Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2020shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2020 |
Document Transition Report | false |
Entity File Number | 1-4797 |
Entity Registrant Name | ILLINOIS TOOL WORKS INC |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 36-1258310 |
Entity Address, Address Line One | 155 Harlem Avenue |
Entity Address, City or Town | Glenview |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60025 |
City Area Code | 847 |
Local Phone Number | 724-7500 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 316,163,249 |
Entity Central Index Key | 0000049826 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
NEW YORK STOCK EXCHANGE, INC. | Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock |
Trading Symbol | ITW |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.75% Euro Notes due 2022 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.75% Euro Notes due 2022 |
Trading Symbol | ITW22 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.25% Euro Notes due 2023 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.25% Euro Notes due 2023 |
Trading Symbol | ITW23 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.250% Euro Notes due 2024 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.250% Euro Notes due 2024 |
Trading Symbol | ITW24A |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 0.625% Euro Notes due 2027 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.625% Euro Notes due 2027 |
Trading Symbol | ITW27 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 2.125% Euro Notes due 2030 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 2.125% Euro Notes due 2030 |
Trading Symbol | ITW30 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 1.00% Euro Notes due 2031 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.00% Euro Notes due 2031 |
Trading Symbol | ITW31 |
Security Exchange Name | NYSE |
NEW YORK STOCK EXCHANGE, INC. | 3.00% Euro Notes due 2034 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 3.00% Euro Notes due 2034 |
Trading Symbol | ITW34 |
Security Exchange Name | NYSE |
Statement of Income (Unaudited)
Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Operating Revenue | $ 2,564 | $ 3,609 | $ 5,792 | $ 7,161 |
Cost of revenue | 1,594 | 2,099 | 3,465 | 4,158 |
Selling, administrative, and research and development expenses | 486 | 598 | 1,046 | 1,209 |
Amortization and impairment of intangible assets | 35 | 41 | 71 | 84 |
Operating Income | 449 | 871 | 1,210 | 1,710 |
Interest expense | (51) | (55) | (102) | (118) |
Other income (expense) | 8 | 9 | 33 | 23 |
Income Before Taxes | 406 | 825 | 1,141 | 1,615 |
Income Taxes | 87 | 202 | 256 | 395 |
Net Income | $ 319 | $ 623 | $ 885 | $ 1,220 |
Net Income Per Share: | ||||
Basic (in dollars per share) | $ 1.01 | $ 1.92 | $ 2.79 | $ 3.74 |
Diluted (in dollars per share) | $ 1.01 | $ 1.91 | $ 2.78 | $ 3.72 |
Shares of Common Stock Outstanding During the Period: | ||||
Average (in shares) | 316.1 | 324.8 | 317.2 | 326 |
Average assuming dilution (in shares) | 317.4 | 326.6 | 318.6 | 327.9 |
Statement of Comprehensive Inco
Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 319 | $ 623 | $ 885 | $ 1,220 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax | 64 | (60) | (223) | (29) |
Pension and other postretirement benefit adjustments, net of tax | 10 | 5 | 19 | 9 |
Other comprehensive income (loss) | 74 | (55) | (204) | (20) |
Comprehensive Income | $ 393 | $ 568 | $ 681 | $ 1,200 |
Statement of Financial Position
Statement of Financial Position (Unaudited) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and equivalents | $ 1,812 | $ 1,981 |
Trade receivables | 2,156 | 2,461 |
Inventories | 1,167 | 1,164 |
Prepaid expenses and other current assets | 253 | 296 |
Assets held for sale | 221 | 351 |
Total current assets | 5,609 | 6,253 |
Net plant and equipment | 1,711 | 1,729 |
Goodwill | 4,443 | 4,492 |
Intangible assets | 801 | 851 |
Deferred income taxes | 470 | 516 |
Other assets | 1,229 | 1,227 |
Total assets | 14,263 | 15,068 |
Current Liabilities: | ||
Short-term debt | 4 | 4 |
Accounts payable | 402 | 472 |
Accrued expenses | 1,106 | 1,217 |
Cash dividends payable | 338 | 342 |
Income taxes payable | 152 | 48 |
Liabilities held for sale | 40 | 71 |
Total current liabilities | 2,042 | 2,154 |
Noncurrent Liabilities: | ||
Long-term debt | 7,765 | 7,754 |
Deferred income taxes | 676 | 668 |
Noncurrent income taxes payable | 413 | 462 |
Other liabilities | 1,009 | 1,000 |
Total noncurrent liabilities | 9,863 | 9,884 |
Stockholders’ Equity: | ||
Common stock | 6 | 6 |
Additional paid-in-capital | 1,317 | 1,304 |
Retained earnings | 22,612 | 22,403 |
Common stock held in treasury | (19,669) | (18,982) |
Accumulated other comprehensive income (loss) | (1,909) | (1,705) |
Noncontrolling interest | 1 | 4 |
Total stockholders’ equity | 2,358 | 3,030 |
Total liabilities and stockholders' equity | $ 14,263 | $ 15,068 |
Statement of Financial Positi_2
Statement of Financial Position (Unaudited) - Parenthetical - $ / shares shares in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
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) | 316.2 | 319.8 |
Statement of Changes in Stockho
Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Common Stock Held in Treasury | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Beginning balance at Dec. 31, 2018 | $ 3,258 | $ 6 | $ 1,253 | $ 21,217 | $ (17,545) | $ (1,677) | $ 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,220 | 1,220 | |||||
Common stock issued for stock-based compensation | 14 | (5) | 19 | ||||
Stock-based compensation expense | 22 | 22 | |||||
Repurchases of common stock | (750) | (750) | |||||
Dividends declared | (649) | (649) | |||||
Other comprehensive income (loss) | (20) | (20) | |||||
Ending balance at Jun. 30, 2019 | 3,095 | 6 | 1,270 | 21,788 | (18,276) | (1,697) | 4 |
Beginning balance at Mar. 31, 2019 | 3,200 | 6 | 1,255 | 21,488 | (17,911) | (1,642) | 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 623 | 623 | |||||
Common stock issued for stock-based compensation | 13 | 3 | 10 | ||||
Stock-based compensation expense | 12 | 12 | |||||
Repurchases of common stock | (375) | (375) | |||||
Dividends declared | (323) | (323) | |||||
Other comprehensive income (loss) | (55) | (55) | |||||
Ending balance at Jun. 30, 2019 | 3,095 | 6 | 1,270 | 21,788 | (18,276) | (1,697) | 4 |
Beginning balance at Dec. 31, 2019 | 3,030 | 6 | 1,304 | 22,403 | (18,982) | (1,705) | 4 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 885 | 885 | |||||
Common stock issued for stock-based compensation | 16 | (3) | 19 | ||||
Stock-based compensation expense | 17 | 17 | |||||
Repurchases of common stock | (706) | (706) | |||||
Dividends declared | (676) | (676) | |||||
Other comprehensive income (loss) | (204) | (204) | |||||
Noncontrolling interest | (4) | (1) | (3) | ||||
Ending balance at Jun. 30, 2020 | 2,358 | 6 | 1,317 | 22,612 | (19,669) | (1,909) | 1 |
Beginning balance at Mar. 31, 2020 | 2,284 | 6 | 1,309 | 22,631 | (19,680) | (1,983) | 1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 319 | 319 | |||||
Common stock issued for stock-based compensation | 11 | 11 | |||||
Stock-based compensation expense | 8 | 8 | |||||
Dividends declared | (338) | (338) | |||||
Other comprehensive income (loss) | 74 | 74 | |||||
Ending balance at Jun. 30, 2020 | $ 2,358 | $ 6 | $ 1,317 | $ 22,612 | $ (19,669) | $ (1,909) | $ 1 |
Statement of Changes in Stock_2
Statement of Changes in Stockholders' Equity (Unaudited) - Parenthetical - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared (in dollars per share) | $ 1.07 | $ 1 | $ 2.14 | $ 2 |
Statement of Cash Flows (Unaudi
Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Cash Provided by (Used for) Operating Activities: | |||||
Net Income | $ 319 | $ 623 | $ 885 | $ 1,220 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||||
Depreciation | 133 | 133 | |||
Amortization and impairment of intangible assets | 35 | 41 | 71 | 84 | |
Change in deferred income taxes | 22 | 39 | |||
Provision for uncollectible accounts | 4 | 3 | |||
(Income) loss from investments | (5) | (11) | |||
(Gain) loss on sale of plant and equipment | 0 | 1 | |||
(Gain) loss on sale of operations and affiliates | (1) | 6 | |||
Stock-based compensation expense | 17 | 22 | |||
Other non-cash items, net | 4 | 6 | |||
(Increase) decrease in- | |||||
Trade receivables | 302 | (116) | |||
Inventories | (14) | 11 | |||
Prepaid expenses and other assets | 23 | 14 | |||
Increase (decrease) in- | |||||
Accounts payable | (76) | 20 | |||
Accrued expenses and other liabilities | (96) | (114) | |||
Income taxes | 80 | (17) | |||
Other, net | 2 | 0 | |||
Net cash provided by operating activities | 1,351 | 1,301 | |||
Cash Provided by (Used for) Investing Activities: | |||||
Acquisition of businesses (excluding cash and equivalents) | 0 | (4) | |||
Additions to plant and equipment | (116) | (154) | |||
Proceeds from investments | 10 | 15 | |||
Proceeds from sale of plant and equipment | 5 | 6 | |||
Proceeds from sales of operations and affiliates | 0 | 2 | |||
Other, net | (2) | (16) | |||
Net cash provided by (used for) investing activities | (103) | (151) | |||
Cash Provided by (Used for) Financing Activities: | |||||
Cash dividends paid | (680) | (654) | |||
Issuance of common stock | 28 | 24 | |||
Repurchases of common stock | (706) | (750) | |||
Net proceeds from (repayments of) debt with original maturities of three months or less | 0 | (2) | |||
Proceeds from debt with original maturities of more than three months | 0 | 1,774 | |||
Repayments of debt with original maturities of more than three months | 0 | (1,350) | |||
Other, net | (17) | (12) | |||
Net cash provided by (used for) financing activities | (1,375) | (970) | |||
Effect of Exchange Rate Changes on Cash and Equivalents | (42) | (7) | |||
Cash and Equivalents: | |||||
Increase (decrease) during the period | (169) | 173 | |||
Beginning of period | 1,981 | 1,504 | $ 1,504 | ||
End of period | $ 1,812 | $ 1,677 | 1,812 | 1,677 | $ 1,981 |
Supplementary Cash Flow Information: | |||||
Cash Paid During the Period for Interest | 119 | 151 | |||
Cash Paid During the Period for Income Taxes, Net of Refunds | $ 153 | $ 373 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
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 2019 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 June 2016, the Financial Accounting Standards Board (the “FASB”) issued authoritative guidance which changes the methodology used to measure credit losses for certain financial instruments. Under prior guidance, credit loss reserves were estimated based on historical information. The new guidance requires credit loss reserves to reflect the estimated credit losses expected to be incurred over the life of the financial asset. The Company adopted this new guidance effective January 1, 2020, which did not have a material impact on the Company's results of operations or financial position. In January 2017, the FASB issued authoritative guidance which simplifies the assessment of goodwill for impairment. Under prior guidance, when the estimated fair value of a reporting unit was less than its carrying value, the fair value of the goodwill was determined by valuing the other assets and liabilities of the reporting unit. Under the new guidance, the requirement to determine the fair value of goodwill has been eliminated, and an impairment charge is recognized for the amount that the carrying value of the reporting unit exceeds its fair value. Effective January 1, 2020, the Company adopted the new guidance prospectively and will apply the new guidance during its annual assessment of goodwill in the third quarter, or earlier if a triggering event occurs. The adoption of this new accounting guidance had no impact on the Company's results of operations or financial position. In December 2019, the FASB issued authoritative guidance which simplifies certain aspects of the accounting for income taxes, including the elimination of an exception to the methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated full year loss. The Company early adopted this new guidance effective January 1, 2020, which did not have a material impact on the Company's results of operations or financial position. |
Novel Coronavirus (COVID-19)
Novel Coronavirus (COVID-19) | 6 Months Ended |
Jun. 30, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
Novel Coronavirus (COVID-19) | Novel Coronavirus (COVID-19)In early 2020, an outbreak of a novel strain of coronavirus (COVID-19) occurred in China and other jurisdictions. The COVID-19 outbreak was subsequently declared a global pandemic by the World Health Organization on March 11, 2020. In response to the outbreak, governments around the globe have taken various actions to reduce its spread, including travel restrictions, shutdowns of businesses deemed nonessential, and stay-at-home or similar orders. The COVID-19 pandemic and the measures taken globally to reduce its spread have negatively impacted the global economy, causing significant disruptions in the Company’s global operations starting primarily in the latter part of the first quarter of 2020 as COVID-19 continued to spread and impact the countries in which the Company operates and the markets the Company serves. The Company expects the disruptions caused by the COVID-19 outbreak to continue to have an adverse impact on the Company's operating results across all segments in the second half of 2020. However, the full extent of the COVID-19 outbreak in 2020 and its impact on the markets served by the Company and on the Company’s operations is highly uncertain. A prolonged outbreak will continue to interrupt the operations of the Company and its customers and suppliers. |
Divestitures
Divestitures | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures The Company routinely reviews its portfolio of businesses relative to its business portfolio criteria and evaluates if further portfolio refinements may be needed. The Company previously communicated its intent to explore options, including potential divestitures, for certain businesses with annual revenues totaling up to $1 billion. As such, the Company may commit to a plan to exit or dispose of certain businesses and present them as held for sale in periods prior to the sale of the business. In the second quarter of 2019, the Company approved plans to divest six businesses, including two businesses in the Test & Measurement and Electronics segment, one business in the Automotive OEM segment, one business in the Welding segment, and two businesses in the Specialty Products segment. These six businesses were classified as held for sale beginning in the second quarter of 2019. In the fourth quarter of 2019, the Company divested three of the held for sale businesses which included one business in the Test & Measurement and Electronics segment, one business in the Welding segment, and one business in the Specialty Products segment. For the twelve months ended December 31, 2019, the Company recorded net pre-tax gains on disposal of businesses of $44 million ($30 million after-tax, or $0.09 per diluted share) which was primarily due to the three divestitures of held for sale businesses discussed above. The net pre-tax gain was included in Other income (expense) in the Statement of Income. Operating revenue related to businesses divested in 2019 that was included in the Company's results of operations for the three months ended June 30, 2019 was $37 million, which included $16 million in the Welding segment, $17 million in the Test & Measurement and Electronics segment, and $4 million in the Specialty Products segment. Operating revenue related to businesses divested in 2019 for the six months ended June 30, 2019 was $73 million, which included $31 million in the Welding segment, $33 million in the Test & Measurement and Electronics segment, and $9 million in the Specialty Products segment. As of December 31, 2019, three of the businesses discussed above continued to be held for sale, including one business in the Test & Measurement and Electronics segment, one business in the Automotive OEM segment, and one business in the Specialty Products segment. In the first quarter of 2020, the Company concluded that the sales of the one business in the Automotive OEM segment and the one business in the Specialty Products segment previously held for sale were no longer probable of being completed within one year, primarily due to the disruptions and economic uncertainty resulting from the COVID-19 pandemic. Accordingly, these businesses were no longer presented as held for sale in the Statement of Financial Position beginning in the first quarter of 2020. As of June 30, 2020, only the one business in the Test & Measurement and Electronics segment continued to be presented as held for sale, and it is expected to be sold within one year. The assets and liabilities related to the held for sale businesses that were included in assets and liabilities held for sale in the Statement of Financial Position as of June 30, 2020 and December 31, 2019, were as follows: In millions June 30, 2020 December 31, 2019 Trade receivables $ 34 $ 81 Inventories 24 28 Net plant and equipment 16 48 Goodwill and intangible assets 142 166 Other 5 28 Total assets held for sale $ 221 $ 351 Accounts payable $ 9 $ 21 Accrued expenses 10 17 Other 21 33 Total liabilities held for sale $ 40 $ 71 Operating revenue related to the one business held for sale as of June 30, 2020 that was included in the Company's results of operations for the three and six months ended June 30, 2020 and 2019, was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Operating revenue $ 40 $ 51 $ 90 $ 102 |
Operating Revenue
Operating Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Operating Revenue | Operating Revenue The Company's 84 diversified operating divisions are organized and managed based on similar product categories 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, 2020 and 2019 was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Automotive OEM $ 361 $ 788 $ 1,057 $ 1,594 Food Equipment 336 548 819 1,066 Test & Measurement and Electronics 455 533 940 1,057 Welding 298 422 670 849 Polymers & Fluids 354 427 747 843 Construction Products 376 424 766 825 Specialty Products 387 473 801 938 Intersegment revenue (3) (6) (8) (11) Total operating revenue $ 2,564 $ 3,609 $ 5,792 $ 7,161 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, automotive original equipment manufacturers and tiers, industrial capital goods, energy 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; • 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 electronics, medical, transportation and telecommunications 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; and • metal arc welding consumables and related accessories. 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 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, general industrial, consumer durables, industrial capital goods and printing and publishing 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 closures 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, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate for the three months ended June 30, 2020 and 2019 was 21.3% and 24.5%, respectively, and 22.4% and 24.5% for the six months ended June 30, 2020 and 2019, respectively. The effective tax rate included discrete income tax benefits related to excess tax benefits from stock-based compensation of $5 million and $4 million for the three months ended June 30, 2020 and 2019, respectively, and $12 million and $9 million for the six months ended June 30, 2020 and 2019, respectively. 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 $40 million related predominantly to various intercompany transactions. The Company has recorded its best estimate of the potential exposure for these issues. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories as of June 30, 2020 and December 31, 2019 were as follows: In millions June 30, 2020 December 31, 2019 Raw material $ 448 $ 452 Work-in-process 152 131 Finished goods 656 670 LIFO reserve (89) (89) Total inventories $ 1,167 $ 1,164 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2020 2019 2020 2019 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost $ 13 $ 13 $ 2 $ 2 $ 27 $ 26 $ 4 $ 4 Interest cost 15 19 4 5 30 39 8 10 Expected return on plan assets (28) (31) (6) (5) (56) (61) (12) (11) Amortization of actuarial loss (gain) 12 6 — (1) 24 11 — (1) Amortization of prior service cost — 1 — — — 1 — — Total net periodic benefit cost $ 12 $ 8 $ — $ 1 $ 25 $ 16 $ — $ 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 $29 million to its pension plans and $5 million to its other postretirement benefit plans in 2020. As of June 30, 2020, contributions of $18 million to pension plans and $3 million to other postretirement benefit plans have been made. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt There was no commercial paper outstanding as of June 30, 2020 and December 31, 2019. As of June 30, 2020 and December 31, 2019, short-term debt included $4 million related to the 4.88% notes due through December 31, 2020. The Company has a $2.5 billion line of credit agreement with a termination date of September 27, 2024, which is available to provide additional liquidity, including to support the potential issuances of commercial paper. No amounts were outstanding under the $2.5 billion line of credit agreement as of June 30, 2020. 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, 2020 and December 31, 2019 were as follows: In millions June 30, 2020 December 31, 2019 Fair value $ 8,816 $ 8,614 Carrying value 7,769 7,758 The approximate fair values of the Company's long-term debt, including current maturities, were based on a valuation model using Level 2 observable inputs which included market rates for comparable instruments for the respective periods. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Beginning balance $ (1,983) $ (1,642) $ (1,705) $ (1,677) Foreign currency translation adjustments during the period 47 (76) (225) (33) Income taxes 17 16 2 4 Total foreign currency translation adjustments, net of tax 64 (60) (223) (29) Pension and other postretirement benefit adjustments reclassified to income 12 6 24 11 Income taxes (2) (1) (5) (2) Total pension and other postretirement benefit adjustments, net of tax 10 5 19 9 Ending balance $ (1,909) $ (1,697) $ (1,909) $ (1,697) Pension and other postretirement benefit adjustments reclassified to income related to the amortization of actuarial gains and losses and prior service cost. Refer to Note 7. Pension and Other Postretirement Benefits for additional information. The Company designated the €1.0 billion of Euro notes issued in May 2014, the €1.0 billion of Euro notes issued in May 2015 and the €1.6 billion of Euro notes issued in June 2019 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. 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 carrying values of the 2019, 2015 and 2014 Euro notes were $1.8 billion, $1.1 billion and $1.1 billion, respectively, as of June 30, 2020. The unrealized pre-tax gain recorded in Accumulated other comprehensive income (loss) related to the net investment hedge was $232 million and $239 million as of June 30, 2020 and December 31, 2019, respectively. The ending balance of Accumulated other comprehensive income (loss) as of June 30, 2020 and 2019 consisted of cumulative translation adjustment losses, net of tax, of $1.5 billion and $1.3 billion, respectively, and unrecognized pension and other postretirement benefits costs, net of tax, of $371 million and $355 million, respectively. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe 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 Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued authoritative guidance which changes the methodology used to measure credit losses for certain financial instruments. Under prior guidance, credit loss reserves were estimated based on historical information. The new guidance requires credit loss reserves to reflect the estimated credit losses expected to be incurred over the life of the financial asset. The Company adopted this new guidance effective January 1, 2020, which did not have a material impact on the Company's results of operations or financial position. In January 2017, the FASB issued authoritative guidance which simplifies the assessment of goodwill for impairment. Under prior guidance, when the estimated fair value of a reporting unit was less than its carrying value, the fair value of the goodwill was determined by valuing the other assets and liabilities of the reporting unit. Under the new guidance, the requirement to determine the fair value of goodwill has been eliminated, and an impairment charge is recognized for the amount that the carrying value of the reporting unit exceeds its fair value. Effective January 1, 2020, the Company adopted the new guidance prospectively and will apply the new guidance during its annual assessment of goodwill in the third quarter, or earlier if a triggering event occurs. The adoption of this new accounting guidance had no impact on the Company's results of operations or financial position. In December 2019, the FASB issued authoritative guidance which simplifies certain aspects of the accounting for income taxes, including the elimination of an exception to the methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated full year loss. The Company early adopted this new guidance effective January 1, 2020, which did not have a material impact on the Company's results of operations or financial position. |
Revenue | 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, automotive original equipment manufacturers and tiers, industrial capital goods, energy 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; • 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 electronics, medical, transportation and telecommunications 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; and • metal arc welding consumables and related accessories. 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 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, general industrial, consumer durables, industrial capital goods and printing and publishing 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 closures 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. |
Divestitures (Tables)
Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The assets and liabilities related to the held for sale businesses that were included in assets and liabilities held for sale in the Statement of Financial Position as of June 30, 2020 and December 31, 2019, were as follows: In millions June 30, 2020 December 31, 2019 Trade receivables $ 34 $ 81 Inventories 24 28 Net plant and equipment 16 48 Goodwill and intangible assets 142 166 Other 5 28 Total assets held for sale $ 221 $ 351 Accounts payable $ 9 $ 21 Accrued expenses 10 17 Other 21 33 Total liabilities held for sale $ 40 $ 71 Operating revenue related to the one business held for sale as of June 30, 2020 that was included in the Company's results of operations for the three and six months ended June 30, 2020 and 2019, was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Operating revenue $ 40 $ 51 $ 90 $ 102 |
Operating Revenue (Tables)
Operating Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 was as follows: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Automotive OEM $ 361 $ 788 $ 1,057 $ 1,594 Food Equipment 336 548 819 1,066 Test & Measurement and Electronics 455 533 940 1,057 Welding 298 422 670 849 Polymers & Fluids 354 427 747 843 Construction Products 376 424 766 825 Specialty Products 387 473 801 938 Intersegment revenue (3) (6) (8) (11) Total operating revenue $ 2,564 $ 3,609 $ 5,792 $ 7,161 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories as of June 30, 2020 and December 31, 2019 were as follows: In millions June 30, 2020 December 31, 2019 Raw material $ 448 $ 452 Work-in-process 152 131 Finished goods 656 670 LIFO reserve (89) (89) Total inventories $ 1,167 $ 1,164 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Costs | Pension and other postretirement benefit costs for the three and six months ended June 30, 2020 and 2019 were as follows: Three Months Ended Six Months Ended June 30, June 30, Pension Other Postretirement Benefits Pension Other Postretirement Benefits In millions 2020 2019 2020 2019 2020 2019 2020 2019 Components of net periodic benefit cost: Service cost $ 13 $ 13 $ 2 $ 2 $ 27 $ 26 $ 4 $ 4 Interest cost 15 19 4 5 30 39 8 10 Expected return on plan assets (28) (31) (6) (5) (56) (61) (12) (11) Amortization of actuarial loss (gain) 12 6 — (1) 24 11 — (1) Amortization of prior service cost — 1 — — — 1 — — Total net periodic benefit cost $ 12 $ 8 $ — $ 1 $ 25 $ 16 $ — $ 2 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and December 31, 2019 were as follows: In millions June 30, 2020 December 31, 2019 Fair value $ 8,816 $ 8,614 Carrying value 7,769 7,758 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, In millions 2020 2019 2020 2019 Beginning balance $ (1,983) $ (1,642) $ (1,705) $ (1,677) Foreign currency translation adjustments during the period 47 (76) (225) (33) Income taxes 17 16 2 4 Total foreign currency translation adjustments, net of tax 64 (60) (223) (29) Pension and other postretirement benefit adjustments reclassified to income 12 6 24 11 Income taxes (2) (1) (5) (2) Total pension and other postretirement benefit adjustments, net of tax 10 5 19 9 Ending balance $ (1,909) $ (1,697) $ (1,909) $ (1,697) |
Divestitures (Details)
Divestitures (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020USD ($)business | Dec. 31, 2019business | Jun. 30, 2019USD ($)business | Jun. 30, 2020USD ($)business | Jun. 30, 2019USD ($)business | Dec. 31, 2019USD ($)business$ / shares | Mar. 31, 2020business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Pre-tax gain on disposal | $ | $ 1 | $ (6) | |||||
Disposal group, held-for-sale | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | $ 40 | $ 51 | $ 90 | $ 102 | |||
Number of businesses held for sale | business | 3 | 6 | 6 | 3 | |||
Number of businesses divested | business | 3 | 3 | |||||
Pre-tax gain on disposal | $ | $ 44 | ||||||
Gain after tax | $ | $ 30 | ||||||
Operating revenue after tax per diluted share (in dollars per share) | $ / shares | $ 0.09 | ||||||
Disposal group, held-for-sale | Test & Measurement and Electronics | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of businesses held for sale | business | 1 | 1 | 2 | 1 | 2 | 1 | |
Number of businesses divested | business | 1 | ||||||
Disposal group, held-for-sale | Automotive OEM | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of businesses held for sale | business | 1 | 1 | 1 | 1 | 1 | ||
Disposal group, held-for-sale | Welding | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of businesses held for sale | business | 1 | 1 | |||||
Number of businesses divested | business | 1 | ||||||
Disposal group, held-for-sale | Specialty Products | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of businesses held for sale | business | 1 | 2 | 2 | 1 | 1 | ||
Number of businesses divested | business | 1 | ||||||
Disposal group, disposed of by sale, not discontinued operations | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | $ 37 | $ 73 | |||||
Disposal group, disposed of by sale, not discontinued operations | Test & Measurement and Electronics | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | 17 | 33 | |||||
Disposal group, disposed of by sale, not discontinued operations | Welding | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | 16 | 31 | |||||
Disposal group, disposed of by sale, not discontinued operations | Specialty Products | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | $ 4 | $ 9 | |||||
Maximum | Disposal group, held-for-sale | 2019 Divestitures Plan | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating revenue | $ | $ 1,000 |
Divestitures - FS Effect (Detai
Divestitures - FS Effect (Details) - 2019 Divestitures Plan - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Disposal group, disposed of by sale, not discontinued operations | |||||
Liabilities held for sale | |||||
Operating revenue | $ 37 | $ 73 | |||
Disposal group, held-for-sale | |||||
Assets held for sale | |||||
Trade receivables | $ 34 | $ 34 | $ 81 | ||
Inventories | 24 | 24 | 28 | ||
Net plant and equipment | 16 | 16 | 48 | ||
Goodwill and intangible assets | 142 | 142 | 166 | ||
Other | 5 | 5 | 28 | ||
Total assets held for sale | 221 | 221 | 351 | ||
Liabilities held for sale | |||||
Accounts payable | 9 | 9 | 21 | ||
Accrued expenses | 10 | 10 | 17 | ||
Other | 21 | 21 | 33 | ||
Total liabilities held for sale | 40 | 40 | $ 71 | ||
Operating revenue | $ 40 | $ 51 | $ 90 | $ 102 |
Operating Revenue (Details)
Operating Revenue (Details) | 6 Months Ended |
Jun. 30, 2020segmentdivision | |
Revenue from Contract with Customer [Abstract] | |
Number of company divisions | division | 84 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,564 | $ 3,609 | $ 5,792 | $ 7,161 |
Operating segments | Automotive OEM | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 361 | 788 | 1,057 | 1,594 |
Operating segments | Food Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 336 | 548 | 819 | 1,066 |
Operating segments | Test & Measurement and Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 455 | 533 | 940 | 1,057 |
Operating segments | Welding | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 298 | 422 | 670 | 849 |
Operating segments | Polymers & Fluids | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 354 | 427 | 747 | 843 |
Operating segments | Construction Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 376 | 424 | 766 | 825 |
Operating segments | Specialty Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 387 | 473 | 801 | 938 |
Intersegment revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ (3) | $ (6) | $ (8) | $ (11) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, percent | 21.30% | 24.50% | 22.40% | 24.50% |
Discrete tax expense (benefit) related to excess tax benefits from stock based compensation | $ 5 | $ 4 | $ 12 | $ 9 |
Potential decrease in unrecognized tax benefits | $ 40 | $ 40 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 448 | $ 452 |
Work-in-process | 152 | 131 |
Finished goods | 656 | 670 |
LIFO reserve | (89) | (89) |
Total inventories | $ 1,167 | $ 1,164 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Pension | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 13 | $ 13 | $ 27 | $ 26 |
Interest cost | 15 | 19 | 30 | 39 |
Expected return on plan assets | (28) | (31) | (56) | (61) |
Amortization of actuarial loss (gain) | 12 | 6 | 24 | 11 |
Amortization of prior service cost | 0 | 1 | 0 | 1 |
Total net periodic benefit cost | 12 | 8 | 25 | 16 |
Other Postretirement Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 2 | 2 | 4 | 4 |
Interest cost | 4 | 5 | 8 | 10 |
Expected return on plan assets | (6) | (5) | (12) | (11) |
Amortization of actuarial loss (gain) | 0 | (1) | 0 | (1) |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Total net periodic benefit cost | $ 0 | $ 1 | $ 0 | $ 2 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Pension | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected current year company contributions | $ 29 |
Contributions | 18 |
Other Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected current year company contributions | 5 |
Contributions | $ 3 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Commercial paper | $ 0 | $ 0 |
Short-term debt | 4,000,000 | 4,000,000 |
Long-term line of credit | 0 | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 2,500,000,000 | |
4.88% Notes Due Through December 31, 2020 | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 4,000,000 | $ 4,000,000 |
Stated interest rate | 4.88% | 4.88% |
Debt - Fair Value and Related C
Debt - Fair Value and Related Carrying Values (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Fair value | $ 8,816 | $ 8,614 |
Carrying value | $ 7,769 | $ 7,758 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of AOCI(L) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | $ 2,284 | $ 3,200 | $ 3,030 | $ 3,258 |
Other comprehensive income (loss) | 74 | (55) | (204) | (20) |
Ending balance | 2,358 | 3,095 | 2,358 | 3,095 |
Accumulated Other Comprehensive Income Attributable to Parent | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Beginning balance | (1,983) | (1,642) | (1,705) | (1,677) |
Ending balance | (1,909) | (1,697) | (1,909) | (1,697) |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Other comprehensive income (loss), adjustments during the period | 47 | (76) | (225) | (33) |
Income taxes | 17 | 16 | 2 | 4 |
Other comprehensive income (loss) | 64 | (60) | (223) | (29) |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent | ||||
Changes in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Other comprehensive income (loss), adjustments reclassified to income | 12 | 6 | 24 | 11 |
Income taxes | (2) | (1) | (5) | (2) |
Other comprehensive income (loss) | $ 10 | $ 5 | $ 19 | $ 9 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Narrative (Details) $ in Millions | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | May 31, 2015EUR (€) | May 31, 2014EUR (€) |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Cumulative translation adjustment losses, net of tax | $ 1,500 | $ 1,300 | ||||
Unrecognized pension and other postretirement benefits costs, net of tax | 371 | $ 355 | ||||
Net Investment Hedging | Euro Notes | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive income related to net investment hedge unrealized gain | 232 | $ 239 | ||||
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 | |||||
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 June 2019 | Net Investment Hedging | Euro Notes | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Face value of notes | € | € 1,600,000,000 | |||||
Long-term debt | $ 1,800 |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 7 |