x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 36-1258310 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
155 Harlem Avenue, Glenview, Illinois | 60025 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock | New York Stock Exchange | |
1.75% Euro Notes due 2022 | New York Stock Exchange | |
1.25% Euro Notes due 2023 | New York Stock Exchange | |
2.125% Euro Notes due 2030 | New York Stock Exchange | |
3.00% Euro Notes due 2034 | New York Stock Exchange |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
Portions of the 2017 Proxy Statement for Annual Meeting of Stockholders to be held on May 5, 2017. | Part III |
Table of Contents | ||
PART I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
• | plastic and metal components, fasteners and assemblies for automobiles, light trucks and other industrial uses. |
• | 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. |
• | 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. |
• | arc welding equipment; |
• | metal arc welding consumables and related accessories; and |
• | metal jacketing and other insulation products. |
• | 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. |
• | 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. |
• | 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. |
• | ITW’s 80/20 management process is the operating system that is applied in every ITW business. Initially introduced as a manufacturing efficiency tool in the 1980’s, ITW has continually refined, improved and expanded 80/20 into a proprietary, holistic business management process that generates significant value for the Company and its customers. Through the application of data-driven insights generated by 80/20 practice, ITW focuses on its largest and best opportunities (the “80”) and eliminates cost, complexity and distractions associated with the less profitable opportunities (the “20”). 80/20 enables ITW businesses to consistently achieve world-class operational excellence in product availability, quality, and innovation, while generating superior financial performance; |
• | Customer-back innovation has fueled decades of profitable growth at ITW. The Company’s unique innovation approach is built on insight gathered from the 80/20 management process. Working from the customer back, ITW businesses position themselves as the go-to problem solver for their “80” customers. ITW’s innovation efforts are focused on understanding customer needs, particularly those in “80” markets with solid long-term growth fundamentals, and subsequently creating unique solutions to address those needs. These customer insights and learnings drive innovation at ITW and have contributed to a portfolio of more than 17,000 granted and pending patents; |
• | ITW’s decentralized, entrepreneurial culture allows ITW businesses to be fast, focused, and responsive. ITW businesses have significant flexibility within the framework of the ITW Business Model to customize their approach in order to best serve their specific customers' needs. ITW colleagues recognize their unique responsibilities to execute the Company's strategy and values. As a result, the Company maintains a focused and simple organizational structure that, combined with outstanding execution, delivers best-in-class services adapted to each business' customers and end markets. |
• | The first step was to narrow the focus and improve the quality of ITW’s business portfolio. As part of the Portfolio Management initiative, ITW exited businesses that were operating in commoditized market spaces and prioritized sustainable differentiation as a must-have requirement for all ITW businesses. This process included both divesting entire businesses and exiting commoditized product lines and customers inside otherwise highly differentiated ITW divisions. |
• | Step two, Business Structure Simplification, was implemented to simplify and scale-up ITW’s operating structure to support increased engineering, marketing, and sales resources, and, at the same time, improve global reach and competitiveness, all of which were critical to driving accelerated organic growth. ITW now has 85 scaled-up divisions with significantly enhanced focus on growth investments, core customers and products, and customer-back innovation. |
• | The Strategic Sourcing initiative was established as a core capability to better leverage ITW’s scale and improve global competitiveness. Sourcing is now a core strategic and operational capability at ITW. The Company’s 80/20-enabled sourcing organization has delivered an average of one percent reduction in spend each year from 2013 through 2016 and is on track to do the same in 2017 and 2018. |
• | With the portfolio realignment and scale-up work largely complete, the Company was able to shift its focus to preparing for and accelerating, organic growth. As a preparatory step, ITW is in the process of reapplying 80/20 to optimize its newly scaled-up divisions for growth, first, to build a foundation of operational excellence, and second, to identify the best opportunities to drive organic growth. |
• | The first lever, better leveraging the full power of the ITW Business Model, will be accomplished through a much more consistent and focused approach to 80/20 best practice implementation across the Company. The 80/20 management system has continuously been refined, improved and expanded into a unique holistic business management process of interconnected tools, which improves all aspects of the business and, when applied consistently and executed more effectively, will lead to additional margin improvement. ITW has clearly demonstrated superior 80/20 management, resulting in meaningful incremental improvement in margins and returns as evidenced by the Company’s operating margin and after-tax return on invested capital. These 80/20 initiatives can also result in restructuring initiatives that reduce costs and improve profitability and returns. |
• | The second lever, strategic sourcing, is a core element of ITW’s ongoing operational strategy and a sustainable enterprise-wide capability. Through the continued execution of this initiative, the Company expects to deliver additional margin improvement with the goal of a one percent reduction in spend in 2017 and 2018. |
In millions | 2016 | 2015 | |||||
Automotive OEM | $ | 452 | $ | 403 | |||
Food Equipment | 188 | 203 | |||||
Test & Measurement and Electronics | 298 | 289 | |||||
Welding | 67 | 68 | |||||
Polymers & Fluids | 62 | 53 | |||||
Construction Products | 29 | 34 | |||||
Specialty Products | 217 | 237 | |||||
Total | $ | 1,313 | $ | 1,287 |
Name | Office | Age | |
E. Scott Santi | Chairman & Chief Executive Officer | 55 | |
Norman D. Finch Jr. | Senior Vice President, General Counsel & Secretary | 52 | |
John R. Hartnett | Executive Vice President | 56 | |
Michael M. Larsen | Senior Vice President & Chief Financial Officer | 48 | |
Mary K. Lawler | Senior Vice President & Chief Human Resources Officer | 51 | |
Roland M. Martel | Executive Vice President | 62 | |
Steven L. Martindale | Executive Vice President | 60 | |
Sundaram Nagarajan | Executive Vice President | 54 | |
Christopher O’Herlihy | Vice Chairman | 53 | |
David C. Parry | Vice Chairman | 63 | |
Randall J. Scheuneman | Vice President & Chief Accounting Officer | 49 | |
Lei Schlitz | Executive Vice President | 50 | |
Juan Valls | Executive Vice President | 55 | |
Michael R. Zimmerman | Executive Vice President | 56 |
• | Statement of Principles of Conduct; |
• | Code of Ethics for CEO and key financial and accounting personnel; |
• | Charters of the Audit, Corporate Governance and Nominating, and Compensation Committees of the Board of Directors; |
• | Corporate Governance Guidelines; |
• | Global Anti-Corruption Policy; |
• | Corporate Citizenship Statement; |
• | Conflict Minerals Policy Statement; and |
• | Government Affairs Information. |
• | fluctuation in currency exchange rates; |
• | limitations on ownership or participation in local enterprises; |
• | price controls, exchange controls and limitations on repatriation of earnings; |
• | transportation delays and interruptions; |
• | political, social and economic instability and disruptions; |
• | acts of terrorism; |
• | government embargoes or foreign trade restrictions; |
• | the imposition of duties and tariffs and other trade barriers; |
• | import and export controls; |
• | labor unrest and current and changing regulatory environments; |
• | the potential for expropriation or nationalization of enterprises; |
• | difficulties in staffing and managing multi-national operations; |
• | limitations on its ability to enforce legal rights and remedies; and |
• | potentially adverse tax consequences. |
• | The acquired business could under-perform relative to the Company’s expectations and the price paid for it, or not perform in accordance with the Company’s anticipated timetable. |
• | The acquired business could cause the Company's financial results to differ from expectations in any given fiscal period, or over the long term. |
• | Acquisition-related earnings charges could adversely impact operating results. |
• | The acquired business could place unanticipated demands on the Company's management, operational resources and financial and internal control systems. |
• | The Company may assume unknown liabilities, known contingent liabilities that become realized or known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired business’s activities. The realization of any of these liabilities or deficiencies may increase the Company's expenses, adversely affect its financial position or cause noncompliance with its financial reporting obligations. |
• | As a result of acquisitions, the Company has in the past recorded significant goodwill and other identifiable intangible assets on its balance sheet. If the Company is not able to realize the value of these assets, it may recognize charges relating to the impairment of these assets. |
Number Of Properties | |||||||||
Owned | Leased | Total | |||||||
Automotive OEM | 59 | 38 | 97 | ||||||
Food Equipment | 24 | 17 | 41 | ||||||
Test & Measurement and Electronics | 29 | 63 | 92 | ||||||
Welding | 26 | 18 | 44 | ||||||
Polymers & Fluids | 37 | 32 | 69 | ||||||
Construction Products | 28 | 28 | 56 | ||||||
Specialty Products | 47 | 42 | 89 | ||||||
Corporate | 1 | 12 | 13 | ||||||
Total | 251 | 250 | 501 |
Market Price Per Share | Dividends Declared Per Share | ||||||||||
High | Low | ||||||||||
2016: | |||||||||||
Fourth quarter | $ | 127.99 | $ | 111.50 | $ | 0.65 | |||||
Third quarter | 123.50 | 103.08 | 0.65 | ||||||||
Second quarter | 109.54 | 98.32 | 0.55 | ||||||||
First quarter | 102.98 | 79.15 | 0.55 | ||||||||
2015: | |||||||||||
Fourth quarter | $ | 95.00 | $ | 80.16 | $ | 0.55 | |||||
Third quarter | 94.33 | 78.79 | 0.55 | ||||||||
Second quarter | 99.92 | 91.41 | 0.485 | ||||||||
First quarter | 100.14 | 90.43 | 0.485 |
3M Company | E.I. du Pont de Nemours and Company | Masco Corporation |
BorgWarner Inc. | Eaton Corporation plc | Parker-Hannifin Corporation |
Caterpillar Inc. | Emerson Electric Co. | PPG Industries, Inc. |
Cummins Inc. | Honeywell International Inc. | Pentair plc |
Deere & Company | Ingersoll-Rand plc | Stanley Black & Decker, Inc. |
Dover Corporation | Johnson Controls, Inc. | Textron Inc. |
In millions except per share amounts | |||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Value of Shares That May Yet Be Purchased Under Program | |||||||||
October 2016 | 2.8 | $ | 114.89 | 2.8 | $ | 3,622 | |||||||
November 2016 | 1.1 | $ | 120.25 | 1.1 | $ | 3,498 | |||||||
December 2016 | 0.4 | $ | 126.26 | 0.4 | $ | 3,446 | |||||||
Total | 4.3 | 4.3 |
In millions except per share amounts | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||
Operating revenue | $ | 13,599 | $ | 13,405 | $ | 14,484 | $ | 14,135 | $ | 14,791 | |||||||||
Income from continuing operations | 2,035 | 1,899 | 1,890 | 1,630 | 2,233 | ||||||||||||||
Income per share from continuing operations: | |||||||||||||||||||
Basic | 5.73 | 5.16 | 4.70 | 3.65 | 4.75 | ||||||||||||||
Diluted | 5.70 | 5.13 | 4.67 | 3.63 | 4.72 | ||||||||||||||
Total assets at year-end | 15,201 | 15,729 | 17,465 | 19,599 | 19,138 | ||||||||||||||
Long-term debt at year-end | 7,177 | 6,896 | 5,943 | 2,771 | 4,564 | ||||||||||||||
Cash dividends declared per common share | 2.40 | 2.07 | 1.81 | 1.60 | 1.48 |
• | ITW’s 80/20 management process is the operating system that is applied in every ITW business. Initially introduced as a manufacturing efficiency tool in the 1980’s, ITW has continually refined, improved and expanded 80/20 into a proprietary, holistic business management process that generates significant value for the Company and its customers. Through the application of data-driven insights generated by 80/20 practice, ITW focuses on its largest and best opportunities (the “80”) and eliminates cost, complexity and distractions associated with the less profitable opportunities (the “20”). 80/20 enables ITW businesses to consistently achieve world-class operational excellence in product availability, quality, and innovation, while generating superior financial performance; |
• | Customer-back innovation has fueled decades of profitable growth at ITW. The Company’s unique innovation approach is built on insight gathered from the 80/20 management process. Working from the customer back, ITW businesses position themselves as the go-to problem solver for their “80” customers. ITW’s innovation efforts are focused on understanding customer needs, particularly those in “80” markets with solid long-term growth fundamentals, and subsequently creating unique solutions to address those needs. These customer insights and learnings drive innovation at ITW and have contributed to a portfolio of more than 17,000 granted and pending patents; |
• | ITW’s decentralized, entrepreneurial culture allows ITW businesses to be fast, focused, and responsive. ITW businesses have significant flexibility within the framework of the ITW Business Model to customize their approach in order to best serve their specific customers' needs. ITW colleagues recognize their unique responsibilities to execute the Company's strategy and values. As a result, the Company maintains a focused and simple organizational structure that, combined with outstanding execution, delivers best-in-class services adapted to each business' customers and end markets. |
• | The first step was to narrow the focus and improve the quality of ITW’s business portfolio. As part of the Portfolio Management initiative, ITW exited businesses that were operating in commoditized market spaces and prioritized sustainable differentiation as a must-have requirement for all ITW businesses. This process included both divesting entire businesses and exiting commoditized product lines and customers inside otherwise highly differentiated ITW divisions. |
• | Step two, Business Structure Simplification, was implemented to simplify and scale-up ITW’s operating structure to support increased engineering, marketing, and sales resources, and, at the same time, improve global reach and competitiveness, all of which were critical to driving accelerated organic growth. ITW now has 85 scaled-up divisions with significantly enhanced focus on growth investments, core customers and products, and customer-back innovation. |
• | The Strategic Sourcing initiative was established as a core capability to better leverage ITW’s scale and improve global competitiveness. Sourcing is now a core strategic and operational capability at ITW. The Company’s 80/20-enabled sourcing organization has delivered an average of one percent reduction in spend each year from 2013 through 2016 and is on track to do the same in 2017 and 2018. |
• | With the portfolio realignment and scale-up work largely complete, the Company was able to shift its focus to preparing for and accelerating, organic growth. As a preparatory step, ITW is in the process of reapplying 80/20 to optimize its newly scaled-up divisions for growth, first, to build a foundation of operational excellence, and second, to identify the best opportunities to drive organic growth. |
• | The first lever, better leveraging the full power of the ITW Business Model, will be accomplished through a much more consistent and focused approach to 80/20 best practice implementation across the Company. The 80/20 |
• | The second lever, strategic sourcing, is a core element of ITW’s ongoing operational strategy and a sustainable enterprise-wide capability. Through the continued execution of this initiative, the Company expects to deliver additional margin improvement with the goal of a one percent reduction in spend in 2017 and 2018. |
• | Organic business - acquired businesses that have been included in the Company's results of operations for more than 12 months on a constant currency basis. |
• | Operating leverage - the estimated effect of the organic revenue volume changes on organic operating income, assuming variable margins remain the same as the prior period. |
• | Price/cost - represents the estimated net impact of increases or decreases in the cost of materials used in the Company's products versus changes in the selling price to the Company's customers. |
• | Product line simplification (PLS) - focuses businesses on eliminating the complexity and overhead costs associated with smaller product lines and customers, and focuses businesses on supporting and growing their largest customers and product lines; in the short-term, PLS may result in a decrease in revenue and overhead costs while improving operating margin. In the long-term, PLS is expected to result in growth in revenue, profitability, and returns. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 13,599 | $ | 13,405 | 1.4 | % | 1.2 | % | 1.7 | % | — | % | (1.5 | )% | 1.4 | % | |||||
Operating income | 3,064 | 2,867 | 6.9 | % | 8.1 | % | 0.6 | % | 0.1 | % | (1.9 | )% | 6.9 | % | |||||||
Operating margin % | 22.5 | % | 21.4 | % | 110 bps | 140 bps | (30) bps | 10 bps | (10) bps | 110 bps |
• | Operating revenue increased due to growth in organic and acquisition revenues, partially offset by the unfavorable effect of foreign currency translation. |
• | Organic revenue grew 1.2% as six of seven segments had worldwide organic revenue growth primarily due to penetration gains, higher end market demand and product innovation. Organic revenue declined in the Welding segment primarily due to lower capital spending in the industrial end markets and sluggish demand in the oil and gas end market. |
◦ | PLS activities associated with the portfolio management component of the Company's Enterprise Strategy reduced organic revenue growth by approximately one percentage point. |
◦ | North American organic revenue increased 0.7% and European organic revenue increased 2.3% as growth in six segments for both regions was partially offset by a decline in the Welding segment. |
◦ | Asia Pacific organic revenue increased 2.7% primarily due to growth in the Automotive OEM, Specialty Products, Construction Products, Food Equipment, and Test & Measurement and Electronics segments, partially offset by a decline in the Welding and Polymers & Fluids segments. |
• | Operating margin of 22.5% increased 110 basis points. The primary driver of the operating margin improvement was 130 basis points from the benefit of the Company's enterprise initiatives. Positive operating leverage of 30 basis points and favorable price/cost of 10 basis points were partially offset by the dilutive impact of 30 basis points from the EF&C acquisition and additional investment in the business. |
• | In 2016, the Company received a $167 million cash dividend distribution from Wilsonart which exceeded the Company’s equity investment balance and resulted in a $54 million pre-tax gain, partially offset by $30 million of pre-tax losses related to the disposals of businesses and the disposal of a partnership investment. Refer to Note 4. Other Income (Expense) in Item 8. Financial Statements and Supplementary Data for further information on the Wilsonart equity investment. |
• | Diluted earnings per share (EPS) of $5.70 increased 11.1%. |
• | Free cash flow was $2.0 billion in 2016. Refer to the Cash Flow section of Liquidity and Capital Resources for a reconciliation of this non-GAAP measure. |
• | The Company repurchased approximately 18.7 million shares of its common stock in 2016 for approximately $2.0 billion. |
• | Total cash dividends of $821 million were paid in 2016. |
• | Adjusted after-tax return on average invested capital was 22.1%, an increase of 170 basis points. Refer to the Adjusted After-Tax Return on Average Invested Capital section of Liquidity and Capital Resources for a reconciliation of this non-GAAP measure. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 13,405 | $ | 14,484 | (7.4 | )% | (0.4 | )% | (0.2 | )% | — | % | (6.8 | )% | (7.4 | )% | |||||
Operating income | $ | 2,867 | $ | 2,888 | (0.7 | )% | 5.8 | % | (0.3 | )% | 1.2 | % | (7.4 | )% | (0.7 | )% | |||||
Operating margin % | 21.4 | % | 19.9 | % | 150 bps | 130 bps | — | 20 bps | — | 150 bps |
• | Operating revenue decreased 7.4% primarily due to the unfavorable effect of foreign currency translation as the U.S. Dollar strengthened against most major currencies. |
• | Organic revenue decreased 0.4% in 2015 as compared to the prior year. |
◦ | Automotive OEM, Food Equipment and Construction Products had solid organic revenue growth primarily due to penetration gains, higher market demand and product innovation. Organic revenue declined in the Welding and Test & Measurement and Electronics segments primarily due to lower demand in the oil and gas end markets and a challenging capital spending environment. |
◦ | PLS activities reduced organic revenue growth by approximately one percentage point. |
◦ | North American organic revenue decreased 0.5% as a decline in the Welding and Test & Measurement and Electronics segments was partially offset by growth in the Automotive OEM, Food Equipment and Construction Products segments. |
◦ | European organic revenue increased 1.2%. Double-digit growth in the Automotive OEM segment was partially offset by a decline in the Polymers & Fluids, Test & Measurement and Electronics and Welding segments. |
◦ | Asia Pacific organic revenue decreased 1.4% primarily due to a decline in the Welding and Test & Measurement and Electronics segments, partially offset by growth in the Construction Products segment. |
• | Operating income of $2.9 billion decreased 0.7%. Excluding the negative impact from foreign currency translation of 7.4%, operating income would have increased 6.7%. |
• | Operating margin of 21.4% increased 150 basis points primarily due to the benefit of the Company's enterprise initiatives related to business structure simplification and strategic sourcing that contributed 110 basis points. Lower restructuring expenses and favorable price/cost each contributed 20 basis points of operating margin expansion. |
• | Diluted earnings per share (EPS) from continuing operations of $5.13 increased 9.9%. Excluding the negative impact from foreign currency of approximately $0.41 per diluted share, EPS would have increased 18.6%. |
• | Free cash flow was $2.0 billion in 2015. Refer to the Cash Flow section of Liquidity and Capital Resources for a reconciliation of this non-GAAP measure. |
• | The Company repurchased approximately 21.0 million shares of its common stock in 2015 for approximately $2.0 billion. |
• | Total cash dividends of $742 million were paid in 2015. |
• | Adjusted after-tax return on average invested capital was 20.4%, an increase of 140 basis points. Refer to the Adjusted After-Tax Return on Average Invested Capital section of Liquidity and Capital Resources for a reconciliation of this non-GAAP measure. |
Operating Revenue | |||||||||||
In millions | 2016 | 2015 | 2014 | ||||||||
Automotive OEM | $ | 2,864 | $ | 2,529 | $ | 2,590 | |||||
Food Equipment | 2,110 | 2,096 | 2,177 | ||||||||
Test & Measurement and Electronics | 1,974 | 1,969 | 2,204 | ||||||||
Welding | 1,486 | 1,650 | 1,850 | ||||||||
Polymers & Fluids | 1,691 | 1,712 | 1,927 | ||||||||
Construction Products | 1,609 | 1,587 | 1,707 | ||||||||
Specialty Products | 1,885 | 1,885 | 2,055 | ||||||||
Intersegment revenue | (20 | ) | (23 | ) | (26 | ) | |||||
Total | $ | 13,599 | $ | 13,405 | $ | 14,484 |
Operating Income | |||||||||||
In millions | 2016 | 2015 | 2014 | ||||||||
Automotive OEM | $ | 690 | $ | 613 | $ | 600 | |||||
Food Equipment | 537 | 498 | 453 | ||||||||
Test & Measurement and Electronics | 372 | 322 | 340 | ||||||||
Welding | 370 | 415 | 479 | ||||||||
Polymers & Fluids | 343 | 335 | 357 | ||||||||
Construction Products | 361 | 316 | 289 | ||||||||
Specialty Products | 482 | 439 | 440 | ||||||||
Total Segments | 3,155 | 2,938 | 2,958 | ||||||||
Unallocated | (91 | ) | (71 | ) | (70 | ) | |||||
Total | $ | 3,064 | $ | 2,867 | $ | 2,888 |
• | plastic and metal components, fasteners and assemblies for automobiles, light trucks and other industrial uses. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 2,864 | $ | 2,529 | 13.3 | % | 5.1 | % | 9.7 | % | — | % | (1.5 | )% | 13.3 | % | |||||
Operating income | $ | 690 | $ | 613 | 12.6 | % | 10.7 | % | 2.6 | % | 0.7 | % | (1.4 | )% | 12.6 | % | |||||
Operating margin % | 24.1 | % | 24.2 | % | (10) bps | 130 bps | (160) bps | 20 bps | — | (10) bps |
• | Operating revenue increased due to the EF&C acquisition and higher organic revenue, partially offset by the unfavorable effect of foreign currency translation. |
• | Organic revenue grew 5.1%. |
◦ | North American organic revenue grew 3.4% versus total North American auto build growth of 2%. Auto build growth for the Detroit 3, where the Company has higher content, declined 1%. |
◦ | European organic revenue growth of 6.0% exceeded European auto builds which grew 3%. |
◦ | Asia Pacific organic revenue increased 10.9% driven by product penetration gains in China due to new product launches in 2016. China organic revenue growth of 22.7% exceeded Chinese auto build growth of 14%. Auto builds of foreign automotive manufacturers in China, where the Company has higher content, grew 11%. |
• | On July 1, 2016, the Company completed the acquisition of the EF&C business from ZF TRW. EF&C had operating revenue of $245 million for the six months ended December 31, 2016, and increased Automotive OEM operating revenue by 9.7%. |
• | Operating margin of 24.1% decreased 10 basis points due to the dilutive impact of 160 basis points from the EF&C acquisition and unfavorable price/cost of 40 basis points, partially offset by positive operating leverage of 80 basis |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 2,529 | $ | 2,590 | (2.4 | )% | 5.8 | % | (0.2 | )% | — | % | (8.0 | )% | (2.4 | )% | |||||
Operating income | $ | 613 | $ | 600 | 2.1 | % | 10.4 | % | (0.1 | )% | (0.3 | )% | (7.9 | )% | 2.1 | % | |||||
Operating margin % | 24.2 | % | 23.2 | % | 100 bps | 100 bps | 10 bps | (10) bps | — | 100 bps |
• | Operating revenue decreased primarily due to the unfavorable effect of foreign currency translation, partially offset by organic revenue growth. |
• | Organic revenue grew 5.8% as a result of product innovation and penetration gains, exceeding worldwide auto build growth of 1%. |
◦ | European organic revenue growth of 11.1% exceeded auto builds which grew 4%. |
◦ | North American organic revenue growth of 4.2% exceeded auto build growth of 3%. |
◦ | Asia Pacific organic revenue increased 0.5%. China organic revenue grew 7.9%, as Chinese auto builds increased 4%. Auto builds of foreign automotive manufacturers in China, where the Company has higher content, were flat for 2015. |
• | Operating income of $613 million increased 2.1%. Excluding the negative impact of foreign currency translation of 7.9%, operating income would have increased 10.0%. |
• | Operating margin was 24.2%. The increase of 100 basis points was primarily driven by 80 basis points of operating leverage, the net benefits from the Company's enterprise initiatives and favorable price/cost of 10 basis points. |
• | 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. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 2,110 | $ | 2,096 | 0.7 | % | 2.8 | % | — | % | — | % | (2.1 | )% | 0.7 | % | |||||
Operating income | $ | 537 | $ | 498 | 7.8 | % | 8.7 | % | — | % | 1.1 | % | (2.0 | )% | 7.8 | % | |||||
Operating margin % | 25.4 | % | 23.7 | % | 170 bps | 140 bps | — | 30 bps | — | 170 bps |
• | Operating revenue increased due to organic revenue growth, partially offset by the unfavorable effect of foreign currency translation. |
• | Organic revenue increased 2.8% as equipment and service organic revenue grew 3.9% and 0.8%, respectively. |
◦ | North American organic revenue increased 4.3%. North American equipment revenue increased 6.6% primarily due to strong end market demand in the retail, refrigeration, warewash and cooking businesses. Service revenue in North America increased 0.8%. |
◦ | International organic revenue grew 0.8%. International equipment organic revenue increased 0.8% primarily due to growth in Europe and Asia. International service organic revenue grew 0.9%. |
• | Operating margin of 25.4% increased 170 basis points driven by positive operating leverage of 60 basis points, the net benefits of the Company's enterprise initiatives and cost management of 40 basis points, favorable price/cost of 40 basis points and lower restructuring expenses. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 2,096 | $ | 2,177 | (3.7 | )% | 3.4 | % | — | % | — | % | (7.1 | )% | (3.7 | )% | |||||
Operating income | $ | 498 | $ | 453 | 9.8 | % | 17.7 | % | — | % | (0.3 | )% | (7.6 | )% | 9.8 | % | |||||
Operating margin % | 23.7 | % | 20.8 | % | 290 bps | 290 bps | — | — | — | 290 bps |
• | Operating revenue decreased 3.7% due to the unfavorable effect of foreign currency translation, partially offset by organic revenue growth. |
• | Organic revenue increased 3.4% in 2015. |
◦ | North American organic revenue increased 5.6%. North American equipment revenue increased 6.6% primarily due to product innovation and improved market penetration in the warewash and refrigeration businesses. Service revenue in North America increased 4.1%. |
◦ | International organic revenue increased 1.0%. International equipment organic revenue increased 0.9% primarily due to growth in the refrigeration business, partially offset by difficult year-over-year comparisons in the cooking and retail businesses. International service organic revenue increased 1.3%. |
• | Operating margin was 23.7%. The 290 basis point improvement was primarily driven by the benefits of the Company's enterprise initiatives, partially offset by additional investment in the business that contributed 160 basis points, positive operating leverage of 80 basis points and favorable price/cost of 30 basis points. |
• | 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. |
For the Years Ended | |||||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acq/Div | Restructuring | Impairment | Foreign Currency | Total | |||||||||||||||
Operating revenue | $ | 1,974 | $ | 1,969 | 0.3 | % | 1.8 | % | — | % | — | % | — | % | (1.5 | )% | 0.3 | % | |||||
Operating income | $ | 372 | $ | 322 | 15.6 | % | 17.4 | % | — | % | 0.4 | % | — | % | (2.2 | )% | 15.6 | % | |||||
Operating margin % | 18.9 | % | 16.3 | % | 260 bps | 250 bps | — | 10 bps | — | — | 260 bps |
• | Operating revenue increased due to organic revenue growth, partially offset by the unfavorable effect of foreign currency translation. |
• | Organic revenue increased 1.8%. |
◦ | Electronics organic revenue increased 4.9%. Organic revenue grew 11.6% in the electronics assembly businesses primarily driven by higher demand from electronics equipment manufacturers and by the solar and semi-conductor end markets. Other electronics businesses grew 0.5% primarily due to strength in Europe, partially offset by PLS activities in Asia Pacific. |
◦ | Organic revenue for the test and measurement businesses decreased 0.9% primarily due to the impact of a weak capital spending environment in North America and Europe and continued softness in the oil and gas related end markets. |
• | Operating margin of 18.9% increased 260 basis points primarily driven by the net benefits resulting from the Company's enterprise initiatives and cost management of 170 basis points, positive operating leverage of 60 basis points and favorable price/cost of 20 basis points. |
For the Years Ended | |||||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acq/Div | Restructuring | Impairment | Foreign Currency | Total | |||||||||||||||
Operating revenue | $ | 1,969 | $ | 2,204 | (10.7 | )% | (5.2 | )% | — | % | — | % | — | % | (5.5 | )% | (10.7 | )% | |||||
Operating income | $ | 322 | $ | 340 | (5.1 | )% | (2.5 | )% | — | % | 3.1 | % | 0.5 | % | (6.2 | )% | (5.1 | )% | |||||
Operating margin % | 16.3 | % | 15.4 | % | 90 bps | 40 bps | — | 40 bps | 10 bps | — | 90 bps |
• | Operating revenue decreased 10.7% due to the unfavorable effect of foreign currency translation and the decrease in organic revenue. |
• | Organic revenue decreased 5.2% in 2015. |
◦ | Organic revenue for the test and measurement businesses decreased 5.9% primarily due to the impact of a weak capital spending environment in North America and Europe. |
◦ | Electronics organic revenue declined 4.3% primarily due to the decrease in the electronics assembly businesses across all major regions. Organic revenue for the other electronics businesses increased 0.3% primarily driven by the contamination and static control businesses. |
• | Operating income of $322 million decreased 5.1%. Excluding the negative impact of foreign currency translation of 6.2%, operating income would have increased 1.1%. |
• | Operating margin was 16.3%. The increase of 90 basis points was primarily driven by the net benefits resulting from the Company's enterprise initiatives and cost management of 190 basis points, lower restructuring expenses, and favorable price/cost of 20 basis points, partially offset by negative operating leverage of 170 basis points. |
• | arc welding equipment; |
• | metal arc welding consumables and related accessories; and |
• | metal jacketing and other insulation products. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Restructuring | Impairment | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,486 | $ | 1,650 | (10.0 | )% | (9.1 | )% | — | % | — | % | (0.9 | )% | (10.0 | )% | |||||
Operating income | $ | 370 | $ | 415 | (10.8 | )% | (8.0 | )% | (1.4 | )% | (0.7 | )% | (0.7 | )% | (10.8 | )% | |||||
Operating margin % | 24.9 | % | 25.2 | % | (30) bps | 20 bps | (30) bps | (20) bps | — | (30) bps |
• | Operating revenue decreased due to the decline in organic revenue and the unfavorable effect of foreign currency translation. |
• | Organic revenue decreased 9.1% due to lower demand in the oil and gas and industrial end markets and the impact of a soft capital spending environment. Organic revenue declined 10% and 8% for equipment and consumables, respectively. |
◦ | North American organic revenue declined 8.0% driven by decreases across the oil and gas end markets and industrial end markets primarily related to heavy equipment for agriculture, infrastructure and mining. |
◦ | International organic revenue decreased 12.9% primarily due to weak oil and gas end markets in Europe and Asia Pacific. |
• | Operating margin of 24.9% declined 30 basis points due to negative operating leverage of 190 basis points, higher restructuring expenses, the unfavorable impact of intangible asset impairment, partially offset by the net benefits of the Company's enterprise initiatives and cost management of 180 basis points and favorable price/cost of 30 basis points. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,650 | $ | 1,850 | (10.8 | )% | (7.6 | )% | (0.1 | )% | — | % | (3.1 | )% | (10.8 | )% | |||||
Operating income | $ | 415 | $ | 479 | (13.4 | )% | (12.1 | )% | — | % | 0.3 | % | (1.6 | )% | (13.4 | )% | |||||
Operating margin % | 25.2 | % | 25.9 | % | (70) bps | (130) bps | — | 10 bps | 50 bps | (70) bps |
• | Operating revenue decreased primarily due to the decrease in organic revenue and the unfavorable effect of foreign currency translation. |
• | Organic revenue decreased 7.6% due to lower demand in the oil and gas end markets, the impact of a soft capital spending environment and continued PLS activities. |
◦ | North American organic revenue declined 5.1% primarily due to decreases across the oil and gas and industrial end markets. |
◦ | International organic revenue decreased 14.5% primarily due to weak oil and gas end markets across all regions. |
• | Operating margin was 25.2%. The decline of 70 basis points was primarily due to negative operating leverage of 130 basis points and lower variable margins due to product mix from lower sales of higher margin equipment, partially offset by favorable price/cost of 50 basis points and the net benefits of the Company's enterprise initiatives. |
• | 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. |
For the Years Ended | |||||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acq/Div | Restructuring | Impairment | Foreign Currency | Total | |||||||||||||||
Operating revenue | $ | 1,691 | $ | 1,712 | (1.2 | )% | 1.3 | % | (0.2 | )% | — | % | — | % | (2.3 | )% | (1.2 | )% | |||||
Operating income | $ | 343 | $ | 335 | 2.5 | % | 4.9 | % | (0.3 | )% | (0.1 | )% | 0.7 | % | (2.7 | )% | 2.5 | % | |||||
Operating margin % | 20.3 | % | 19.6 | % | 70 bps | 70 bps | — | (10) bps | 20 bps | (10) bps | 70 bps |
• | Operating revenue decreased primarily due to the unfavorable effect of foreign currency translation, partially offset by organic revenue growth. |
• | Organic revenue increased 1.3% primarily due to stronger demand in the automotive aftermarket and polymers businesses. |
◦ | Organic revenue for the automotive aftermarket businesses increased 2.1% primarily driven by an increase in car care and tire repair in North America. Organic revenue for the polymers businesses increased 1.4% primarily driven by an increase in South America and a modest increase in the European wind energy business, partially offset by a decline in North America. Organic revenue for the fluids businesses was flat as growth in South America was offset by a decline in the industrial maintenance, repair, and operations end markets in North America. |
• | Operating margin of 20.3% increased 70 basis points primarily driven by the net benefits of the Company's enterprise initiatives and cost management of 60 basis points and favorable operating leverage of 30 basis points, partially offset by unfavorable price/cost of 20 basis points. |
For the Years Ended | |||||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acq/Div | Restructuring | Impairment | Foreign Currency | Total | |||||||||||||||
Operating revenue | $ | 1,712 | $ | 1,927 | (11.2 | )% | (2.0 | )% | (1.0 | )% | — | % | — | % | (8.2 | )% | (11.2 | )% | |||||
Operating income | $ | 335 | $ | 357 | (6.3 | )% | 1.8 | % | (2.3 | )% | 1.7 | % | (0.4 | )% | (7.1 | )% | (6.3 | )% | |||||
Operating margin % | 19.6 | % | 18.5 | % | 110 bps | 80 bps | (20) bps | 30 bps | (10) bps | 30 bps | 110 bps |
• | Operating revenue decreased primarily due to the unfavorable effect of foreign currency translation and the decrease in organic revenue. |
• | Organic revenue declined 2.0% primarily due to lower demand in Europe and North America. |
◦ | Organic revenue for the fluids businesses decreased 3.8% primarily driven by a decline in the industrial maintenance, repair and operations end markets in Europe and North America. Polymers businesses decreased 2.6% primarily due to the organic revenue decline in the European wind energy business, partially offset by growth in China and South America. Organic revenue for the automotive aftermarket businesses was essentially flat as a decline in North America was offset by growth in South America. |
• | Operating income of $335 million decreased 6.3%. Excluding the negative impact of foreign currency translation of 7.1%, operating income would have increased 0.8%. |
• | Operating margin was 19.6%. The 110 basis point improvement was primarily driven by the net benefits of the Company's enterprise initiatives and cost management of 150 basis points and lower restructuring expenses, partially offset by lower variable margins due to product mix and negative operating leverage of 40 basis points. |
• | 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. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,609 | $ | 1,587 | 1.4 | % | 3.0 | % | (0.2 | )% | — | % | (1.4 | )% | 1.4 | % | |||||
Operating income | $ | 361 | $ | 316 | 14.1 | % | 16.2 | % | (0.3 | )% | (0.3 | )% | (1.5 | )% | 14.1 | % | |||||
Operating margin % | 22.4 | % | 19.9 | % | 250 bps | 260 bps | — | (10) bps | — | 250 bps |
• | Operating revenue increased primarily due to organic revenue growth, partially offset by the unfavorable effect of foreign currency translation. |
• | Organic revenue increased 3.0%. |
◦ | North American organic revenue grew 3.3% driven by growth in residential/remodel and commercial end markets. |
◦ | International organic revenue increased 2.8%. Asia Pacific organic revenue increased 2.9% primarily due to growth in Australia and New Zealand. European organic revenue increased 2.8% primarily due to growth in the United Kingdom. |
• | Operating margin of 22.4% increased 250 basis points primarily driven by the net benefits of the Company's enterprise initiatives and cost management of 130 basis points, positive operating leverage of 80 basis points and favorable price/cost of 50 basis points. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,587 | $ | 1,707 | (7.0 | )% | 3.7 | % | (0.5 | )% | — | % | (10.2 | )% | (7.0 | )% | |||||
Operating income | $ | 316 | $ | 289 | 8.8 | % | 17.0 | % | (0.2 | )% | 3.8 | % | (11.8 | )% | 8.8 | % | |||||
Operating margin % | 19.9 | % | 17.0 | % | 290 bps | 220 bps | 10 bps | 60 bps | — | 290 bps |
• | Operating revenue decreased primarily due to the unfavorable effect of foreign currency translation, partially offset by organic revenue growth. |
• | Organic revenue increased 3.7%. |
◦ | North American organic revenue increased 7.1% primarily due to an increase in demand in the residential/remodel end markets. |
◦ | International organic revenue increased 1.8%. Asia Pacific organic revenue increased 4.0% primarily due to growth in Australia and New Zealand. European organic revenue decreased 0.3% primarily due to ongoing PLS activities. |
• | Operating income of $316 million increased 8.8%. Excluding the negative impact of foreign currency translation of 11.8%, operating income would have increased 20.6%. |
• | Operating margin improved 290 basis points to 19.9% primarily due to the net benefits of the Company's enterprise initiatives and cost management of 150 basis points, positive operating leverage of 100 basis points and lower restructuring expenses. |
• | 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. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2016 | 2015 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,885 | $ | 1,885 | — | % | 1.2 | % | (0.1 | )% | — | % | (1.1 | )% | — | % | |||||
Operating income | $ | 482 | $ | 439 | 9.7 | % | 11.2 | % | 0.1 | % | (0.1 | )% | (1.5 | )% | 9.7 | % | |||||
Operating margin % | 25.6 | % | 23.3 | % | 230 bps | 230 bps | 10 bps | (10) bps | — | 230 bps |
• | Operating revenue was flat as an increase in organic revenue was offset primarily by the unfavorable effect of foreign currency translation. |
• | Organic revenue increased 1.2% primarily driven by growth in the consumer packaging, ground support equipment and sports branding businesses. |
◦ | International organic revenue increased 2.3% driven by growth in the appliance, foils, and gluing system businesses in Asia Pacific. |
◦ | North American organic revenue increased 0.6% driven by growth in the consumer packaging and medical businesses, partially offset by a decline in the brand identification businesses. |
• | Operating margin of 25.6% increased 230 basis points primarily driven by the net benefits of the Company's enterprise initiatives and cost management of 220 basis points and positive operating leverage of 30 basis points, partially offset by unfavorable price/cost of 20 basis points. |
For the Years Ended | |||||||||||||||||||||
Dollars in millions | December 31, | Components of Increase (Decrease) | |||||||||||||||||||
2015 | 2014 | Inc (Dec) | Organic | Acquisition/Divestiture | Restructuring | Foreign Currency | Total | ||||||||||||||
Operating revenue | $ | 1,885 | $ | 2,055 | (8.3 | )% | (2.3 | )% | — | % | — | % | (6.0 | )% | (8.3 | )% | |||||
Operating income | $ | 439 | $ | 440 | (0.4 | )% | 4.2 | % | — | % | 1.8 | % | (6.4 | )% | (0.4 | )% | |||||
Operating margin % | 23.3 | % | 21.4 | % | 190 bps | 150 bps | — | 40 bps | — | 190 bps |
• | Operating revenue decreased due to the unfavorable effect of foreign currency translation and the decrease in organic revenue. |
• | Organic revenue declined 2.3%. |
◦ | Growth in the consumer packaging businesses, driven by strong food and beverage end market demand, and in the brand identification businesses, due to increased medical, credit card, and automotive end market demand, was more than offset by the impact of a challenging capital spending environment and ongoing PLS activities. |
◦ | North American organic revenue decreased 3.2% as growth in the consumer packaging and brand identification businesses was more than offset by a decline in the ground support equipment and the appliance businesses. International organic revenue decreased 0.9% primarily due to a decline in the ground support equipment businesses, partially offset by growth in the consumer packaging businesses. |
• | Operating income of $439 million decreased 0.4%. Excluding the negative impact of foreign currency translation of 6.4%, operating income would have increased 6.0%. |
• | Operating margin improved 190 basis points to 23.3% primarily due to the net benefits of the Company's enterprise initiatives and cost management of 150 basis points, favorable price/cost of 50 basis points and lower restructuring expenses, partially offset by negative operating leverage of 50 basis points. |
• | Interest expense was $237 million in 2016, an increase from $226 million in 2015, primarily due to debt issuances in 2016. Interest expense was lower in 2015 compared to 2014 ($250 million in 2014) due to debt issuances in 2014 and 2015 at lower rates compared to prior debt obligations. |
• | Other income (expense) was income of $81 million in 2016, $78 million in 2015 and $61 million in 2014. The income in 2016 included a $54 million pre-tax gain resulting from a $167 million dividend distribution from Wilsonart that exceeded the equity investment balance, partially offset by $30 million of pre-tax losses in 2016 related to the disposals of businesses and the disposal of a partnership investment. The increase in income in 2015 versus 2014 was primarily due to a $15 million gain on the sale of a business in the first quarter of 2015. |
• | The effective tax rate was 30.0% in 2016, 30.1% in 2015, and 30.0% in 2014. |
• | The impact of the Euro and other foreign currencies against the U.S. Dollar decreased operating revenue by approximately $210 million in 2016 versus 2015 and $995 million in 2015 versus 2014. Additionally, the impact of foreign currencies against the U.S. Dollar decreased income from continuing operations by approximately $41 million in 2016 versus 2015 and $153 million in 2015 versus 2014. |
• | internal investments to support organic growth and sustain core businesses; |
• | payment of an attractive dividend to shareholders; and |
• | external investments in selective strategic acquisitions that support the Company's organic growth focus and an active share repurchase program. |
In millions | 2016 | 2015 | 2014 | |||||||||
Net cash provided by operating activities | $ | 2,302 | $ | 2,299 | $ | 1,616 | ||||||
Additions to plant and equipment | (273 | ) | (284 | ) | (361 | ) | ||||||
Free cash flow | $ | 2,029 | $ | 2,015 | $ | 1,255 | ||||||
Cash dividends paid | $ | (821 | ) | $ | (742 | ) | $ | (711 | ) | |||
Repurchases of common stock | (2,000 | ) | (2,002 | ) | (4,346 | ) | ||||||
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates | (453 | ) | (6 | ) | (45 | ) | ||||||
Dividend distribution from equity investment in Wilsonart | 167 | — | — | |||||||||
Net proceeds from sale of discontinued operations | — | — | 3,191 | |||||||||
Net proceeds from (repayment of) debt | 465 | 151 | 1,339 | |||||||||
Other | 128 | 147 | 224 | |||||||||
Effect of exchange rate changes on cash and equivalents | (133 | ) | (463 | ) | (535 | ) | ||||||
Net increase (decrease) in cash and equivalents | $ | (618 | ) | $ | (900 | ) | $ | 372 |
Dollars in millions | 2016 | 2015 | 2014 | |||||||||
Operating income | $ | 3,064 | $ | 2,867 | $ | 2,888 | ||||||
Tax rate | 30.0 | % | 30.1 | % | 30.0 | % | ||||||
Income taxes | (919 | ) | (864 | ) | (866 | ) | ||||||
Operating income after taxes | $ | 2,145 | $ | 2,003 | $ | 2,022 | ||||||
Invested capital: | ||||||||||||
Trade receivables | $ | 2,357 | $ | 2,203 | $ | 2,293 | ||||||
Inventories | 1,076 | 1,086 | 1,180 | |||||||||
Net plant and equipment | 1,652 | 1,577 | 1,686 | |||||||||
Goodwill and intangible assets | 6,021 | 5,999 | 6,466 | |||||||||
Accounts payable and accrued expenses | (1,713 | ) | (1,585 | ) | (1,799 | ) | ||||||
Other, net | 223 | 280 | 427 | |||||||||
Total invested capital | $ | 9,616 | $ | 9,560 | $ | 10,253 | ||||||
Average invested capital | $ | 9,780 | $ | 9,943 | $ | 11,215 | ||||||
Adjustment for Wilsonart (formerly the Decorative Surfaces segment) | (91 | ) | (123 | ) | (154 | ) | ||||||
Adjustment for Industrial Packaging | — | — | (424 | ) | ||||||||
Adjusted average invested capital | $ | 9,689 | $ | 9,820 | $ | 10,637 | ||||||
Adjusted return on average invested capital | 22.1 | % | 20.4 | % | 19.0 | % |
Dollars in millions | 2016 | 2015 | Increase (Decrease) | |||||||||
Current Assets: | ||||||||||||
Cash and equivalents | $ | 2,472 | $ | 3,090 | $ | (618 | ) | |||||
Trade receivables | 2,357 | 2,203 | 154 | |||||||||
Inventories | 1,076 | 1,086 | (10 | ) | ||||||||
Other | 218 | 341 | (123 | ) | ||||||||
6,123 | 6,720 | (597 | ) | |||||||||
Current Liabilities: | ||||||||||||
Short-term debt | 652 | 526 | 126 | |||||||||
Accounts payable and accrued expenses | 1,713 | 1,585 | 128 | |||||||||
Other | 395 | 257 | 138 | |||||||||
2,760 | 2,368 | 392 | ||||||||||
Net Working Capital | $ | 3,363 | $ | 4,352 | $ | (989 | ) |
In millions | 2016 | 2015 | Increase (Decrease) | |||||||||
Short-term debt | $ | 652 | $ | 526 | $ | 126 | ||||||
Long-term debt | 7,177 | 6,896 | 281 | |||||||||
Total debt | $ | 7,829 | $ | 7,422 | $ | 407 |
Dollars in millions | 2016 | 2015 | 2014 | ||||||||
Total debt | $ | 7,829 | $ | 7,422 | $ | 7,419 | |||||
Income from continuing operations | $ | 2,035 | $ | 1,899 | $ | 1,890 | |||||
Add: | |||||||||||
Interest expense | 237 | 226 | 250 | ||||||||
Other income | (81 | ) | (78 | ) | (61 | ) | |||||
Income taxes | 873 | 820 | 809 | ||||||||
Depreciation | 246 | 244 | 262 | ||||||||
Amortization and impairment of intangible assets | 224 | 233 | 245 | ||||||||
EBITDA | $ | 3,534 | $ | 3,344 | $ | 3,395 | |||||
Total debt to EBITDA ratio | 2.2 | 2.2 | 2.2 |
In millions | 2016 | 2015 | ||||||
Beginning balance | $ | 5,228 | $ | 6,824 | ||||
Net income | 2,035 | 1,899 | ||||||
Cash dividends declared | (846 | ) | (756 | ) | ||||
Repurchases of common stock | (2,000 | ) | (2,002 | ) | ||||
Currency translation adjustments | (277 | ) | (860 | ) | ||||
Other | 119 | 123 | ||||||
Ending balance | $ | 4,259 | $ | 5,228 |
In millions | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 and Future Years | ||||||||||||||||||
Principal payments on notes | $ | 650 | $ | — | $ | 1,350 | $ | 4 | $ | 350 | $ | 5,554 | ||||||||||||
Interest payments on notes | 240 | 237 | 209 | 180 | 180 | 2,053 | ||||||||||||||||||
Minimum lease payments | 104 | 75 | 53 | 37 | 26 | 43 | ||||||||||||||||||
$ | 994 | $ | 312 | $ | 1,612 | $ | 221 | $ | 556 | $ | 7,650 |
Usage Classification | Criteria | Reserve % | |||
Active | Quantity on hand is less than prior 6 months of usage | 0 | % | ||
Slow-moving | Some usage in last 12 months, but quantity on hand exceeds prior 6 months of usage | 50 | % | ||
Obsolete | No usage in the last 12 months | 90 | % |
Buildings and improvements | 150% declining balance |
Machinery and equipment | 200% declining balance |
0.90% Notes Due | 1.95% Notes Due | 6.25% Notes Due | 4.88% Notes Due thru | 3.375% Notes Due | 1.75% Euro Notes Due | 1.25% Euro Notes Due | 3.50% Notes Due | 2.65% Notes Due | 2.125% Euro Notes Due | 3.00% Euro Notes Due | 4.875% Notes Due | 3.9% Notes Due | |||||||||||||||||||||||||||||||||||||||
In millions | Feb 25, 2017 | Mar 1, 2019 | Apr 1, 2019 | Dec 31, 2020 | Sep 15, 2021 | May 20, 2022 | May 22, 2023 | Mar 1, 2024 | Nov 15, 2026 | May 22, 2030 | May 19, 2034 | Sep 15, 2041 | Sep 1, 2042 | ||||||||||||||||||||||||||||||||||||||
As of December 31, 2016: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated cash outflow by year of principal maturity | |||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | $ | 650 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
2018 | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2019 | — | 650 | 700 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2020 | — | — | — | 4 | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2021 | — | — | — | — | 350 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
2022 and thereafter | — | — | — | — | 526 | 526 | 700 | 1,000 | 526 | 526 | 650 | 1,100 | |||||||||||||||||||||||||||||||||||||||
Estimated fair value | 650 | 656 | 768 | 4 | 365 | 565 | 549 | 728 | 959 | 565 | 618 | 734 | 1,114 | ||||||||||||||||||||||||||||||||||||||
Carrying value | 650 | 648 | 698 | 4 | 348 | 520 | 520 | 695 | 991 | 519 | 512 | 636 | 1,080 | ||||||||||||||||||||||||||||||||||||||
As of December 31, 2015: | |||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated total cash outflow | $ | 650 | $ | 650 | $ | 700 | $ | 4 | $ | 350 | $ | 543 | $ | 543 | $ | 700 | $ | — | $ | 543 | $ | 543 | $ | 650 | $ | 1,100 | |||||||||||||||||||||||||
Estimated fair value | 649 | 655 | 790 | 4 | 362 | 564 | 538 | 727 | — | 530 | 569 | 708 | 1,051 | ||||||||||||||||||||||||||||||||||||||
Carrying value | 649 | 647 | 698 | 4 | 347 | 536 | 536 | 695 | — | 536 | 528 | 635 | 1,080 |
/s/ E. Scott Santi E. Scott Santi Chairman & Chief Executive Officer February 10, 2017 | /s/ Michael M. Larsen Michael M. Larsen Senior Vice President & Chief Financial Officer February 10, 2017 |
For the Years Ended December 31 | |||||||||||
In millions except per share amounts | 2016 | 2015 | 2014 | ||||||||
Operating Revenue | $ | 13,599 | $ | 13,405 | $ | 14,484 | |||||
Cost of revenue | 7,896 | 7,888 | 8,673 | ||||||||
Selling, administrative, and research and development expenses | 2,415 | 2,417 | 2,678 | ||||||||
Amortization and impairment of intangible assets | 224 | 233 | 245 | ||||||||
Operating Income | 3,064 | 2,867 | 2,888 | ||||||||
Interest expense | (237 | ) | (226 | ) | (250 | ) | |||||
Other income (expense) | 81 | 78 | 61 | ||||||||
Income from Continuing Operations Before Income Taxes | 2,908 | 2,719 | 2,699 | ||||||||
Income taxes | 873 | 820 | 809 | ||||||||
Income from Continuing Operations | 2,035 | 1,899 | 1,890 | ||||||||
Income from Discontinued Operations | — | — | 1,056 | ||||||||
Net Income | $ | 2,035 | $ | 1,899 | $ | 2,946 | |||||
Income Per Share from Continuing Operations: | |||||||||||
Basic | $ | 5.73 | $ | 5.16 | $ | 4.70 | |||||
Diluted | $ | 5.70 | $ | 5.13 | $ | 4.67 | |||||
Income Per Share from Discontinued Operations: | |||||||||||
Basic | $ | — | $ | — | $ | 2.63 | |||||
Diluted | $ | — | $ | — | $ | 2.61 | |||||
Net Income Per Share: | |||||||||||
Basic | $ | 5.73 | $ | 5.16 | $ | 7.33 | |||||
Diluted | $ | 5.70 | $ | 5.13 | $ | 7.28 |
For the Years Ended December 31 | |||||||||||
In millions | 2016 | 2015 | 2014 | ||||||||
Net Income | $ | 2,035 | $ | 1,899 | $ | 2,946 | |||||
Other Comprehensive Income (Loss): | |||||||||||
Foreign currency translation adjustments, net of tax | (277 | ) | (860 | ) | (939 | ) | |||||
Pension and other postretirement benefit adjustments, net of tax | (26 | ) | 14 | (103 | ) | ||||||
Comprehensive Income | $ | 1,732 | $ | 1,053 | $ | 1,904 |
December 31 | |||||||
In millions except per share amounts | 2016 | 2015 | |||||
Assets | |||||||
Current Assets: | |||||||
Cash and equivalents | $ | 2,472 | $ | 3,090 | |||
Trade receivables | 2,357 | 2,203 | |||||
Inventories | 1,076 | 1,086 | |||||
Prepaid expenses and other current assets | 218 | 341 | |||||
Total current assets | 6,123 | 6,720 | |||||
Net plant and equipment | 1,652 | 1,577 | |||||
Goodwill | 4,558 | 4,439 | |||||
Intangible assets | 1,463 | 1,560 | |||||
Deferred income taxes | 449 | 346 | |||||
Other assets | 956 | 1,087 | |||||
$ | 15,201 | $ | 15,729 | ||||
Liabilities and Stockholders’ Equity | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 652 | $ | 526 | |||
Accounts payable | 511 | 449 | |||||
Accrued expenses | 1,202 | 1,136 | |||||
Cash dividends payable | 226 | 200 | |||||
Income taxes payable | 169 | 57 | |||||
Total current liabilities | 2,760 | 2,368 | |||||
Noncurrent Liabilities: | |||||||
Long-term debt | 7,177 | 6,896 | |||||
Deferred income taxes | 134 | 256 | |||||
Other liabilities | 871 | 981 | |||||
Total noncurrent liabilities | 8,182 | 8,133 | |||||
Stockholders’ Equity: | |||||||
Common stock (par value of $0.01 per share): | |||||||
Issued- 550.0 shares in 2016 and 2015 Outstanding- 346.9 shares in 2016 and 363.7 shares in 2015 | 6 | 6 | |||||
Additional paid-in-capital | 1,188 | 1,135 | |||||
Retained earnings | 19,505 | 18,316 | |||||
Common stock held in treasury | (14,638 | ) | (12,729 | ) | |||
Accumulated other comprehensive income (loss) | (1,807 | ) | (1,504 | ) | |||
Noncontrolling interest | 5 | 4 | |||||
Total stockholders’ equity | 4,259 | 5,228 | |||||
$ | 15,201 | $ | 15,729 |
In millions except per share amounts | Common Stock | Additional Paid-in Capital | Retained Earnings | Common Stock Held in Treasury | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | ||||||||||||||
Balance at December 31, 2013 | $ | 6 | $ | 1,046 | $ | 14,943 | $ | (6,676 | ) | $ | 384 | $ | 6 | $ | 9,709 | ||||||
Net income | — | — | 2,946 | — | — | — | 2,946 | ||||||||||||||
Common stock issued for share-based awards | — | (26 | ) | — | 160 | — | — | 134 | |||||||||||||
Stock-based compensation expense | — | 39 | — | — | — | — | 39 | ||||||||||||||
Tax benefits related to stock options | — | 33 | — | — | — | — | 33 | ||||||||||||||
Tax benefits related to defined contribution plans | — | 4 | — | 1 | — | — | 5 | ||||||||||||||
Repurchases of common stock | — | — | — | (4,283 | ) | — | — | (4,283 | ) | ||||||||||||
Dividends declared ($1.81 per share) | — | — | (716 | ) | — | — | — | (716 | ) | ||||||||||||
Pension and other postretirement benefit adjustments | — | — | — | — | (103 | ) | — | (103 | ) | ||||||||||||
Currency translation adjustment | — | — | — | — | (939 | ) | — | (939 | ) | ||||||||||||
Noncontrolling interest | — | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||
Balance at December 31, 2014 | 6 | 1,096 | 17,173 | (10,798 | ) | (658 | ) | 5 | 6,824 | ||||||||||||
Net income | — | — | 1,899 | — | — | — | 1,899 | ||||||||||||||
Common stock issued for share-based awards | — | (21 | ) | — | 69 | — | — | 48 | |||||||||||||
Stock-based compensation expense | — | 39 | — | 2 | — | — | 41 | ||||||||||||||
Tax benefits related to stock options | — | 20 | — | — | — | — | 20 | ||||||||||||||
Tax benefits related to defined contribution plans | — | 3 | — | — | — | — | 3 | ||||||||||||||
Repurchases of common stock | — | — | — | (2,002 | ) | — | — | (2,002 | ) | ||||||||||||
Dividends declared ($2.07 per share) | — | — | (756 | ) | — | — | — | (756 | ) | ||||||||||||
Pension and other postretirement benefit adjustments | — | — | — | — | 14 | — | 14 | ||||||||||||||
Currency translation adjustment | — | — | — | — | (860 | ) | — | (860 | ) | ||||||||||||
Noncontrolling interest | — | (2 | ) | — | — | — | (1 | ) | (3 | ) | |||||||||||
Balance at December 31, 2015 | 6 | 1,135 | 18,316 | (12,729 | ) | (1,504 | ) | 4 | 5,228 | ||||||||||||
Net income | — | — | 2,035 | — | — | — | 2,035 | ||||||||||||||
Common stock issued for share-based awards | — | (18 | ) | — | 91 | — | — | 73 | |||||||||||||
Stock-based compensation expense | — | 39 | — | — | — | — | 39 | ||||||||||||||
Tax benefits related to stock options | — | 29 | — | — | — | — | 29 | ||||||||||||||
Tax benefits related to defined contribution plans | — | 3 | — | — | — | — | 3 | ||||||||||||||
Repurchases of common stock | — | — | — | (2,000 | ) | — | — | (2,000 | ) | ||||||||||||
Dividends declared ($2.40 per share) | — | — | (846 | ) | — | — | — | (846 | ) | ||||||||||||
Pension and other postretirement benefit adjustments | — | — | — | — | (26 | ) | — | (26 | ) | ||||||||||||
Currency translation adjustment | — | — | — | — | (277 | ) | — | (277 | ) | ||||||||||||
Noncontrolling interest | — | — | — | — | — | 1 | 1 | ||||||||||||||
Balance at December 31, 2016 | $ | 6 | $ | 1,188 | $ | 19,505 | $ | (14,638 | ) | $ | (1,807 | ) | $ | 5 | $ | 4,259 |
For the Years Ended December 31 | |||||||||||
In millions | 2016 | 2015 | 2014 | ||||||||
Cash Provided by (Used for) Operating Activities: | |||||||||||
Net income | $ | 2,035 | $ | 1,899 | $ | 2,946 | |||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Depreciation | 246 | 244 | 262 | ||||||||
Amortization and impairment of intangible assets | 224 | 233 | 245 | ||||||||
Change in deferred income taxes | (263 | ) | (11 | ) | 55 | ||||||
Provision for uncollectible accounts | 7 | 7 | 7 | ||||||||
(Income) loss from investments | 13 | (4 | ) | (8 | ) | ||||||
(Gain) loss on sale of plant and equipment | 1 | 1 | 2 | ||||||||
(Gain) loss on discontinued operations | — | — | (1,718 | ) | |||||||
(Gain) loss on sale of operations and affiliates | 12 | (16 | ) | 6 | |||||||
Stock-based compensation expense | 39 | 41 | 39 | ||||||||
Gain on dividend distribution from equity investment in Wilsonart | (54 | ) | — | — | |||||||
Other non-cash items, net | 5 | 12 | 11 | ||||||||
Change in assets and liabilities, net of acquisitions and divestitures: | |||||||||||
(Increase) decrease in— | |||||||||||
Trade receivables | (132 | ) | (42 | ) | (70 | ) | |||||
Inventories | 9 | 25 | (10 | ) | |||||||
Prepaid expenses and other assets | (63 | ) | 24 | (98 | ) | ||||||
Increase (decrease) in— | |||||||||||
Accounts payable | (3 | ) | (30 | ) | (20 | ) | |||||
Accrued expenses and other liabilities | 40 | (56 | ) | 5 | |||||||
Income taxes | 187 | (27 | ) | 33 | |||||||
Other, net | (1 | ) | (1 | ) | (71 | ) | |||||
Net cash provided by operating activities | 2,302 | 2,299 | 1,616 | ||||||||
Cash Provided by (Used for) Investing Activities: | |||||||||||
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates | (453 | ) | (6 | ) | (45 | ) | |||||
Additions to plant and equipment | (273 | ) | (284 | ) | (361 | ) | |||||
Proceeds from investments | 21 | 22 | 28 | ||||||||
Dividend distribution from equity investment in Wilsonart | 167 | — | — | ||||||||
Proceeds from sale of plant and equipment | 16 | 30 | 28 | ||||||||
Net proceeds from sale of discontinued operations | — | — | 3,191 | ||||||||
Proceeds from sale of operations and affiliates | 3 | 29 | 18 | ||||||||
Other, net | (13 | ) | (1 | ) | (17 | ) | |||||
Net cash provided by (used for) investing activities | (532 | ) | (210 | ) | 2,842 | ||||||
Cash Provided by (Used for) Financing Activities: | |||||||||||
Cash dividends paid | (821 | ) | (742 | ) | (711 | ) | |||||
Issuance of common stock | 84 | 59 | 148 | ||||||||
Repurchases of common stock | (2,000 | ) | (2,002 | ) | (4,346 | ) | |||||
Net proceeds from (repayments of) debt with original maturities of three months or less | (526 | ) | (946 | ) | (239 | ) | |||||
Proceeds from debt with original maturities of more than three months | 992 | 1,099 | 3,329 | ||||||||
Repayments of debt with original maturities of more than three months | (1 | ) | (2 | ) | (1,751 | ) | |||||
Excess tax benefits from stock-based compensation | 29 | 20 | 33 | ||||||||
Other, net | (12 | ) | (12 | ) | (14 | ) | |||||
Net cash provided by (used for) financing activities | (2,255 | ) | (2,526 | ) | (3,551 | ) | |||||
Effect of Exchange Rate Changes on Cash and Equivalents | (133 | ) | (463 | ) | (535 | ) | |||||
Cash and Equivalents: | |||||||||||
Increase (decrease) during the year | (618 | ) | (900 | ) | 372 | ||||||
Beginning of year | 3,090 | 3,990 | 3,618 | ||||||||
End of year | $ | 2,472 | $ | 3,090 | $ | 3,990 | |||||
Supplementary Cash Flow Information: | |||||||||||
Cash Paid During the Year for Interest | $ | 212 | $ | 200 | $ | 236 | |||||
Cash Paid During the Year for Income Taxes, Net of Refunds | $ | 920 | $ | 775 | $ | 1,502 | |||||
Liabilities Assumed from Acquisitions | $ | 150 | $ | 1 | $ | 4 |
In millions | 2016 | 2015 | 2014 | |||||||||
Beginning balance | $ | 42 | $ | 43 | $ | 46 | ||||||
Provision charged to expense | 7 | 7 | 7 | |||||||||
Write-offs, net of recoveries | (6 | ) | (5 | ) | (7 | ) | ||||||
Acquisitions and divestitures | 1 | — | — | |||||||||
Foreign currency translation | (1 | ) | (3 | ) | (3 | ) | ||||||
Ending balance | $ | 43 | $ | 42 | $ | 43 |
In millions | 2016 | 2015 | ||||||
Raw material | $ | 407 | $ | 415 | ||||
Work-in-process | 126 | 130 | ||||||
Finished goods | 629 | 622 | ||||||
LIFO reserve | (86 | ) | (81 | ) | ||||
Total inventories | $ | 1,076 | $ | 1,086 |
In millions | 2016 | 2015 | ||||||
Land | $ | 186 | $ | 179 | ||||
Buildings and improvements | 1,297 | 1,272 | ||||||
Machinery and equipment | 3,036 | 2,972 | ||||||
Equipment leased to others | 160 | 156 | ||||||
Construction in progress | 104 | 76 | ||||||
Gross plant and equipment | 4,783 | 4,655 | ||||||
Accumulated depreciation | (3,131 | ) | (3,078 | ) | ||||
Net plant and equipment | $ | 1,652 | $ | 1,577 |
Buildings and improvements | 5—50 years |
Machinery and equipment | 3—12 years |
Equipment leased to others | Term of lease |
In millions | 2016 | 2015 | 2014 | |||||||||
Beginning balance | $ | 46 | $ | 49 | $ | 50 | ||||||
Charges | (41 | ) | (37 | ) | (41 | ) | ||||||
Provision charged to expense | 42 | 36 | 43 | |||||||||
Acquisitions and divestitures | 1 | — | — | |||||||||
Foreign currency translation | (3 | ) | (2 | ) | (3 | ) | ||||||
Ending balance | $ | 45 | $ | 46 | $ | 49 |
In millions | 2014 | |||
Operating revenue | $ | 798 | ||
Income before income taxes | $ | 1,805 | ||
Income tax expense | (749 | ) | ||
Income from discontinued operations | $ | 1,056 |
In millions | 2016 | 2015 | 2014 | |||||||||
Interest income | $ | 38 | $ | 52 | $ | 65 | ||||||
Gain (loss) on disposal of operations and affiliates | (12 | ) | 16 | (6 | ) | |||||||
Gain (loss) on foreign currency transactions, net | 9 | 5 | 8 | |||||||||
Income (loss) from investments | (13 | ) | 4 | 8 | ||||||||
Equity income (loss) in Wilsonart | 61 | (4 | ) | (9 | ) | |||||||
Other, net | (2 | ) | 5 | (5 | ) | |||||||
Total other income (expense) | $ | 81 | $ | 78 | $ | 61 |
In millions | 2016 | 2015 | 2014 | |||||||||
U.S. federal income taxes: | ||||||||||||
Current | $ | 756 | $ | 503 | $ | 413 | ||||||
Deferred | (224 | ) | 8 | 121 | ||||||||
Total U.S. federal income taxes | 532 | 511 | 534 | |||||||||
Foreign income taxes: | ||||||||||||
Current | 290 | 310 | 163 | |||||||||
Deferred | (5 | ) | (11 | ) | 66 | |||||||
Benefit of net operating loss carryforwards | — | (48 | ) | (13 | ) | |||||||
Total foreign income taxes | 285 | 251 | 216 | |||||||||
State income taxes: | ||||||||||||
Current | 90 | 66 | 50 | |||||||||
Deferred | (34 | ) | (8 | ) | 9 | |||||||
Total state income taxes | 56 | 58 | 59 | |||||||||
Total provision for income taxes | $ | 873 | $ | 820 | $ | 809 |
In millions | 2016 | 2015 | 2014 | |||||||||
Domestic | $ | 1,653 | $ | 1,660 | $ | 1,669 | ||||||
Foreign | 1,255 | 1,059 | 1,030 | |||||||||
Total income from continuing operations before income taxes | $ | 2,908 | $ | 2,719 | $ | 2,699 |
2016 | 2015 | 2014 | |||||||
U.S. federal statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
State income taxes, net of U.S. federal tax benefit | 1.3 | 1.4 | 1.6 | ||||||
Differences between U.S. federal statutory and foreign tax rates | (3.6 | ) | (3.1 | ) | (3.5 | ) | |||
Nontaxable foreign interest income | (2.1 | ) | (3.3 | ) | (3.6 | ) | |||
Tax effect of foreign dividends | 1.5 | 2.8 | 2.1 | ||||||
Tax relief for U.S. manufacturers | (1.4 | ) | (1.6 | ) | (1.5 | ) | |||
Other, net | (0.7 | ) | (1.1 | ) | (0.1 | ) | |||
Effective tax rate | 30.0 | % | 30.1 | % | 30.0 | % |
2016 | 2015 | |||||||||||||||
In millions | Asset | Liability | Asset | Liability | ||||||||||||
Goodwill and intangible assets | $ | 240 | $ | (716 | ) | $ | 282 | $ | (734 | ) | ||||||
Inventory reserves, capitalized tax cost and LIFO inventory | 40 | (5 | ) | 42 | (5 | ) | ||||||||||
Investments | 23 | (206 | ) | 25 | (298 | ) | ||||||||||
Plant and equipment | 23 | (79 | ) | 28 | (84 | ) | ||||||||||
Accrued expenses and reserves | 76 | — | 79 | — | ||||||||||||
Employee benefit accruals | 306 | — | 314 | — | ||||||||||||
Foreign tax credit carryforwards | 6 | — | 216 | — | ||||||||||||
Net operating loss carryforwards | 610 | — | 643 | — | ||||||||||||
Capital loss carryforwards | 42 | — | 39 | — | ||||||||||||
Allowances for uncollectible accounts | 13 | — | 13 | — | ||||||||||||
Pension liabilities | 25 | — | 13 | — | ||||||||||||
Deferred intercompany deductions | 430 | — | — | — | ||||||||||||
Unrealized loss (gain) on foreign debt instruments | — | (140 | ) | — | (115 | ) | ||||||||||
Other | 97 | (16 | ) | 109 | (10 | ) | ||||||||||
Gross deferred income tax assets (liabilities) | 1,931 | (1,162 | ) | 1,803 | (1,246 | ) | ||||||||||
Valuation allowances | (454 | ) | — | (467 | ) | — | ||||||||||
Total deferred income tax assets (liabilities) | $ | 1,477 | $ | (1,162 | ) | $ | 1,336 | $ | (1,246 | ) |
Gross Carryforwards Related | |||
In millions | to Net Operating Losses | ||
2017 | $ | 9 | |
2018 | 7 | ||
2019 | 8 | ||
2020 | 75 | ||
2021 | 80 | ||
2022 | 21 | ||
2023 | 18 | ||
2024-2036 | 31 | ||
Do not expire | 1,956 | ||
Total gross carryforwards related to net operating losses | $ | 2,205 |
In millions | 2016 | 2015 | 2014 | |||||||||
Beginning balance | $ | 259 | $ | 218 | $ | 268 | ||||||
Additions based on tax positions related to the current year | 19 | 39 | 23 | |||||||||
Additions for tax positions of prior years | 126 | 54 | 12 | |||||||||
Reductions for tax positions of prior years | (97 | ) | (41 | ) | (59 | ) | ||||||
Settlements | (96 | ) | (6 | ) | (18 | ) | ||||||
Foreign currency translation | (1 | ) | (5 | ) | (8 | ) | ||||||
Ending balance | $ | 210 | $ | 259 | $ | 218 |
Jurisdiction | Open Tax Years | |
United States – Federal | 2012-2016 | |
United Kingdom | 2013-2016 | |
Germany | 2009-2016 | |
France | 2013-2016 | |
Australia | 2012-2016 |
In millions except per share amounts | 2016 | 2015 | 2014 | |||||||||
Income from continuing operations | $ | 2,035 | $ | 1,899 | $ | 1,890 | ||||||
Income per share from continuing operations—Basic: | ||||||||||||
Weighted-average common shares | 355.0 | 367.9 | 401.7 | |||||||||
Income per share from continuing operations—Basic | $ | 5.73 | $ | 5.16 | $ | 4.70 | ||||||
Income per share from continuing operations—Diluted: | ||||||||||||
Weighted-average common shares | 355.0 | 367.9 | 401.7 | |||||||||
Effect of dilutive stock options and restricted stock units | 2.1 | 2.2 | 2.9 | |||||||||
Weighted-average common shares assuming dilution | 357.1 | 370.1 | 404.6 | |||||||||
Income per share from continuing operations—Diluted | $ | 5.70 | $ | 5.13 | $ | 4.67 |
In millions | Automotive OEM | Test & Measurement and Electronics | Food Equipment | Polymers & Fluids | Welding | Construction Products | Specialty Products | Total | |||||||||||||||||||||||
Balance, December 31, 2014 | $ | 294 | $ | 1,390 | $ | 276 | $ | 964 | $ | 277 | $ | 542 | $ | 924 | $ | 4,667 | |||||||||||||||
2015 activity: | |||||||||||||||||||||||||||||||
Acquisitions & divestitures | — | — | — | (6 | ) | 1 | — | — | (5 | ) | |||||||||||||||||||||
Impairment charges | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation | (17 | ) | (35 | ) | (17 | ) | (64 | ) | (17 | ) | (26 | ) | (47 | ) | (223 | ) | |||||||||||||||
Balance, December 31, 2015 | 277 | 1,355 | 259 | 894 | 261 | 516 | 877 | 4,439 | |||||||||||||||||||||||
2016 activity: | |||||||||||||||||||||||||||||||
Acquisitions & divestitures | 187 | 1 | — | (2 | ) | — | (1 | ) | 1 | 186 | |||||||||||||||||||||
Impairment charges | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation | (8 | ) | (20 | ) | (10 | ) | (3 | ) | (1 | ) | (7 | ) | (18 | ) | (67 | ) | |||||||||||||||
Balance, December 31, 2016 | $ | 456 | $ | 1,336 | $ | 249 | $ | 889 | $ | 260 | $ | 508 | $ | 860 | $ | 4,558 | |||||||||||||||
Cumulative goodwill impairment charges, December 31, 2016 | $ | 24 | $ | 83 | $ | 60 | $ | 15 | $ | 5 | $ | 7 | $ | 46 | $ | 240 |
2016 | 2015 | |||||||||||||||||||||||
In millions | Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | ||||||||||||||||||
Amortizable intangible assets: | ||||||||||||||||||||||||
Customer lists and relationships | $ | 1,744 | $ | (1,060 | ) | $ | 684 | $ | 1,630 | $ | (943 | ) | $ | 687 | ||||||||||
Trademarks and brands | 733 | (344 | ) | 389 | 724 | (298 | ) | 426 | ||||||||||||||||
Patents and proprietary technology | 620 | (432 | ) | 188 | 618 | (397 | ) | 221 | ||||||||||||||||
Other | 461 | (444 | ) | 17 | 475 | (446 | ) | 29 | ||||||||||||||||
Total amortizable intangible assets | 3,558 | (2,280 | ) | 1,278 | 3,447 | (2,084 | ) | 1,363 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
Trademarks and brands | 185 | — | 185 | 197 | — | 197 | ||||||||||||||||||
Total intangible assets | $ | 3,743 | $ | (2,280 | ) | $ | 1,463 | $ | 3,644 | $ | (2,084 | ) | $ | 1,560 |
In millions | |||
2017 | $ | 203 | |
2018 | 184 | ||
2019 | 162 | ||
2020 | 141 | ||
2021 | 123 |
In millions | 2016 | 2015 | ||||||
Commercial paper | $ | — | $ | 498 | ||||
Bank overdrafts | — | 25 | ||||||
Current maturities of long-term debt | 650 | 1 | ||||||
Other borrowings | 2 | 2 | ||||||
Total short-term debt | $ | 652 | $ | 526 |
2016 | 2015 | |||||||||||||||||
In millions | Effective Interest Rate | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
0.90% notes due February 25, 2017 | 0.95% | $ | 650 | $ | 650 | $ | 649 | $ | 649 | |||||||||
1.95% notes due March 1, 2019 | 1.98% | 648 | 656 | 647 | 655 | |||||||||||||
6.25% notes due April 1, 2019 | 6.25% | 698 | 768 | 698 | 790 | |||||||||||||
4.88% notes due thru December 31, 2020 | 4.96% | 4 | 4 | 4 | 4 | |||||||||||||
3.375% notes due September 15, 2021 | 3.43% | 348 | 365 | 347 | 362 | |||||||||||||
1.75% Euro notes due May 20, 2022 | 1.86% | 520 | 565 | 536 | 564 | |||||||||||||
1.25% Euro notes due May 22, 2023 | 1.35% | 520 | 549 | 536 | 538 | |||||||||||||
3.50% notes due March 1, 2024 | 3.54% | 695 | 728 | 695 | 727 | |||||||||||||
2.65% notes due November 15, 2026 | 2.69% | 991 | 959 | — | — | |||||||||||||
2.125% Euro notes due May 22, 2030 | 2.18% | 519 | 565 | 536 | 530 | |||||||||||||
3.0% Euro notes due May 19, 2034 | 3.13% | 512 | 618 | 528 | 569 | |||||||||||||
4.875% notes due September 15, 2041 | 4.97% | 636 | 734 | 635 | 708 | |||||||||||||
3.9% notes due September 1, 2042 | 3.96% | 1,080 | 1,114 | 1,080 | 1,051 | |||||||||||||
Other borrowings | 6 | 6 | 6 | 6 | ||||||||||||||
Total | $ | 7,827 | $ | 8,281 | $ | 6,897 | $ | 7,153 | ||||||||||
Less: Current maturities of long-term debt | (650 | ) | (1 | ) | ||||||||||||||
Total long-term debt | $ | 7,177 | $ | 6,896 |
In millions | |||
2017 | $ | 650 | |
2018 | — | ||
2019 | 1,346 | ||
2020 | 4 | ||
2021 | 348 | ||
2022 and future years | 5,479 | ||
Total | $ | 7,827 |
Pension | Other Postretirement Benefits | |||||||||||||||||||||||
In millions | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||
Service cost | $ | 62 | $ | 70 | $ | 80 | $ | 9 | $ | 11 | $ | 10 | ||||||||||||
Interest cost | 92 | 92 | 103 | 24 | 24 | 24 | ||||||||||||||||||
Expected return on plan assets | (144 | ) | (151 | ) | (159 | ) | (23 | ) | (25 | ) | (25 | ) | ||||||||||||
Amortization of actuarial (gain) loss | 44 | 60 | 48 | — | (1 | ) | (4 | ) | ||||||||||||||||
Amortization of prior service cost | — | 1 | 1 | (1 | ) | 1 | 1 | |||||||||||||||||
Settlement/curtailment (gain) loss | — | — | 1 | — | — | (9 | ) | |||||||||||||||||
Total net periodic benefit cost | $ | 54 | $ | 72 | $ | 74 | $ | 9 | $ | 10 | $ | (3 | ) |
Pension | Other Postretirement Benefits | |||||||||||||||||||||||
In millions | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||||||||
Income from continuing operations | $ | 54 | $ | 72 | $ | 69 | $ | 9 | $ | 10 | $ | 6 | ||||||||||||
Income from discontinued operations | — | — | 5 | — | — | (9 | ) | |||||||||||||||||
Total net periodic benefit cost | $ | 54 | $ | 72 | $ | 74 | $ | 9 | $ | 10 | $ | (3 | ) |
Pension | Other Postretirement Benefits | |||||||||||||||
In millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at January 1 | $ | 2,462 | $ | 2,607 | $ | 552 | $ | 591 | ||||||||
Service cost | 62 | 70 | 9 | 11 | ||||||||||||
Interest cost | 92 | 92 | 24 | 24 | ||||||||||||
Plan participants’ contributions | 2 | 3 | 12 | 13 | ||||||||||||
Amendments | — | 1 | — | — | ||||||||||||
Actuarial (gain) loss | 216 | (82 | ) | (5 | ) | (43 | ) | |||||||||
Acquisitions and divestitures | 7 | — | — | — | ||||||||||||
Benefits paid | (150 | ) | (169 | ) | (43 | ) | (46 | ) | ||||||||
Medicare subsidy received | — | — | 2 | 2 | ||||||||||||
Foreign currency translation | (129 | ) | (60 | ) | — | — | ||||||||||
Benefit obligation at December 31 | $ | 2,562 | $ | 2,462 | $ | 551 | $ | 552 |
Pension | Other Postretirement Benefits | |||||||||||||||
In millions | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at January 1 | $ | 2,441 | $ | 2,557 | $ | 342 | $ | 372 | ||||||||
Actual return on plan assets | 274 | 16 | 36 | (3 | ) | |||||||||||
Company contributions | 70 | 97 | 4 | 6 | ||||||||||||
Plan participants’ contributions | 2 | 3 | 12 | 13 | ||||||||||||
Benefits paid | (150 | ) | (169 | ) | (43 | ) | (46 | ) | ||||||||
Foreign currency translation | (150 | ) | (63 | ) | — | — | ||||||||||
Fair value of plan assets at December 31 | $ | 2,487 | $ | 2,441 | $ | 351 | $ | 342 | ||||||||
Funded status | $ | (75 | ) | $ | (21 | ) | $ | (200 | ) | $ | (210 | ) | ||||
Other immaterial plans | (58 | ) | (50 | ) | (5 | ) | (5 | ) | ||||||||
Net liability at December 31 | $ | (133 | ) | $ | (71 | ) | $ | (205 | ) | $ | (215 | ) | ||||
The amounts recognized in the statement of financial position as of December 31 consist of: | ||||||||||||||||
Other assets | $ | 131 | $ | 191 | $ | — | $ | — | ||||||||
Accrued expenses | (12 | ) | (11 | ) | (4 | ) | (4 | ) | ||||||||
Other noncurrent liabilities | (252 | ) | (251 | ) | (201 | ) | (211 | ) | ||||||||
Net liability at end of year | $ | (133 | ) | $ | (71 | ) | $ | (205 | ) | $ | (215 | ) | ||||
The pre-tax amounts recognized in accumulated other comprehensive income consist of: | ||||||||||||||||
Net actuarial (gain) loss | $ | 673 | $ | 631 | $ | (38 | ) | $ | (20 | ) | ||||||
Prior service cost | — | — | — | (1 | ) | |||||||||||
$ | 673 | $ | 631 | $ | (38 | ) | $ | (21 | ) | |||||||
Accumulated benefit obligation | $ | 2,207 | $ | 2,297 | ||||||||||||
Plans with accumulated benefit obligation in excess of plan assets as of December 31: | ||||||||||||||||
Projected benefit obligation | $ | 183 | $ | 164 | ||||||||||||
Accumulated benefit obligation | $ | 167 | $ | 152 | ||||||||||||
Fair value of plan assets | $ | 25 | $ | 25 |
Pension | Other Postretirement Benefits | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Assumptions used to determine benefit obligations at December 31: | |||||||||||||||||
Discount rate | 3.41 | % | 3.95 | % | 3.70 | % | 4.30 | % | 4.55 | % | 4.15 | % | |||||
Rate of compensation increases | 3.77 | % | 3.72 | % | 3.72 | % | — | % | — | % | — | % | |||||
Assumptions used to determine net periodic benefit cost for years ended December 31: | |||||||||||||||||
Discount rate | 3.95 | % | 3.70 | % | 4.32 | % | 4.55 | % | 4.15 | % | 4.95 | % | |||||
Expected return on plan assets | 6.22 | % | 6.54 | % | 7.02 | % | 7.00 | % | 7.00 | % | 7.00 | % | |||||
Rate of compensation increases | 3.72 | % | 3.72 | % | 3.72 | % | — | % | — | % | — | % |
2016 | 2015 | 2014 | ||||||
Health care cost trend rate assumed for the next year | 6.00 | % | 6.00 | % | 8.00 | % | ||
Ultimate trend rate | 4.50 | % | 4.50 | % | 4.50 | % | ||
Year the rate reaches the ultimate trend rate | 2023 | 2021 | 2022 |
In millions | 1 Percentage-Point Increase | 1 Percentage-Point Decrease | ||||||
Change in service cost and interest cost for 2016 | $ | — | $ | (1 | ) | |||
Change in postretirement benefit obligation at December 31, 2016 | $ | 6 | $ | (14 | ) |
2016 | ||||||||||||||||
In millions | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Pension Plan Assets: | ||||||||||||||||
Cash and equivalents | $ | 82 | $ | 55 | $ | 27 | $ | — | ||||||||
Equity securities: | ||||||||||||||||
Domestic | 1 | 1 | — | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Government securities | 307 | — | 307 | — | ||||||||||||
Corporate debt securities | 541 | — | 541 | — | ||||||||||||
Mortgage-backed securities | 19 | — | 19 | — | ||||||||||||
Investment contracts with insurance companies | 1 | — | — | 1 | ||||||||||||
Commingled funds: | ||||||||||||||||
Collective trust funds | 1,478 | |||||||||||||||
Partnerships/private equity interests | 54 | |||||||||||||||
Other | 4 | |||||||||||||||
Total fair value of pension plan assets | $ | 2,487 | $ | 56 | $ | 894 | $ | 1 | ||||||||
Other Postretirement Benefit Plan Assets: | ||||||||||||||||
Cash and equivalents | $ | 1 | $ | 1 | $ | — | $ | — | ||||||||
Life insurance policies | 350 | |||||||||||||||
Total fair value of other postretirement benefit plan assets | $ | 351 | $ | 1 | $ | — | $ | — |
2015 | ||||||||||||||||
In millions | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Pension Plan Assets: | ||||||||||||||||
Cash and equivalents | $ | 53 | $ | 53 | $ | — | $ | — | ||||||||
Equity securities: | ||||||||||||||||
Domestic | 1 | 1 | — | — | ||||||||||||
Foreign | 62 | 62 | — | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Government securities | 285 | — | 285 | — | ||||||||||||
Corporate debt securities | 483 | — | 483 | — | ||||||||||||
Investment contracts with insurance companies | 1 | — | — | 1 | ||||||||||||
Commingled funds: | ||||||||||||||||
Mutual funds | 145 | 145 | — | — | ||||||||||||
Collective trust funds | 1,347 | |||||||||||||||
Partnerships/private equity interests | 66 | |||||||||||||||
Other | (2 | ) | — | (2 | ) | — | ||||||||||
Total fair value of pension plan assets | $ | 2,441 | $ | 261 | $ | 766 | $ | 1 | ||||||||
Other Postretirement Benefit Plan Assets: | ||||||||||||||||
Cash and equivalents | $ | 8 | $ | 8 | $ | — | $ | — | ||||||||
Life insurance policies | 334 | |||||||||||||||
Total fair value of other postretirement benefit plan assets | $ | 342 | $ | 8 | $ | — | $ | — |
In millions | Pension | Other Postretirement Benefits | ||||||
2017 | $ | 182 | $ | 35 | ||||
2018 | 181 | 36 | ||||||
2019 | 183 | 37 | ||||||
2020 | 185 | 38 | ||||||
2021 | 184 | 38 | ||||||
Years 2022-2026 | 882 | 193 |
In millions | |||
2017 | $ | 104 | |
2018 | 75 | ||
2019 | 53 | ||
2020 | 37 | ||
2021 | 26 | ||
2022 and future years | 43 | ||
Total future minimum lease payments | $ | 338 |
In millions | 2016 | 2015 | 2014 | |||||||||
Beginning balance | $ | (1,504 | ) | $ | (658 | ) | $ | 384 | ||||
Foreign currency translation adjustments during the period | (251 | ) | (800 | ) | (806 | ) | ||||||
Foreign currency translation adjustments reclassified to income | (1 | ) | — | (133 | ) | |||||||
Income taxes | (25 | ) | (60 | ) | — | |||||||
Total foreign currency translation adjustments, net of tax | (277 | ) | (860 | ) | (939 | ) | ||||||
Pension and other postretirement benefit adjustments during the period | (67 | ) | (41 | ) | (224 | ) | ||||||
Pension and other postretirement benefit adjustments reclassified to income | 43 | 61 | 54 | |||||||||
Income taxes | (2 | ) | (6 | ) | 67 | |||||||
Total pension and other postretirement benefit adjustments, net of tax | (26 | ) | 14 | (103 | ) | |||||||
Ending balance | $ | (1,807 | ) | $ | (1,504 | ) | $ | (658 | ) |
In millions | 2016 | 2015 | 2014 | |||||||||
Pre-tax compensation expense | $ | 39 | $ | 35 | $ | 34 | ||||||
Tax benefit | (13 | ) | (12 | ) | (12 | ) | ||||||
Total stock-based compensation expense, net of tax | $ | 26 | $ | 23 | $ | 22 |
Shares in millions | Number of Shares | Weighted-Average Grant-Date Fair Value | |||
Unvested, January 1, 2016 | 0.8 | $73.58 | |||
Granted | 0.3 | 85.61 | |||
Vested | (0.3 | ) | 61.14 | ||
Canceled | (0.1 | ) | 83.12 | ||
Unvested, December 31, 2016 | 0.7 | 83.39 |
In millions except exercise price and contractual terms | Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||
Under option, January 1, 2016 | 6.4 | $61.44 | |||||||
Granted | 0.6 | 91.88 | |||||||
Exercised | (1.6 | ) | 50.66 | ||||||
Canceled or expired | (0.1 | ) | 87.15 | ||||||
Under option, December 31, 2016 | 5.3 | 68.05 | 5.9 | $290 | |||||
Exercisable, December 31, 2016 | 3.7 | 59.72 | 4.9 | $232 |
2016 | 2015 | 2014 | ||||
Risk-free interest rate | 0.56-1.86% | 0.23-2.25% | 0.16-2.83% | |||
Weighted-average volatility | 24.0% | 23.0% | 22.9% | |||
Dividend yield | 2.12% | 2.11% | 2.46% | |||
Expected years until exercise | 6.9-7.7 | 6.9-8.0 | 6.7-7.9 |
In millions | 2016 | 2015 | ||||||
Prepaid expenses and other current assets: | ||||||||
Value-added-tax receivables | $ | 55 | $ | 48 | ||||
Income tax refunds receivable | 21 | 147 | ||||||
Vendor advances | 20 | 22 | ||||||
Other | 122 | 124 | ||||||
Total prepaid expenses and other current assets | $ | 218 | $ | 341 | ||||
Other assets: | ||||||||
Cash surrender value of life insurance policies | $ | 442 | $ | 428 | ||||
Customer tooling | 146 | 88 | ||||||
Prepaid pension assets | 131 | 191 | ||||||
Investments | 73 | 99 | ||||||
Equity investment in Wilsonart (See Note 4) | — | 113 | ||||||
Other | 164 | 168 | ||||||
Total other assets | $ | 956 | $ | 1,087 | ||||
Accrued expenses: | ||||||||
Compensation and employee benefits | $ | 379 | $ | 363 | ||||
Deferred revenue and customer deposits | 180 | 169 | ||||||
Rebates | 144 | 125 | ||||||
Warranties | 45 | 46 | ||||||
Current portion of pension and other postretirement benefit obligations | 16 | 15 | ||||||
Other | 438 | 418 | ||||||
Total accrued expenses | $ | 1,202 | $ | 1,136 | ||||
Other liabilities: | ||||||||
Pension benefit obligation | $ | 252 | $ | 251 | ||||
Postretirement benefit obligation | 201 | 211 | ||||||
Other | 418 | 519 | ||||||
Total other liabilities | $ | 871 | $ | 981 |
In millions | 2016 | 2015 | 2014 | |||||||||
Operating revenue: | ||||||||||||
Automotive OEM | $ | 2,864 | $ | 2,529 | $ | 2,590 | ||||||
Food Equipment | 2,110 | 2,096 | 2,177 | |||||||||
Test & Measurement and Electronics | 1,974 | 1,969 | 2,204 | |||||||||
Welding | 1,486 | 1,650 | 1,850 | |||||||||
Polymers & Fluids | 1,691 | 1,712 | 1,927 | |||||||||
Construction Products | 1,609 | 1,587 | 1,707 | |||||||||
Specialty Products | 1,885 | 1,885 | 2,055 | |||||||||
Intersegment revenue | (20 | ) | (23 | ) | (26 | ) | ||||||
Total | $ | 13,599 | $ | 13,405 | $ | 14,484 | ||||||
Operating income: | ||||||||||||
Automotive OEM | $ | 690 | $ | 613 | $ | 600 | ||||||
Food Equipment | 537 | 498 | 453 | |||||||||
Test & Measurement and Electronics | 372 | 322 | 340 | |||||||||
Welding | 370 | 415 | 479 | |||||||||
Polymers & Fluids | 343 | 335 | 357 | |||||||||
Construction Products | 361 | 316 | 289 | |||||||||
Specialty Products | 482 | 439 | 440 | |||||||||
Total Segments | 3,155 | 2,938 | 2,958 | |||||||||
Unallocated | (91 | ) | (71 | ) | (70 | ) | ||||||
Total | $ | 3,064 | $ | 2,867 | $ | 2,888 | ||||||
Depreciation and amortization and impairment of intangible assets: | ||||||||||||
Automotive OEM | $ | 90 | $ | 76 | $ | 79 | ||||||
Food Equipment | 45 | 48 | 52 | |||||||||
Test & Measurement and Electronics | 104 | 110 | 115 | |||||||||
Welding | 36 | 37 | 38 | |||||||||
Polymers & Fluids | 92 | 95 | 99 | |||||||||
Construction Products | 34 | 36 | 43 | |||||||||
Specialty Products | 69 | 75 | 81 | |||||||||
Total | $ | 470 | $ | 477 | $ | 507 | ||||||
Plant and equipment additions: | ||||||||||||
Automotive OEM | $ | 116 | $ | 106 | $ | 96 | ||||||
Food Equipment | 31 | 37 | 47 | |||||||||
Test & Measurement and Electronics | 25 | 32 | 56 | |||||||||
Welding | 16 | 23 | 36 | |||||||||
Polymers & Fluids | 18 | 20 | 28 | |||||||||
Construction Products | 20 | 26 | 41 | |||||||||
Specialty Products | 47 | 40 | 54 | |||||||||
Total Segments | 273 | 284 | 358 | |||||||||
Discontinued Operations | — | — | 3 | |||||||||
Total | $ | 273 | $ | 284 | $ | 361 | ||||||
Identifiable assets: | ||||||||||||
Automotive OEM | $ | 2,051 | $ | 1,419 | $ | 1,454 | ||||||
Food Equipment | 1,013 | 1,054 | 1,123 | |||||||||
Test & Measurement and Electronics | 2,362 | 2,448 | 2,615 | |||||||||
Welding | 701 | 747 | 879 | |||||||||
Polymers & Fluids | 2,019 | 2,034 | 2,257 | |||||||||
Construction Products | 1,099 | 1,129 | 1,249 | |||||||||
Specialty Products | 1,599 | 1,659 | 1,798 | |||||||||
Total Segments | 10,844 | 10,490 | 11,375 | |||||||||
Corporate | 4,357 | 5,239 | 6,090 | |||||||||
Total | $ | 15,201 | $ | 15,729 | $ | 17,465 |
In millions | 2016 | 2015 | 2014 | |||||||||
Operating Revenue by Geographic Region: | ||||||||||||
United States | $ | 6,176 | $ | 6,167 | $ | 6,191 | ||||||
Canada/Mexico | 923 | 928 | 993 | |||||||||
Total North America | 7,099 | 7,095 | 7,184 | |||||||||
Europe, Middle East and Africa | 3,787 | 3,725 | 4,319 | |||||||||
Asia Pacific | 2,361 | 2,197 | 2,427 | |||||||||
South America | 352 | 388 | 554 | |||||||||
Total Operating Revenue | $ | 13,599 | $ | 13,405 | $ | 14,484 |
Three Months Ended | ||||||||||||||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||||||||||||||||||
In millions except per share amounts | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Operating revenue | $ | 3,274 | $ | 3,342 | $ | 3,431 | $ | 3,434 | $ | 3,495 | $ | 3,354 | $ | 3,399 | $ | 3,275 | ||||||||||||||||
Cost of revenue | 1,896 | 1,970 | 1,967 | 2,024 | 2,027 | 1,953 | 2,006 | 1,941 | ||||||||||||||||||||||||
Operating income | 722 | 697 | 792 | 730 | 808 | 761 | 742 | 679 | ||||||||||||||||||||||||
Net income | 468 | 458 | 525 | 480 | 535 | 511 | 507 | 450 | ||||||||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||||
Basic | 1.29 | 1.22 | 1.47 | 1.31 | 1.51 | 1.40 | 1.46 | 1.24 | ||||||||||||||||||||||||
Diluted | 1.29 | 1.21 | 1.46 | 1.30 | 1.50 | 1.39 | 1.45 | 1.23 |
ILLINOIS TOOL WORKS INC. | ||
By: | /s/ E. SCOTT SANTI | |
E. Scott Santi | ||
Chairman & Chief Executive Officer |
Signatures | Title | |
/s/ E. SCOTT SANTI | Chairman & Chief Executive Officer, Director | |
E. Scott Santi | (Principal Executive Officer) | |
/s/ MICHAEL M. LARSEN | Senior Vice President & Chief Financial Officer | |
Michael M. Larsen | (Principal Financial Officer) | |
/s/ RANDALL J. SCHEUNEMAN | Vice President & Chief Accounting Officer | |
Randall J. Scheuneman | (Principal Accounting Officer) | |
DANIEL J. BRUTTO | Director | |
SUSAN CROWN | Director | |
JAMES W. GRIFFITH | Director | |
JAY L. HENDERSON | Director | |
RICHARD H. LENNY | Director | |
ROBERT S. MORRISON | Director | |
JAMES A. SKINNER | Director | |
DAVID B. SMITH, JR. | Director | |
PAMELA B. STROBEL | Director | |
KEVIN M. WARREN | Director | |
ANRÉ D. WILLIAMS | Director | |
By: /s/ E. SCOTT SANTI | ||
(E. Scott Santi, as Attorney-in-Fact) |
Exhibit Number | Description | |
2.1(a) | Investment Agreement, dated as of August 15, 2012, among CD&R Wimbledon Holdings III, L.P., a Cayman Islands limited partnership; Illinois Tool Works Inc.; ITW DS Investments Inc., a Delaware corporation; and Wilsonart International Holdings LLC, a Delaware limited liability company, filed as Exhibit 2.1 to the Company's Current Report on Form 8-K filed on August 17, 2012 (Commission File No. 1-4797) and incorporated herein by reference. (Certain of the schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but the Company undertakes to furnish a copy of the schedules or similar attachments to the Securities and Exchange Committee upon request.) | |
2.1(b) | Stock Purchase Agreement, dated as of February 6, 2014, between Illinois Tool Works Inc. and certain of its subsidiaries and Vault Bermuda Holding Co. Ltd., filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 12, 2014. (Commission File No. 1-4797) and incorporated herein by reference. (Certain of the schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but the Company undertakes to furnish a copy of the schedules or similar attachments to the Securities and Exchange Commission upon request). | |
3(a)(i) | Amended and Restated Certificate of Incorporation of Illinois Tool Works Inc., filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
3(a)(ii) | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Illinois Tool Works Inc., filed as Exhibit 3(a)(ii) to the Company’s Form 8-K filed on May 12, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
3(b) | By-laws of Illinois Tool Works Inc., as amended and restated as of May 6, 2016, filed as Exhibit 3(b)(i) to the Company’s Form 8-K filed on May 12, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
4(a) | Indenture between Illinois Tool Works Inc. and The First National Bank of Chicago, as Trustee, dated as of November 1, 1986, filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed on January 15, 1999 (Commission File No. 333-70691) and incorporated herein by reference. | |
4(b) | First Supplemental Indenture between Illinois Tool Works Inc. and Harris Trust and Savings Bank, as Trustee, dated as of May 1, 1990, filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-3 filed on January 15, 1999 (Commission File No. 333-70691) and incorporated herein by reference. | |
4(c) | Officers’ Certificate dated March 26, 2009 establishing the terms, and setting forth the forms, of the 5.15% Notes due 2014 and the 6.25% Notes due 2019, filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on March 27, 2009 (Commission File No. 1-4797) and incorporated herein by reference. | |
4(d) | Officers’ Certificate dated August 31, 2011, establishing the terms, and setting forth the forms, of the 3.375% Notes due 2021 and the 4.875% Notes due 2041, filed as Exhibit 4.3 to the Company’s Form 8-K filed on September 1, 2011 (Commission File No. 001-04797) and incorporated herein by reference. | |
4(e) | Officers' Certificate dated August 28, 2012, establishing the terms, and setting forth the forms, of the 3.9% Notes due 2042, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 28, 2012 (Commission File No. 001-4797) and incorporated herein by reference. | |
4(f) | Officers’ Certificate dated February 25, 2014, establishing the terms, and setting forth the forms, of the 0.9% Notes due 2017, the 1.95% Notes due 2019, and the 3.5% Notes due 2024, filed as Exhibit 4.1 to the Company’s Form 8-K filed on February 26, 2014 (Commission File No. 001-04797) and incorporated herein by reference. | |
4(g) | Officers’ Certificate dated May 20, 2014, establishing the terms, and setting forth the forms, of the 1.75% Euro Notes due 2022 and the 3.0% Euro Notes due 2034, filed as Exhibit 4.1 to the Company’s Form 8-K filed on May 22, 2014 (Commission File No. 001-04797) and incorporated herein by reference. | |
4(h) | Officers’ Certificate dated May 19, 2015, establishing the terms, and setting forth the forms, of the 1.25% Euro Notes due 2023 and the 2.125% Euro Notes due 2030, filed as Exhibit 4.1 to the Company’s Form 8-K filed on May 22, 2015 (Commission File No. 001-04797) and incorporated herein by reference. | |
4(i) | Officer’s Certificate dated November 7, 2016, establishing the terms, and setting forth the forms, of the 2.65% Notes due 2026, filed as Exhibit 4.1 to the Company’s Form 8-K filed on November 1, 2016 (Commission File No. 001-04797) and incorporated herein by reference. | |
Exhibit Number | Description | |
10(a)* | Illinois Tool Works Inc. 2006 Stock Incentive Plan dated February 10, 2006, as amended on May 5, 2006, filed as Exhibit 10(a) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(b)* | Amendment to Illinois Tool Works Inc. 2006 Stock Incentive Plan dated February 8, 2008, filed as Exhibit 10(q) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(c)* | Second Amendment to Illinois Tool Works Inc. 2006 Stock Incentive Plan dated February 13, 2009, filed as Exhibit 10(d) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(d)* | Illinois Tool Works Inc. 2011 Long-Term Incentive Plan, filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on December 16, 2010 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(e)* | Illinois Tool Works Inc. 2015 Long-Term Incentive Plan effective May 8, 2015, filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(f)* | Form of stock option terms filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on February 5, 2009 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(g)* | Form of stock option terms filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on February 9, 2011 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(h)* | Form of stock option terms filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on February 7, 2012 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(i)* | Form of stock option terms filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on February 13, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(j)* | Form of restricted stock unit terms filed as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on February 13, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(k)* | Form of performance restricted stock unit terms filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on February 13, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(l)* | Form of Long-Term Incentive Cash Grant filed as Exhibit 99.4 to the Company’s Current Report on Form 8-K filed on February 13, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(m)* | Form of stock option terms filed as Exhibit 99.1 to the Company's Current Report on Form 8-K filed on February 9, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(n)* | Form of restricted stock unit terms filed as Exhibit 99.2 to the Company's Current Report on Form 8-K filed on February 9, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(o)* | Form of performance restricted stock unit terms filed as Exhibit 99.3 to the Company's Current Report on Form 8-K filed on February 9, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(p)* | Form of Long-Term Incentive Cash Grant filed as Exhibit 99.4 to the Company's Current Report on Form 8-K filed on February 9, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(q)* | Form of stock option terms filed as Exhibit 99.1 to the Company's Current Report on Form 8-K filed on February 9, 2017 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(r)* | Form of restricted stock unit terms filed as Exhibit 99.2 to the Company's Current Report on Form 8-K filed on February 9, 2017 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(s)* | Form of performance share unit terms filed as Exhibit 99.3 to the Company's Current Report on Form 8-K filed on February 9, 2017 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(t)* | Form of Performance Cash Grant filed as Exhibit 99.4 to the Company's Current Report on Form 8-K filed on February 9, 2017 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(u)* | Illinois Tool Works Inc. 2011 Executive Incentive Plan, filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on December 16, 2010 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(v)* | Illinois Tool Works Inc. Executive Contributory Retirement Income Plan as amended and restated, effective January 1, 2010, filed as exhibit 10 to the Company’s Current Report on Form 8-K filed on November 5, 2009 (Commission File No. 1-4797) and incorporated herein by reference. | |
Exhibit Number | Description | |
10(w)* | Illinois Tool Works Inc. Nonqualified Pension Plan, effective January 1, 2008, as amended and approved by the Board of Directors on December 22, 2008, filed as Exhibit 10(p) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(x)* | Illinois Tool Works Inc. 2011 Change-in-Control Severance Compensation Policy, filed as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on December 16, 2010 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(y)* | Illinois Tool Works Inc. Amended and Restated Directors’ Deferred Fee Plan effective May 2, 2014, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(z)* | Illinois Tool Works Inc. 2011 Cash Incentive Plan, filed as Exhibit 99.1 to the Company’s Form 8-K filed on May 12, 2011 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(aa)* | First Amendment to the ITW Contributory Retirement Income Plan dated February 15, 2013, filed as Exhibit 10.2 to the Company’s Current Form 10-Q filed on May 3, 2013 (Commission File No. 1-4797) and incorporated herein by reference. | |
10(bb) | Five Year Credit Agreement dated as of May 9, 2016 among Illinois Tool Works Inc., the Lenders, JPMorgan Chase Bank, National Association, as Administrative Agent, and Citibank, N.A., as Syndication Agent filed as Exhibit 10(a) to the Company’s Form 8-K filed on May 12, 2016 (Commission File No. 1-4797) and incorporated herein by reference. | |
21 | Subsidiaries and Affiliates of the Company. | |
23 | Consent of Independent Registered Public Accounting Firm. | |
24 | Powers of Attorney. | |
31 | Rule 13a-14(a) Certifications. | |
32 | Section 1350 Certification. | |
99(a) | A description of the capital stock of Illinois Tool Works Inc. is included under Item 8.01 Other Events in the Company's Report on Form 8-K filed on February 9, 2017 (Commission File No. 1-4797) and incorporated herein by reference. | |
101.INS | XBRL Instance Document** | |
101.SCH | XBRL Taxonomy Extension Schema** | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase** | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase** | |
101.LAB | XBRL Taxonomy Extension Label Linkbase** | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase** |
* | Management contract or compensatory plan or arrangement. |
** | The following financial information from Illinois Tool Works Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) Statement of Income, (ii) Statement of Comprehensive Income, (iii) Statement of Income Reinvested in the Business (iv) Statement of Financial Position, (v) Statement of Cash Flows and (vi) related Notes to Financial Statements. |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
A V Co 1 Limited | United Kingdom | ||
A V Co 1 Limited | Delaware | ||
A V Co 2 Limited | United Kingdom | ||
A V Co 2 Limited | Nevada | ||
A V Co 3 Limited | United Kingdom | ||
A V Co 3 Limited | Nevada | ||
Accessories Marketing Holding Corp. | Delaware | ||
ACCULUBE Manufacturing GmbH - Schmiermittel und -geräte - | Germany | ||
Advanced Molding Company, Inc. | Philippines | ||
AIP/BI Holdings, Inc. | Delaware | ||
Allen Coding GmbH | Germany | ||
Allen France SAS | France | ||
Alpine Automation Limited | United Kingdom | ||
Alpine Holdings, Inc. | Delaware | ||
Alpine Systems Corporation | Canada | ||
Anaerobicos S.r.l. | Argentina | ||
Anahol S.A. | Argentina | ||
Appleton Investments II L.L.C. | Delaware | ||
Appleton Investments L.L.C. | Delaware | ||
AppliChem GmbH | Germany | ||
AppliChem, Inc. | Connecticut | ||
Ark-Les Components, S.A. de C.V. | Mexico | ||
Arylux Hungary Elektromechanikus Alkatreszgyarto Kft | Hungary | ||
Auralex du Mont de Magny | France | ||
Avery Berkel France | France | ||
Avery India Limited | India | ||
Avery Malaysia Sdn Bhd | Malaysia | ||
Avery Weigh-Tronix (Suzhou) Weighing Technology Co. Ltd. | China | ||
Avery Weigh-Tronix B.V. | Netherlands | ||
Avery Weigh-Tronix Finance Limited | United Kingdom | ||
Avery Weigh-Tronix Holdings Limited | Nevada | ||
Avery Weigh-Tronix Holdings Limited | United Kingdom | ||
Avery Weigh-Tronix International Limited | United Kingdom | ||
Avery Weigh-Tronix Limited | United Kingdom | ||
Avery Weigh-Tronix Private Limited | India | ||
Avery Weigh-Tronix Properties Limited | United Kingdom | ||
Avery Weigh-Tronix, LLC | Delaware | ||
Axa Power ApS | Denmark | ||
B.C. Immo | France | ||
Bangalore Integrated System Solutions Private Ltd | India | ||
Beijing Miller Electric Manufacturing Co. Ltd. | China | ||
Berkel (Ireland) Limited | Ireland | ||
Berrington UK | United Kingdom | ||
Bonnet Benelux BVBA | Belgium | ||
Brapenta Eletronica Ltda. | Brazil | ||
Brooks Instrument (Hong Kong) Limited | Hong Kong | ||
Brooks Instrument (Shanghai) Co. Ltd | China | ||
Brooks Instrument Asia | Mauritius | ||
Brooks Instrument B.V. | Netherlands | ||
Brooks Instrument GmbH | Germany | ||
Brooks Instrument India Private Limited | India | ||
Brooks Instrument KFT | Hungary | ||
Brooks Instrument Korea, Ltd. | South Korea | ||
Brooks Instrument LLC | Delaware | ||
Buell Industries, Inc. | Delaware |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
Calvia sp. z.o.o. | Poland | ||
Capital Ventures (Australasia) S.à r.l | Luxembourg | ||
CAPMAX Logística S.A. de C.V. | Mexico | ||
Capmax Logistica, S.A. de C.V. | Delaware | ||
CCI Realty Company | Delaware | ||
Celeste Industries Corporation | Connecticut | ||
Cetram Pty Limited | Australia | ||
CFC Europe GmbH | Germany | ||
CFC International Corporation | Delaware | ||
Cheer Bright Ltd. | British Virgin Island | ||
Coeur (Shanghai) Medical Appliance Trading Co., Ltd | China | ||
Coeur Asia Limited | Hong Kong | ||
Coeur Holding Company | Delaware | ||
Coeur, Inc. | Indiana | ||
COMPAGNIE DE MATERIEL ET D'EQUIPEMENTS TECHNIQUES COMET | France | ||
Compagnie Hobart | France | ||
Constructions Isothermiques Bontami C.I.B. | France | ||
CS (Australasia) Limited | Bermuda | ||
CS (Australia) Pty Limited | Australia | ||
CS (Europe) Holdings II Ltd. | Bermuda | ||
CS (Far East) Holding Company Ltd. | Bermuda | ||
CS (Finance) Europe S.a.r.l. | Luxembourg | ||
CS (Global) Holdings II Ltd. | Bermuda | ||
CS Domestic Financing Inc. | Delaware | ||
CS Financing I LLC | Delaware | ||
CS Financing II LLC | Delaware | ||
CS Mexico Holding Company S DE RL DE CV | Mexico | ||
CS Packaging Corporation Ltd. | British Virgin Island | ||
CSMTS LLC | Delaware | ||
D.F. International (Dominican Republic) Inc. | Delaware | ||
Densit ApS | Denmark | ||
Densit Asia Pacific Sdn Bhd | Malaysia | ||
Despatch Industries (Shanghai) Trading Co., Ltd. | China | ||
Despatch Industries Limited Partnership | Minnesota | ||
DGFC Inc. | Delaware | ||
Diagraph Corporation Sdn. Bhd | Malaysia | ||
Diagraph ITW Mexico, S. de R.L. De C.V. | Mexico | ||
Diagraph México, S.A. DE C.V. | Mexico | ||
Dongguan Ark-Les Electric Components Co., Ltd. | China | ||
Dongguan CK Branding Co., Ltd. | China | ||
Dorbyl U.K. (Holdings) Limited | United Kingdom | ||
Duo Fast de Espana S.A.U. | Spain | ||
Duo-Fast Corporation | Illinois | ||
Duo-Fast Korea Co. Ltd. | South Korea | ||
E.C.S. d.o.o. | Croatia | ||
ECS Cable Protection Sp. Zoo | Poland | ||
Electric Light Development Ltd. | British Virgin Island | ||
Elga Aktiebolag | Sweden | ||
Elga Skandinavian AS | Norway | ||
ELRO (Holding) AG | Switzerland | ||
ELRO Grosskuchen GmbH | Austria | ||
ELRO Grosskuchen GmbH | Germany | ||
ELRO-WERKE AG | Switzerland | ||
Eltex-Elektrostatik-Gesellschaft mit beschränkter Haftung | Germany | ||
Envases Multipac, S.A. de C.V. | Mexico |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
Epirez Australia Pty Ltd | Australia | ||
Eurotec Srl | Italy | ||
Fasver | France | ||
FEG Investments L.L.C. | Delaware | ||
Filtertek | France | ||
Filtertek De Mexico Holding Inc. | Delaware | ||
Filtertek De Mexico, S.A. de C.V. | Mexico | ||
Foster Refrigerator France | France | ||
Gamko B.V. | Netherlands | ||
Gamko Réfrigération | France | ||
GC Financement SA | France | ||
Gold Pattern Holdings Limited | British Virgin Island | ||
GSE Holdings Inc. | Delaware | ||
GSE IP LLC | Delaware | ||
Gun Hwa Platech (Taicang) Co. Ltd. | China | ||
Hartness International Europe, GmbH | Germany | ||
Heger Holland B.V | Netherlands | ||
Hobart (Japan) K.K. | Japan | ||
Hobart Andina S.A.S. | Colombia | ||
Hobart Brothers Company | Ohio | ||
Hobart Brothers International Chile Limitada | Chile | ||
Hobart Corporation | Delaware | ||
Hobart Dayton Mexicana, S. de R.L. de C.V. | Mexico | ||
Hobart Food Equipment Co., Ltd. | China | ||
Hobart Foster Belgium B.V.B.A. | Belgium | ||
HOBART Gesellschaft mit beschränkter Haftung | Germany | ||
Hobart International (Singapore) Pte. Ltd. | Singapore | ||
Hobart Korea Co. Ltd. | South Korea | ||
Hobart Nederland B.V. | Netherlands | ||
Hobart Sales & Service, Inc. | Ohio | ||
Hobart Scandinavia ApS | Denmark | ||
Hobart Techniek B.V. | Netherlands | ||
Hopital Services Systemes | France | ||
Horis | France | ||
I.T.W. Inc. | Illinois | ||
ILC Investments Holdings Inc. | Delaware | ||
Illinois Tool Works (Chile) Limitada | Chile | ||
Illinois Tool Works (ITW) Nederland B.V. | Netherlands | ||
Illinois Tool Works Norway AS | Norway | ||
Impar Comercio E Representacoes Ltda. | Brazil | ||
Industrie Plastic Elsässer GmbH | Germany | ||
Inmobiliaria Cit., S.A. de C.F. | Mexico | ||
INN SP Z.o.o. | Poland | ||
Innova Temperlite 1200, S.A. de C.V. | Mexico | ||
Innova Temperlite Servicios, S.A. de C.V. | Mexico | ||
Instron (Shanghai) Experiment Equipment Trade Co., Ltd. | China | ||
Instron (Thailand) Limited | Thailand | ||
Instron Brasil Equipamentos Cientificos Ltda. | Brazil | ||
Instron Foreign Sales Corp. Limited | Jamaica | ||
Instron France | France | ||
Instron GmbH | Germany | ||
Instron Holdings Limited | United Kingdom | ||
Instron International Limited | United Kingdom | ||
Instron Japan Company, Ltd. | Massachusetts | ||
Instron Korea LLC | South Korea |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
Instron Proprietary Limited | Australia | ||
International Leasing Company | Delaware | ||
International Truss Systems Proprietary Limited | South Africa | ||
IPHC LLC | Delaware | ||
Isolenge Termo Construcoes Ltda. | Brazil | ||
ITW (China) Investment Company Limited | China | ||
ITW (Deutschland) GmbH | Germany | ||
ITW (EU) Holdings Ltd. | Bermuda | ||
ITW (Ningbo) Components & Fastenings Systems Co., Ltd. | China | ||
ITW AAM Comércio e Distribuição de Produtos Automotivos Ltda. | Brazil | ||
ITW Acmor (Shanghai) Co., Ltd. | China | ||
ITW AEP LLC | Delaware | ||
ITW AFC Pty Ltd | Australia | ||
ITW Aircraft Investments Inc. | Delaware | ||
ITW Airport Ground Equipment (Beijing) Co. Ltd. | China | ||
ITW Alpha Sárl | Luxembourg | ||
ITW Ampang Industries Philippines, Inc. | Philippines | ||
ITW AOC, LLC | South Korea | ||
ITW Ark-Les Corporation | Massachusetts | ||
ITW Australia Holdings Pty Ltd | Australia | ||
ITW Australia Property Holdings Pty Ltd. | Australia | ||
ITW Australia Pty Ltd | Australia | ||
ITW Austria Vertriebs GmbH | Austria | ||
ITW Automotive Components (Chongqing) Co. Ltd. | China | ||
ITW Automotive Components (Langfang) Co., Ltd. | China | ||
ITW Automotive Fasteners Shanghai Co. Ltd | China | ||
ITW Automotive Japan K.K. | Japan | ||
ITW Automotive Korea, LLC | South Korea | ||
ITW Automotive Products GmbH | Germany | ||
ITW Automotive Products México, S. de R.L. de C.V. | Mexico | ||
ITW Bailly Comte | France | ||
ITW Befestigungssysteme Alpen GmbH | Switzerland | ||
ITW Befestigungssysteme GmbH | Germany | ||
ITW Belgium | Belgium | ||
ITW Brazilian Nominee L.L.C. | Delaware | ||
ITW Building Components Group Inc. | Delaware | ||
ITW Business Development S.à r.l. | Luxembourg | ||
ITW Canada Holdings Company | Canada | ||
ITW Canada Inc. | Canada | ||
ITW Canada Investments Limited Partnership | Canada | ||
ITW Canada Management Company/Compagnie Gestion ITW Canada | Canada | ||
ITW CCIP Holdings LLC | Delaware | ||
ITW Celeste Inc. | Delaware | ||
ITW CER | France | ||
ITW Chemical Products Ltda | Brazil | ||
ITW Chemical Products Scandinavia ApS | Denmark | ||
ITW Colombia S.A.S. | Colombia | ||
ITW Construction Products (Shanghai) Co. Ltd. | China | ||
ITW Construction Products (Singapore) Pte. Ltd. | Singapore | ||
ITW Construction Products (Suzhou) Company Limited | China | ||
ITW Construction Products AB | Sweden | ||
ITW Construction Products ApS | Denmark | ||
ITW Construction Products AS | Norway | ||
ITW Construction Products CZ s.r.o. | Czech Republic | ||
ITW Construction Products Italy Srl | Italy |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
ITW Construction Products Malaysia Sdn. Bhd. | Malaysia | ||
ITW Construction Products OU | Estonia | ||
ITW Construction Products OY | Finland | ||
ITW Contamination Control (Wujiang) Co., Ltd. | China | ||
ITW Contamination Control B.V. | Netherlands | ||
ITW Covid Security Group Inc. | Delaware | ||
ITW CP Distribution Center Holland BV | Netherlands | ||
ITW CS (UK) Ltd. | United Kingdom | ||
ITW Cupids, L.P. | Delaware | ||
ITW de France | France | ||
ITW de Guatemala Y Compañia, Sociedad en Comandita por Acciones | Guatemala | ||
ITW DelFast do Brasil Ltda. | Brazil | ||
ITW Delta Sárl | Luxembourg | ||
ITW Denmark ApS | Denmark | ||
ITW do Brasil Industrial e Comercial Ltda. | Brazil | ||
ITW Domestic Finance II Inc. | Delaware | ||
ITW Domestic Holdings Inc. | Delaware | ||
ITW DS Investments Inc. | Delaware | ||
ITW Dynatec Adhesive Equipment (Suzhou) Co. Ltd. | China | ||
ITW Dynatec GmbH | Germany | ||
ITW Dynatec Kabushiki Kaisha | Japan | ||
ITW Dynatec Singapore Pte. Ltd. | Singapore | ||
ITW EF&C France SAS | France | ||
ITW EF&C Korea, Inc. | South Korea | ||
ITW EF&C Selb GmbH | Germany | ||
ITW Electronic Business Asia Co., Limited | Taiwan | ||
ITW Electronic Components/Products (Shanghai) Co., Ltd. | China | ||
ITW Electronic Packaging (Malta) Ltd. | Malta | ||
ITW Electronics (Suzhou) Co., Ltd. | China | ||
ITW Engineered Polymers GmbH | Germany | ||
ITW Epsilon Sárl | Luxembourg | ||
ITW Espana S.A. | Spain | ||
ITW Fastener Products GmbH | Germany | ||
ITW FEG do Brasil Industria e Comercio Ltda. | Brazil | ||
ITW FEG do Brasil Industria e Comercio Ltda. | Brazil | ||
ITW FEG Hong Kong Limited | Hong Kong | ||
ITW Finance Europe S.A. | Luxembourg | ||
ITW Finance Europe S.A. | Delaware | ||
ITW Finance II L.L.C. | Delaware | ||
ITW Finance Limited | Ireland | ||
ITW Fluids and Hygiene Solutions Ltda. | Brazil | ||
ITW Foils B.V. | Netherlands | ||
ITW Foils, S.L.U. | Spain | ||
ITW Food Equipment Group LLC | Delaware | ||
ITW Gamma Sárl | Luxembourg | ||
ITW German Management LLC | Delaware | ||
ITW GH LLC | South Korea | ||
ITW Global Capital LLC | Delaware | ||
ITW Global Investments Holdings LLC | Delaware | ||
ITW Global Investments Inc. | Delaware | ||
ITW Global Investments LP | Delaware | ||
ITW Global Tire Repair Europe GmbH | Germany | ||
ITW Global Tire Repair Inc. | California | ||
ITW Global Tire Repair Japan K.K. | Japan | ||
ITW Graphics (Thailand) Ltd. | Thailand |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
ITW Graphics Asia Limited | Hong Kong | ||
ITW GRAPHICS ITALY S .R.L. IN LIQUIDAZIONE | Italy | ||
ITW Graphics Korea Co. Ltd. | South Korea | ||
ITW Great Britain Investment & Licensing Holding Company | Delaware | ||
ITW Group France (Luxembourg) S.àr.l. | Luxembourg | ||
ITW Hi-Cone Japan Limited | Japan | ||
ITW HLP Thailand Co. Ltd. | Thailand | ||
ITW Holding Quimica B.C., S.L., Sole Shareholder Company | Spain | ||
ITW Holdings Australia L.P. | Australia | ||
ITW Holdings I Limited | United Kingdom | ||
ITW Holdings II Limited | United Kingdom | ||
ITW Holdings III Limited | United Kingdom | ||
ITW Holdings IV Limited | United Kingdom | ||
ITW Holdings LP | United Kingdom | ||
ITW Holdings UK | United Kingdom | ||
ITW Holdings V Limited | United Kingdom | ||
ITW Holdings VI Limited | United Kingdom | ||
ITW Holdings VII Limited | United Kingdom | ||
ITW Hong Kong Limited | Hong Kong | ||
ITW Hungary Finance Alfa Kft | Hungary | ||
ITW Hungary Finance Beta Kft | Hungary | ||
ITW Hungary Finance Gamma KFT | Hungary | ||
ITW ILC Holdings I Inc. | Delaware | ||
ITW Imaden Industria e Comercio Ltda. | Brazil | ||
ITW India Private Limited | India | ||
ITW Industrial Components SrL | Italy | ||
ITW Industry B.V. | Netherlands | ||
ITW Insulation Systems FZE | United Arab Emirates | ||
ITW International Holdings LLC | Delaware | ||
ITW International Intellectual Property LLC | Delaware | ||
ITW Invest Holding GmbH | Germany | ||
ITW IPG Investments LLC | Delaware | ||
ITW Ireland | Ireland | ||
ITW Ireland Holdings | Ireland | ||
ITW Ispracontrols Bulgaria EOOD | Bulgaria | ||
ITW Italy Finance Srl | Italy | ||
ITW Italy Holding Srl | Italy | ||
ITW Japan Ltd. | Japan | ||
ITW Limited | United Kingdom | ||
ITW LLC & Co. KG | Germany | ||
ITW Lombard Holdings Inc. | Delaware | ||
ITW Lys Fusion S.r.l. | Italy | ||
ITW M FILMS I LLC | Delaware | ||
ITW M FILMS II LLC | Delaware | ||
ITW Marking & Coding (Shanghai) Co., Ltd. | China | ||
ITW Medical Group de Mexico S. de R.L. de C.V. | Mexico | ||
ITW Meritex Sdn. Bhd. | Malaysia | ||
ITW Metal Fasteners, S.L. | Spain | ||
ITW Metalflex D.o.o. | Slovenia | ||
ITW Mexico Holding Company S. De R.L. de C.V. | Mexico | ||
ITW Mexico Holdings LLC | Delaware | ||
ITW MH LLC | Delaware | ||
ITW Morlock GmbH | Germany | ||
ITW Mortgage Investments I, Inc. | Delaware | ||
ITW Mortgage Investments II, Inc. | Delaware |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
ITW Mortgage Investments III, Inc. | Delaware | ||
ITW Mortgage Investments IV, Inc. | Delaware | ||
ITW Netherlands Finance Alpha BV | Netherlands | ||
ITW New Zealand | New Zealand | ||
ITW Novadan Sp. Z.o.o. | Poland | ||
ITW Participacoes Ltda. | Brazil | ||
ITW Participations S.à r.l. | Luxembourg | ||
ITW Pension Funds Trustee Company | United Kingdom | ||
ITW Performance Plastic (Shanghai) Co. Ltd. | China | ||
ITW Performance Polymers & Fluids Japan Co. Ltd. | Japan | ||
ITW Performance Polymers & Fluids Korea Limited | South Korea | ||
ITW Performance Polymers & Fluids OOO | Russia | ||
ITW Performance Polymers (Wujiang) Co., Ltd. | China | ||
ITW Performance Polymers and Fluids Group FZE | United Arab Emirates | ||
ITW Peru S.A.C. | Peru | ||
ITW Philippines Holdings LLC | Delaware | ||
ITW PMI Investments, Inc. | Delaware | ||
ITW Poly Mex, S. de R.L. de C.V. | Mexico | ||
ITW Polymers Sealants North America Inc. | Texas | ||
ITW PPF Brasil Adesivos Ltda. | Brazil | ||
ITW Pronovia s.r.o. | Czech Republic | ||
ITW Pte. Ltd. | Singapore | ||
ITW Real Estate Germany GmbH | Germany | ||
ITW Residuals III L.L.C. | Delaware | ||
ITW Residuals IV L.L.C. | Delaware | ||
ITW Rivex | France | ||
ITW Simco-Ion (Shenzhen) Co. Ltd. | China | ||
ITW Slovakia s.r.o. | Slovakia | ||
ITW SMPI | France | ||
ITW Spain Holdings, S.L. | Spain | ||
ITW Specialty Film, LLC | South Korea | ||
ITW Specialty Films France | France | ||
ITW Specialty Films Italy S.r.l. | Italy | ||
ITW Specialty Materials (Suzhou) Co., Ltd. | China | ||
ITW Speedline Equipment (Suzhou) Co. Ltd. | China | ||
ITW SPG México, S. de R.L. de C.V. | Mexico | ||
ITW Spraytec | France | ||
ITW Sverige AB | Sweden | ||
ITW Sweden Holding AB | Sweden | ||
ITW Temb (QUFU) Automotive Cooling Systems Co. Ltd. | China | ||
ITW Test & Measurement (China) Co., Ltd. | China | ||
ITW Test & Measurement Equipment (Shanghai) Co., Ltd | China | ||
ITW Test & Measurement GmbH | Germany | ||
ITW Test and Measurement Italia Srl | Italy | ||
ITW Test and Measurement Services Industry and Trade Ltd. | Turkey | ||
ITW Texwipe Philippines, Inc. | Philippines | ||
ITW Thermal Films (Shanghai) Co., Ltd. | China | ||
ITW UK | United Kingdom | ||
ITW UK Finance Beta Limited | United Kingdom | ||
ITW UK Finance Gamma Limited | United Kingdom | ||
ITW UK Finance Limited | United Kingdom | ||
ITW Universal II LLC | Delaware | ||
ITW Universal L.L.C. | Delaware | ||
ITW Welding | France | ||
ITW Welding GmbH | Germany |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
ITW Welding Products B.V. | Netherlands | ||
ITW Welding Products Group FZE | United Arab Emirates | ||
ITW Welding Products Group, S. DE R.L. De C.V. | Mexico | ||
ITW Welding Products Italy Srl | Italy | ||
ITW Welding Products Limited Liability Company | Russia | ||
ITW Welding Produtos Para Solgdagem Ltda. | Brazil | ||
ITW Welding Servicios Mexico, S. de R.L. de C.V. | Mexico | ||
ITW Welding Singapore Pte. Ltd. | Singapore | ||
KB Sektionen 1 | Sweden | ||
KCPL Mauritius Holdings | Mauritius | ||
Kester Asia Holdings, Inc. | Delaware | ||
Kester Components (M) Sdn. Bhd. | Malaysia | ||
Kester Components Private Limited | Singapore | ||
Kester GmbH | Germany | ||
Kester, Inc. | Delaware | ||
Kitazawa Sangyo Co., Ltd. | Japan | ||
Kleinmann GmbH | Germany | ||
Krafft Argentina, S.A. | Argentina | ||
Krafft, S.L. | Spain | ||
Lajota S.A. | Argentina | ||
Lock Inspection Systemes France Sarl | France | ||
Loma Systems (Canada) Inc. | Canada | ||
Loma Systems BV | Netherlands | ||
Loma Systems sro | Czech Republic | ||
Lombard Pressings Limited | United Kingdom | ||
LSPS Inc. | Delaware | ||
Lumex, Inc. | Illinois | ||
Luvex - Industria De Equipamentos De Protecao Ltda. | Brazil | ||
Lys Fusion Poland Sp. z.o.o. | Poland | ||
M&C Specialties (Shenzhen) Co. Ltd. | China | ||
M&C Specialties Bohai Converting M&C Co. | China | ||
M&C Specialties Co. | Pennsylvania | ||
Magna Industrial Co. Limited | Hong Kong | ||
MAGNAFLUX GmbH | Germany | ||
Manufacturing Avancee S.A. | Morocco | ||
Maquilas y Componentes Industriales, I S.A. de C.V. | Mexico | ||
Meritex Technology (Suzhou) Co. Ltd. | China | ||
Meurer Verpackungssysteme GmbH | Germany | ||
MGHG Property LLC | Delaware | ||
Miller Electric Mfg. Co. | Wisconsin | ||
Miller Insurance Ltd. | Bermuda | ||
NDT Holding LLC | Delaware | ||
Norden Olje AB | Sweden | ||
Norden Olje AS | Norway | ||
North Star Imaging Europe | France | ||
North Star Imaging, Inc. | Minnesota | ||
Nova Chimica, S.r.l. | Italy | ||
Novadan ApS | Denmark | ||
Noza Holdings Pty Ltd | Australia | ||
NSC Europe Limited | United Kingdom | ||
NuTrus LLC | Delaware | ||
Odesign, Inc. | Illinois | ||
Orbitalum Tools GmbH | Germany | ||
Pacific Concept Industries (USA) LLC | Delaware | ||
Pacific Concept Industries Limited (Enping) | China |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
Packaging Leasing Systems Inc. | Delaware | ||
Panreac Chimie, Sarl | France | ||
Panreac Quimica, S.L. | Spain | ||
Paslode Fasteners (Shanghai) Co., Ltd. | China | ||
Penta Dnepr LLC | Ukraine | ||
Penta Don OOO | Russia | ||
Penta Enisey OOO | Russia | ||
Penta Sever OOO | Russia | ||
Penta Sibir OOO | Russia | ||
Penta Ural OOO | Russia | ||
Penta Volga OOO | Russia | ||
PENTA-91 OOO | Russia | ||
PR. A. I. Srl | Italy | ||
Precise Biomedical, Incorporated | Ohio | ||
Premark FEG L.L.C. | Delaware | ||
Premark HII Holdings, Inc. | Ohio | ||
Premark International Holdings B.V. | Netherlands | ||
Premark International, LLC | Delaware | ||
Premark N.V. | Curacao | ||
Prolex, Sociedad Anónima | Costa Rica | ||
Prolim Comercio de Higiene e Limpeza Ltda. | Brazil | ||
Prolim Quimica Avancada Ltda. | Brazil | ||
Prolim Servicos e Manutencao Ltda. | Brazil | ||
Pryda (Malaysia) Sdn Bhd | Malaysia | ||
PT ITW Construction Products Indonesia | Indonesia | ||
PT Pryda Indonesia | Indonesia | ||
QSA Global, Inc. | Delaware | ||
Quimica Industrial Mediterranea, S.L. | Spain | ||
Quimica TF, S.A. de C.V. | Delaware | ||
Ramset Fasteners (Hong Kong) Ltd. | Hong Kong | ||
Rapid Cook LLC | Delaware | ||
S.E.E. Sistemas Industria E Comercio Ltda. | Brazil | ||
Salter India Private Limited | India | ||
Sarsfield Corporation N.V. | Curacao | ||
Sealant Systems International, Inc. | California | ||
Sentinel Asia Yuhan Hoesa | South Korea | ||
Shanghai ITW Plastic & Metal Co. Ltd | China | ||
Simco (Nederland) B.V. | Netherlands | ||
Simco Japan, Inc. | Japan | ||
Sn Investors, Inc. | Delaware | ||
SOCIETE DE PROSPECTION ET D'INVENTIONS TECHNIQUES - Spit | France | ||
Solutions Group Transaction Subsidiary Inc. | Delaware | ||
Speedline Holdings I, Inc. | Delaware | ||
Speedline Holdings I, LLC | Delaware | ||
Speedline Technologies GmbH | Germany | ||
Speedline Technologies Mexico Services, S. de R.L. de C.V. | Mexico | ||
Speedline Technologies Mexico, S. de R.L. de C.V. | Mexico | ||
ST Mexico Holdings LLC | Delaware | ||
Steelfast Asia Sdn Bhd | Malaysia | ||
Stokvis Celix Portugal Unipessoal LDA | Portugal | ||
Stokvis Danmark ApS | Denmark | ||
Stokvis Promi Czech s.r.o. | Czech Republic | ||
Stokvis Tape Group B.V. | Netherlands | ||
Stokvis Tapes (Beijing) Co. Ltd. | China | ||
Stokvis Tapes (Hong Kong) Co. Limited | Hong Kong |
Exhibit 21 | |||
Illinois Tool Works Inc. | |||
Subsidiaries | |||
Subsidiary Name | Primary Jurisdiction |
Stokvis Tapes (Shanghai) Co. Ltd. | China | ||
Stokvis Tapes (Shenzhen) Co. Ltd. | China | ||
Stokvis Tapes (Taiwan) Co. Ltd. | Taiwan | ||
Stokvis Tapes (Tianjin) Co. Ltd. | China | ||
Stokvis Tapes Benelux B.V. | Netherlands | ||
Stokvis Tapes BVBA | Belgium | ||
Stokvis Tapes Deutschland GmbH | Germany | ||
Stokvis Tapes France | France | ||
Stokvis Tapes Italia s.r.l. | Italy | ||
Stokvis Tapes Limited Liability Company | Russia | ||
Stokvis Tapes Norge AS | Norway | ||
Stokvis Tapes Oy | Finland | ||
Stokvis Tapes Polska Sp Z.O.O. | Poland | ||
Stokvis Tapes Sverige AB | Sweden | ||
Sweldx AB | Sweden | ||
Tarutin Kester Co., Ltd. | Japan | ||
Technopack Industria, Comercio, Consultoria e Representacoes Ltda. | Brazil | ||
Teknek (China) Limited | Scotland | ||
Teknek (Japan) Limited | Scotland | ||
Teksaleco Ltd. | Scotland | ||
Ten Plus | France | ||
The Loveshaw Corporation | Delaware | ||
The Three Russells, Sociedad Anónima | Costa Rica | ||
Thirode Grandes Cuisines Poligny | France | ||
Tien Tai Electrode (Kunshan) Co., Ltd. | China | ||
Tien Tai Electrode (Qingdao) Co., Ltd. | China | ||
Tien Tai Electrode Co., Ltd. | Taiwan | ||
Tranosliw International Inc. | Delaware | ||
Troy Investments I LLC | Delaware | ||
Unichemicals Industria e Comercio Ltda. | Brazil | ||
US Finance Gamma LLC | Delaware | ||
Valeron Strength Films B.V.B.A. | Belgium | ||
Veneta Decalcogomme S.r.l. | Italy | ||
Versachem Chile S.A. | Chile | ||
Vesta (Guangzhou) Catering Equipment Co. Ltd | China | ||
Vesta Global Limited | Hong Kong | ||
Vitronics Soltec B.V. | Netherlands | ||
VR-Leasing Sarita GmbH & Co. Immobilien KG | Germany | ||
VS Acquisition Holding Co. | Delaware | ||
VS European Holdco BV | Netherlands | ||
VS Holding Co. | Delaware | ||
Wachs Canada Ltd. | Canada | ||
Wachs Subsea LLC | Illinois | ||
Warehouse Automation Iberia, S.L. | Spain | ||
Weigh-Tronix Canada, ULC | Canada | ||
Weigh-Tronix UK Limited | United Kingdom | ||
Wilsonart International Holdings LLC | Delaware | ||
Wynn Oil (South Africa) (Pty) Ltd. | South Africa | ||
Wynn's Automotive France | France | ||
Wynn's Belgium BVBA | Belgium | ||
Wynn's Italia Srl | Italy | ||
Wynn's Mekuba India Pvt Ltd | India | ||
Zip-Pak International B.V. | Netherlands |
/s/ Daniel J. Brutto | |
Daniel J. Brutto | |
/s/ Susan Crown | |
Susan Crown | |
/s/ James W. Griffith | |
James W. Griffith | |
/s/ Jay L. Henderson | |
Jay L. Henderson | |
/s/ Richard H. Lenny | |
Richard H. Lenny | |
/s/ Robert S. Morrison | |
Robert S. Morrison | |
/s/ James A. Skinner | |
James A. Skinner | |
/s/ David B. Smith, Jr. | |
David B. Smith, Jr. | |
/s/ Pamela B. Strobel | |
Pamela B. Strobel | |
/s/ Kevin M. Warren | |
Kevin M. Warren | |
/s/ Anré D. Williams | |
Anré D. Williams | |
1 | I have reviewed this report on Form 10-K of Illinois Tool Works Inc.; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: February 10, 2017 | /s/ E. Scott Santi | |
E. Scott Santi | ||
Chairman & Chief Executive Officer |
1. | I have reviewed this report on Form 10-K of Illinois Tool Works Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: February 10, 2017 | /s/ Michael M. Larsen | |
Michael M. Larsen | ||
Senior Vice President & Chief Financial Officer |
Dated: February 10, 2017 | /s/ E. Scott Santi | |
E. Scott Santi | ||
Chairman & Chief Executive Officer |
Dated: February 10, 2017 | /s/ Michael M. Larsen | |
Michael M. Larsen | ||
Senior Vice President & Chief Financial Officer |
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