance is applied prospectively to revenue transactions completed on or after January 1, 2018. Given the nature of the Company’s revenue transactions, the new guidance had an immaterial impact on the Company's operating revenue, results of operations, and financial position for the three and six months ended June 30, 2018. The Company updated its revenue recognition accounting policy to reflect the requirements of the new guidance and included additional disclosures regarding the Company's revenue transactions. Refer to the Company’s operating revenue accounting policy above and Note 2. Operating Revenue for additional information. 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 prior guidance. The provisions of the new guidance are being applied prospectively to intra-entity asset transfers on or after January 1, 2018 and may result in future tax rate volatility. Upon adoption of the new guidance on January 1, 2018, the Company recorded a cumulative-effect adjustment reducing deferred tax assets and retained earnings by $406 million. For the three and six months ended June 30, 2018, the impact of the new guidance on the Company's effective income tax rate was not material. In March 2017, the FASB issued authoritative guidance which changes the income statement presentation 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 ("other net periodic benefit cost"), including interest cost, expected return on assets, settlements, curtailments, and amortization of actuarial gains and losses and prior service cost, should be presented below operating income. Effective January 1, 2018, the Company adopted the new presentation of other net periodic benefit cost and restated the prior year statement of income and related disclosures for comparability, as required under the new guidance. For the three months ended June 30, 2018 and 2017, other net periodic benefit cost included in Other income (expense) was income of $5 million and $2 million, respectively. For the six months ended June 30, 2018 and 2017, other net periodic benefit cost included in Other income (expense) was income of $10 million and $4 million, respectively. Refer to Note 5. Pension and Other Postretirement Benefits for additional information. In February 2018, the FASB issued authoritative guidance which allows for an optional one-time reclassification of the stranded tax effects resulting from the change in the U.S. federal corporate income tax rate under the "Tax Cuts and Jobs Act" (the "Act") from accumulated other comprehensive income ("AOCI") to retained earnings. The guidance is effective January 1, 2019, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2018 and to reclassify the stranded tax effects related to the Act, which resulted in an increase of $45 million to both retained earnings and accumulated other comprehensive loss. Refer to Note 8. Accumulated Other Comprehensive Income (Loss) for additional information. 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 right-of-use lease asset for all leases with a lease term greater than twelve months, including operating leases, 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, expanded disclosures will be required. This guidance is effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently reviewing its existing lease portfolio to assess the impact that the new lease accounting guidance will have on the consolidated financial statements and related disclosures. While the Company has not yet completed this review, the Company expects to recognize right-of-use assets and lease liabilities for its operating leases in the statement of financial position upon adoption. |
Operating Revenue (Tables)
Operating Revenue (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Operating revenue by product category, which is consistent with the Company's segment presentation, for the three and six months ended June 30, 2018 and 2017 was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2018 2017 2018 2017 Automotive OEM $ 879 $ 820 $ 1,780 $ 1,648 Food Equipment 553 529 1,080 1,026 Test & Measurement and Electronics 554 519 1,097 999 Welding 440 385 863 772 Polymers & Fluids 445 437 887 863 Construction Products 444 425 872 820 Specialty Products 522 490 1,007 953 Intersegment revenue (6 ) (6 ) (11 ) (11 ) Total $ 3,831 $ 3,599 $ 7,575 $ 7,070 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories as of June 30, 2018 and December 31, 2017 were as follows: In millions June 30, 2018 December 31, 2017 Raw material $ 499 $ 465 Work-in-process 180 141 Finished goods 730 703 LIFO reserve (89 ) (89 ) Total inventories $ 1,320 $ 1,220 |
Pension and Other Postretirem19
Pension and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Costs | Pension and other postretirement benefit costs for the three and six months ended June 30, 2018 and 2017 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2018 2017 2018 2017 2018 2017 2018 2017 Components of net periodic benefit cost: Service cost $ 15 $ 16 $ 2 $ 2 $ 30 $ 32 $ 4 $ 4 Interest cost 18 18 4 5 36 36 9 10 Expected return on plan assets (32 ) (33 ) (6 ) (5 ) (64 ) (66 ) (12 ) (11 ) Amortization of actuarial loss (gain) 11 14 — (1 ) 22 28 (1 ) (1 ) Total net periodic benefit cost $ 12 $ 15 $ — $ 1 $ 24 $ 30 $ — $ 2 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 and December 31, 2017 were as follows: In millions June 30, 2018 December 31, 2017 Fair value $ 7,727 $ 8,052 Carrying value 7,419 7,479 |
Accumulated Other Comprehensi21
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 and 2017 : Three Months Ended Six Months Ended June 30, June 30, In millions 2018 2017 2018 2017 Beginning balance $ (1,240 ) $ (1,643 ) $ (1,287 ) $ (1,807 ) Adoption of new accounting guidance related to reclassification of certain tax effects — — (45 ) — Foreign currency translation adjustments during the period (270 ) 60 (201 ) 204 Income taxes (29 ) 57 (15 ) 67 Total foreign currency translation adjustments, net of tax (299 ) 117 (216 ) 271 Pension and other postretirement benefit adjustments during the period — — 1 — Pension and other postretirement benefit adjustments reclassified to income 11 13 21 27 Income taxes (2 ) (3 ) (4 ) (7 ) Total pension and other postretirement benefit adjustments, net of tax 9 10 18 20 Ending balance $ (1,530 ) $ (1,516 ) $ (1,530 ) $ (1,516 ) |
Significant Accounting Polici22
Significant Accounting Policies (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings (accumulated deficit) | $ 20,633 | $ 20,633 | $ 20,210 | ||||
Deferred revenue | 236 | 236 | $ 205 | ||||
Defined benefit plan, other cost (credit) | (5) | $ (2) | (10) | $ (4) | |||
Adoption of new accounting guidance related to reclassification of certain tax effects | $ 45 | $ 0 | $ 45 | $ 45 | |||
Accounting Standards Update 2016-16 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings (accumulated deficit) | (406) | ||||||
Decrease in deferred tax assets, net | (406) | ||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings (accumulated deficit) | $ (9) |
Operating Revenue (Details)
Operating Revenue (Details) | 6 Months Ended |
Jun. 30, 2018divisionSegment | |
Revenue from Contract with Customer [Abstract] | |
Number of company divisions | division | 85 |
Number of reportable segments | Segment | 7 |
Operating Revenue - Segment Rev
Operating Revenue - Segment Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Operating revenue | $ 3,831 | $ 3,599 | $ 7,575 | $ 7,070 |
Automotive OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 879 | 820 | 1,780 | 1,648 |
Food Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 553 | 529 | 1,080 | 1,026 |
Test & Measurement and Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 554 | 519 | 1,097 | 999 |
Welding | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 440 | 385 | 863 | 772 |
Polymers & Fluids | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 445 | 437 | 887 | 863 |
Construction Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 444 | 425 | 872 | 820 |
Specialty Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | 522 | 490 | 1,007 | 953 |
Intersegment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Segment revenue | $ (6) | $ (6) | $ (11) | $ (11) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Feb. 18, 2014 | Jun. 30, 2018 | Jun. 30, 2017 |
Income Tax Examination [Line Items] | |||
Effective income tax rate reconciliation, percent | 24.40% | 28.40% | |
Effective income tax rate reconciliation, tax credit, foreign, amount | $ 14 | ||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | 6 | $ 26 | |
Potential decrease in unrecognized tax benefits | $ 18 | ||
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, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 499 | $ 465 |
Work-in-process | 180 | 141 |
Finished goods | 730 | 703 |
LIFO reserve | (89) | (89) |
Total inventories | $ 1,320 | $ 1,220 |
Pension and Other Postretirem27
Pension and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Pension | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 15 | $ 16 | $ 30 | $ 32 |
Interest cost | 18 | 18 | 36 | 36 |
Expected return on plan assets | (32) | (33) | (64) | (66) |
Amortization of actuarial loss (gain) | 11 | 14 | 22 | 28 |
Total net periodic benefit cost | 12 | 15 | 24 | 30 |
Other Postretirement Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 2 | 2 | 4 | 4 |
Interest cost | 4 | 5 | 9 | 10 |
Expected return on plan assets | (6) | (5) | (12) | (11) |
Amortization of actuarial loss (gain) | 0 | (1) | (1) | (1) |
Total net periodic benefit cost | $ 0 | $ 1 | $ 0 | $ 2 |
Pension and Other Postretirem28
Pension and Other Postretirement Benefits - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Pension | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected current year company contributions | $ 26 |
Contributions | 15 |
Other Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected current year company contributions | 5 |
Contributions | $ 3 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Commercial paper | $ 0 | $ 849,000,000 |
1.95% Notes Due March 1, 2019 | ||
Debt Instrument [Line Items] | ||
Adjustment for the transfer of long term to short term debt | $ 649,000,000 | |
Stated interest rate | 1.95% | |
6.25% Notes Due April 1, 2019 | ||
Debt Instrument [Line Items] | ||
Adjustment for the transfer of long term to short term debt | $ 699,000,000 | |
Stated interest rate | 6.25% |
Debt - Fair Value and Related C
Debt - Fair Value and Related Carrying Values (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Fair value | $ 7,727 | $ 8,052 |
Carrying value | $ 7,419 | $ 7,479 |
Legal Settlement (Details)
Legal Settlement (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Loss Contingencies [Line Items] | |||||
Litigation settlement | $ 0 | $ 15 | $ 0 | $ 15 | |
Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount awarded | $ 95 | ||||
Litigation settlement, payment period | 120 days | ||||
Litigation settlement | $ 80 | $ 15 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Beginning balance | $ 4,589 | $ 4,589 | $ 4,589 | |||
Adoption of new accounting guidance related to reclassification of certain tax effects | (45) | $ 0 | (45) | (45) | ||
Ending balance | 3,788 | 3,788 | ||||
AOCI | ||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Beginning balance | $ (1,287) | (1,240) | (1,287) | $ (1,643) | (1,287) | $ (1,807) |
Ending balance | (1,530) | $ (1,240) | (1,516) | (1,530) | (1,516) | |
Accumulated Foreign Currency Translation Adjustment | ||||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||||
Other comprehensive income (loss), adjustments during the period | (270) | 60 | (201) | 204 | ||
Income taxes | (29) | 57 | (15) | 67 | ||
Other comprehensive income (loss), net of tax | (299) | 117 | (216) | 271 | ||
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 | 1 | 0 | ||
Other comprehensive income (loss), adjustments reclassified to income | 11 | 13 | 21 | 27 | ||
Income taxes | (2) | (3) | (4) | (7) | ||
Other comprehensive income (loss), net of tax | $ 9 | $ 10 | $ 18 | $ 20 |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) $ in Millions | Jan. 01, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | May 31, 2015EUR (€) | May 31, 2014EUR (€) |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Adoption of new accounting guidance related to reclassification of certain tax effects | $ 45 | $ 0 | $ 45 | $ 45 | ||||
Cumulative translation adjustment losses, net of tax | 1,200 | 1,200 | $ 1,100 | |||||
Unrecognized pension and other postretirement benefits costs, net of tax | 329 | 329 | $ 385 | |||||
Net Investment Hedging | Euro Notes | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Accumulated other comprehensive income related to net investment hedge unrealized gain | 145 | 145 | $ 81 | |||||
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 | 1,200 | 1,200 | ||||||
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 | $ 1,200 | $ 1,200 |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 7 |