(Mark One) | |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Or | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to | |
Commission file number 1-37654 |
Delaware | 47-5654583 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification number) | |
6920 Seaway Blvd Everett, WA | 98203 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer x | Accelerated filer ¨ | |||
Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
Emerging growth company ¨ |
PART I - | FINANCIAL INFORMATION | Page |
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II - | OTHER INFORMATION | |
Item 1A. | ||
Item 2. | ||
Item 6. | ||
As of | |||||||
March 29, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and equivalents | $ | $ | |||||
Accounts receivable, net | |||||||
Inventories: | |||||||
Finished goods | |||||||
Work in process | |||||||
Raw materials | |||||||
Total inventories | |||||||
Prepaid expenses and other current assets | |||||||
Current assets, discontinued operations | |||||||
Total current assets | |||||||
Property, plant and equipment, net of accumulated depreciation of $797.7 and $889.8 at March 29, 2019 and December 31, 2018, respectively | |||||||
Operating lease right-of-use assets | |||||||
Other assets | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | $ | |||||
Trade accounts payable | |||||||
Current operating lease liabilities | |||||||
Accrued expenses and other current liabilities | |||||||
Current liabilities, discontinued operations | |||||||
Total current liabilities | |||||||
Operating lease liabilities | |||||||
Other long-term liabilities | |||||||
Long-term debt | |||||||
Equity: | |||||||
5.0% Mandatory convertible preferred stock, series A: $0.01 par value, 15.0 million shares authorized; 1.4 million shares issued and outstanding at March 29, 2019 and December 31, 2018 | |||||||
Common stock: $0.01 par value, 2.0 billion shares authorized; 335.8 and 335.1 million issued; 335.0 and 334.5 million outstanding at March 29, 2019 and December 31, 2018, respectively | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive income (loss) | ( | ) | ( | ) | |||
Total Fortive stockholders’ equity | |||||||
Noncontrolling interests | |||||||
Total stockholders’ equity | |||||||
Total liabilities and equity | $ | $ |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Sales of products | $ | $ | |||||
Sales of services | |||||||
Total sales | |||||||
Cost of product sales | ( | ) | ( | ) | |||
Cost of service sales | ( | ) | ( | ) | |||
Total cost of sales | ( | ) | ( | ) | |||
Gross profit | |||||||
Operating costs: | |||||||
Selling, general and administrative expenses | ( | ) | ( | ) | |||
Research and development expenses | ( | ) | ( | ) | |||
Operating profit | |||||||
Non-operating expenses, net: | |||||||
Interest expense, net | ( | ) | ( | ) | |||
Other non-operating income (expenses), net | ( | ) | |||||
Earnings from continuing operations before income taxes | |||||||
Income taxes | ( | ) | ( | ) | |||
Net earnings from continuing operations | |||||||
Earnings from discontinued operations, net of income taxes | |||||||
Net earnings | |||||||
Mandatory convertible preferred dividends | ( | ) | |||||
Net earnings attributable to common stockholders | $ | $ | |||||
Net earnings per common share from continuing operations: | |||||||
Basic | $ | $ | |||||
Diluted | $ | $ | |||||
Net earnings per share from discontinued operations: | |||||||
Basic | $ | $ | |||||
Diluted | $ | $ | |||||
Net earnings per share: | |||||||
Basic | $ | $ | |||||
Diluted | $ | $ | |||||
Average common stock and common equivalent shares outstanding: | |||||||
Basic | |||||||
Diluted | |||||||
The sum of net earnings per share may not add due to rounding |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Net earnings | $ | $ | |||||
Other comprehensive income, net of income taxes: | |||||||
Foreign currency translation adjustments | |||||||
Pension adjustments | |||||||
Total other comprehensive income, net of income taxes | |||||||
Comprehensive income | $ | $ |
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance, December 31, 2018 | $ | — | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
Net earnings for the period | — | — | — | — | — | — | — | |||||||||||||||||||||
Dividends to common shareholders | — | — | — | — | — | ( | ) | — | — | |||||||||||||||||||
Mandatory convertible preferred stock cumulative dividends | — | — | — | — | — | ( | ) | — | — | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | |||||||||||||||||||||
Common stock-based award activity | — | — | — | — | — | |||||||||||||||||||||||
Issuance of 0.875% senior convertible notes due 2022 | — | — | — | — | — | — | — | |||||||||||||||||||||
Change in noncontrolling interests | — | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Balance, March 29, 2019 | $ | — | $ | $ | $ | ( | ) | $ |
Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||
Balance, December 31, 2017 | $ | — | $ | — | $ | $ | $ | ( | ) | $ | |||||||||||||||||||
Adoption of accounting standards | — | — | — | — | — | ( | ) | — | — | ||||||||||||||||||||
Balance, January 1, 2018 | $ | — | — | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
Net earnings for the period | — | — | — | — | — | — | — | ||||||||||||||||||||||
Dividends to common shareholders | — | — | — | — | — | ( | ) | — | — | ||||||||||||||||||||
Separation related adjustments | — | — | — | — | — | — | — | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||
Common stock-based award activity | — | — | — | — | — | — | |||||||||||||||||||||||
Change in noncontrolling interests | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||
Balance, March 30, 2018 | $ | — | — | $ | $ | $ | $ |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Cash flows from operating activities: | |||||||
Net earnings from continuing operations | $ | $ | |||||
Noncash items: | |||||||
Depreciation | |||||||
Amortization | |||||||
Stock-based compensation expense | |||||||
Change in trade accounts receivable, net | ( | ) | |||||
Change in inventories | ( | ) | ( | ) | |||
Change in trade accounts payable | ( | ) | ( | ) | |||
Change in prepaid expenses and other assets | ( | ) | ( | ) | |||
Change in accrued expenses and other liabilities | ( | ) | ( | ) | |||
Total operating cash provided by continuing operations | |||||||
Total operating cash provided by (used in) discontinued operations | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Cash paid for acquisitions, net of cash received | ( | ) | |||||
Payments for additions to property, plant and equipment | ( | ) | ( | ) | |||
All other investing activities | |||||||
Total investing cash used in continuing operations | ( | ) | ( | ) | |||
Total investing cash used in discontinued operations | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Net proceeds from (repayments of) commercial paper borrowings | ( | ) | |||||
Proceeds from borrowings (maturities greater than 90 days), net of $24.3 million of issuance costs | |||||||
Repayment of borrowings (maturities greater than 90 days) | ( | ) | |||||
Payment of common stock cash dividend to shareholders | ( | ) | ( | ) | |||
Payment of mandatory convertible preferred stock cash dividend to shareholders | ( | ) | |||||
All other financing activities | ( | ) | |||||
Total financing cash provided by (used in) continuing operations | ( | ) | |||||
Total financing cash provided by (used in) discontinued operations | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Effect of exchange rate changes on cash and equivalents | |||||||
Net change in cash and equivalents | |||||||
Beginning balance of cash and equivalents | |||||||
Ending balance of cash and equivalents | $ | $ |
Foreign currency translation adjustments | Pension adjustments (b) | Total | |||||||||
For the Three Months Ended March 29, 2019: | |||||||||||
Balance, December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive income (loss) before reclassifications, net of income taxes | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | |||||||||||
Increase (decrease) | (a) | ||||||||||
Income tax impact | ( | ) | (c) | ( | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | |||||||||||
Net current period other comprehensive income (loss), net of income taxes | |||||||||||
Balance, March 29, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
For the Three Months Ended March 30, 2018: | |||||||||||
Balance, December 31, 2017 | $ | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive income (loss) before reclassifications, net of income taxes | |||||||||||
Amounts reclassified from accumulated other comprehensive income (loss): | |||||||||||
Increase (decrease) | (a) | ||||||||||
Income tax impact | ( | ) | (c) | ( | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | |||||||||||
Net current period other comprehensive income (loss), net of income taxes | |||||||||||
Balance, March 30, 2018 | $ | $ | ( | ) | $ | ||||||
(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 9 for additional details). | |||||||||||
(b) Includes balances relating to defined benefit plans, supplemental executive retirement plans and other postretirement employee benefit plans. | |||||||||||
(c) We did not elect to reclassify the income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. |
March 29, 2019 | March 30, 2018 | ||||||
Sales | $ | $ | |||||
Cost of sales | ( | ) | ( | ) | |||
Selling, general and administrative expenses | ( | ) | |||||
Research and development expenses | ( | ) | |||||
Gain on disposition of discontinued operations before income taxes | |||||||
Interest expense and other | ( | ) | |||||
Earnings before income taxes | |||||||
Income taxes | ( | ) | |||||
Net earnings | $ | $ |
March 29, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Trade accounts receivable, net | $ | $ | |||||
Inventories | |||||||
Other current assets | |||||||
Total current assets, discontinued operations | $ | $ | |||||
LIABILITIES | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | $ | |||||
Accrued expenses and other current liabilities | |||||||
Total current liabilities, discontinued operations | $ | $ |
Balance, December 31, 2018 | $ | ||
Foreign currency translation & other | |||
Balance, March 29, 2019 | $ |
March 29, 2019 | December 31, 2018 | ||||||
Professional Instrumentation | $ | $ | |||||
Industrial Technologies | |||||||
Total goodwill | $ | $ |
• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. |
• | Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. |
• | Level 3 inputs are unobservable inputs based on our assumptions. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. |
Quoted Prices in Active Market (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
March 29, 2019 | |||||||||||||||
Deferred compensation liabilities | $ | $ | $ | $ | |||||||||||
December 31, 2018 | |||||||||||||||
Deferred compensation liabilities | $ | $ | $ | $ |
March 29, 2019 | December 31, 2018 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Current portion of long-term debt | $ | $ | $ | $ | |||||||||||
Long-term debt, net of current maturities | $ | $ | $ | $ |
March 29, 2019 | December 31, 2018 | ||||||
U.S. dollar-denominated commercial paper | $ | $ | |||||
Euro-denominated commercial paper | |||||||
Delayed-draw term loan due 2019 | |||||||
Delayed-draw term loan due 2020 | |||||||
Yen variable interest rate term loan due 2022 | |||||||
1.80% senior unsecured notes due 2019 | |||||||
2.35% senior unsecured notes due 2021 | |||||||
3.15% senior unsecured notes due 2026 | |||||||
4.30% senior unsecured notes due 2046 | |||||||
0.875% senior convertible notes due 2022 | |||||||
Other | |||||||
Long-term debt | |||||||
Less: current portion of long-term debt | |||||||
Long-term debt, net of current maturities | $ | $ |
Carrying value | Annual effective rate | Weighted average remaining maturity (in days) | ||||||
U.S. dollar-denominated commercial paper | $ | % | ||||||
Euro-denominated commercial paper | $ | ( | )% |
Remainder of 2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
Total lease payments | ||||
Less: imputed interest | ( | ) | ||
Total lease liabilities | $ |
2019 | $ | |||
2020 | ||||
2021 | ||||
2022 | ||||
2023 | ||||
Thereafter | ||||
Total lease payments | $ |
March 29, 2019 | December 31, 2018 | ||||||
Deferred revenue - current | $ | $ | |||||
Deferred revenue - noncurrent | |||||||
Total contract liabilities | $ | $ |
March 29, 2019 | |||
Professional Instrumentation | $ | ||
Industrial Technologies | |||
Total remaining performance obligations | $ |
Total | Professional Instrumentation | Industrial Technologies | |||||||||
Sales: | |||||||||||
Sales of products | $ | $ | $ | ||||||||
Sales of services | |||||||||||
Total | $ | $ | $ | ||||||||
Geographic: | |||||||||||
United States | $ | $ | $ | ||||||||
China | |||||||||||
Germany | |||||||||||
All other (each country individually less than 5% of total sales) | |||||||||||
Total | $ | $ | $ | ||||||||
Major Products Group: | |||||||||||
Professional tools and equipment | $ | $ | $ | ||||||||
Industrial automation, controls and sensors | |||||||||||
Franchise distribution | |||||||||||
All other | |||||||||||
Total | $ | $ | $ | ||||||||
End markets: | |||||||||||
Direct sales: | |||||||||||
Retail fueling (a) | $ | $ | $ | ||||||||
Industrial & Manufacturing | |||||||||||
Vehicle repair (a) | |||||||||||
Utilities & Power | |||||||||||
Other | |||||||||||
Total direct sales | |||||||||||
Distributors(a) | |||||||||||
Total | $ | $ | $ | ||||||||
(a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the three months ended March 29, 2019 was $745.2 million. |
Total | Professional Instrumentation | Industrial Technologies | |||||||||
Sales: | |||||||||||
Sales of products | $ | $ | $ | ||||||||
Sales of services | |||||||||||
Total | $ | $ | $ | ||||||||
Geographic: | |||||||||||
United States | $ | $ | $ | ||||||||
China | |||||||||||
Germany | |||||||||||
All other (each country individually less than 5% of total sales) | |||||||||||
Total | $ | $ | $ | ||||||||
Major Products Group: | |||||||||||
Professional tools and equipment | $ | $ | $ | ||||||||
Industrial automation, controls and sensors | |||||||||||
Franchise distribution | |||||||||||
All other | |||||||||||
Total | $ | $ | $ | ||||||||
End markets: | |||||||||||
Direct sales: | |||||||||||
Retail fueling (a) | $ | $ | $ | ||||||||
Industrial & Manufacturing | |||||||||||
Vehicle repair (a) | |||||||||||
Utilities & Power | |||||||||||
Other | |||||||||||
Total direct sales | |||||||||||
Distributors(a) | |||||||||||
Total | $ | $ | $ | ||||||||
(a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the three months ended March 30, 2018 was $728.1 million. |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
U.S. Pension Benefits: | |||||||
Interest cost | $ | $ | |||||
Expected return on plan assets | ( | ) | ( | ) | |||
Net periodic pension cost | $ | $ | ( | ) | |||
Non-U.S. Pension Benefits: | |||||||
Service cost | $ | $ | |||||
Interest cost | |||||||
Expected return on plan assets | ( | ) | ( | ) | |||
Amortization of net loss | |||||||
Net curtailment and settlement loss recognized | |||||||
Net periodic pension cost | $ | $ |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Stock Awards: | |||||||
Pretax compensation expense | $ | $ | |||||
Income tax benefit | ( | ) | ( | ) | |||
Stock Award expense, net of income taxes | |||||||
Stock options: | |||||||
Pretax compensation expense | |||||||
Income tax benefit | ( | ) | ( | ) | |||
Stock option expense, net of income taxes | |||||||
Total stock-based compensation: | |||||||
Pretax compensation expense | |||||||
Income tax benefit | ( | ) | ( | ) | |||
Total stock-based compensation expense, net of income taxes | $ | $ |
Stock Awards | $ | ||
Stock options | |||
Total unrecognized compensation cost | $ |
Balance, December 31, 2018 | $ | ||
Accruals for warranties issued during the period | |||
Settlements made | ( | ) | |
Effect of foreign currency translation | |||
Balance, March 29, 2019 | $ |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Numerator | |||||||
Net earnings from continuing operations | $ | $ | |||||
Mandatory convertible preferred stock cumulative dividends | ( | ) | |||||
Net earnings attributable to common stockholders from continuing operations | $ | $ | |||||
Denominator | |||||||
Weighted average common shares outstanding used in basic earnings per share | |||||||
Incremental common shares from: | |||||||
Assumed exercise of dilutive options and vesting of dilutive Stock Awards | |||||||
Weighted average common shares outstanding used in diluted earnings per share | |||||||
Net earnings from continuing operations per common share - Basic | $ | $ | |||||
Net earnings from continuing operations per common share - Diluted | $ | $ |
Dividend Per Common Share | Amount ($ in millions) | Dividend per MCPS | Amount ($ in millions) | ||||||||||||
2019: | |||||||||||||||
First quarter | $ | $ | $ | $ | |||||||||||
2018: | |||||||||||||||
First quarter | $ | $ | $ | $ |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Sales: | |||||||
Professional Instrumentation | $ | $ | |||||
Industrial Technologies | |||||||
Total | $ | $ | |||||
Operating Profit: | |||||||
Professional Instrumentation | $ | $ | |||||
Industrial Technologies | |||||||
Other | ( | ) | ( | ) | |||
Total Operating Profit | |||||||
Interest expense, net | ( | ) | ( | ) | |||
Other non-operating income (expenses), net | ( | ) | |||||
Earnings from continuing operations before income taxes | $ | $ |
• | Information Relating to Forward-Looking Statements |
• | Overview |
• | Results of Operations |
• | Liquidity and Capital Resources |
• | Critical Accounting Estimates |
• | Conditions in the global economy, the markets we serve and the financial markets may adversely affect our business and financial statements. |
• | Our growth could suffer if the markets into which we sell our products, software and services decline, do not grow as anticipated or experience cyclicality. |
• | We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services. |
• | Changes in industry standards and governmental regulations may reduce demand for our products or services or increase our expenses. |
• | Trade relations between China and the United States could have a material adverse effect on our business and financial statements. |
• | Any inability to consummate acquisitions at our anticipated rate and at appropriate prices could negatively impact our growth rate and stock price. |
• | Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation. |
• | Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners. |
• | Our acquisition of businesses, joint ventures and strategic relationships could negatively impact our financial statements. |
• | The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities. |
• | Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements. |
• | Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our reputation and financial statements. |
• | Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and reputation. |
• | International economic, political, legal, compliance and business factors could negatively affect our business and financial statements. |
• | We may be required to recognize impairment charges for our goodwill and other intangible assets. |
• | Foreign currency exchange rates may adversely affect our financial statements. |
• | Changes in our effective tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods. |
• | We have incurred a significant amount of debt, and our debt will increase further if we incur additional debt and do not retire existing debt. |
• | We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our financial statements. |
• | If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights. |
• | Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services. |
• | A significant disruption in, or breach in security of, our information technology systems could adversely affect our business. |
• | Defects and unanticipated use or inadequate disclosure with respect to our products (including software) or services could adversely affect our business, reputation and financial statements. |
• | Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements. |
• | Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations. |
• | If we cannot adjust our manufacturing capacity or the purchases required for our manufacturing activities to reflect changes in market conditions and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies. |
• | Our restructuring actions could have long-term adverse effects on our business. |
• | Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations. |
• | If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed. |
• | Certain provisions in our amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock. |
• | Changes in U.S. GAAP could adversely affect our reported financial results and may require significant changes to our internal accounting systems and processes. |
• | Our amended and restated certificate of incorporation designates the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against us and our directors and officers. |
• | Certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Danaher. |
• | Potential liabilities may arise due to fraudulent transfer considerations, which would adversely affect our financial condition and our results of operations. |
% Change Three Months Ended March 29, 2019 vs. Comparable 2018 Period | ||
Total revenue growth (GAAP) | 6.7 | % |
Existing businesses (Non-GAAP) | 3.7 | % |
Acquisitions (Non-GAAP) | 5.8 | % |
Currency exchange rates (Non-GAAP) | (2.8 | )% |
• | Higher 2019 sales volumes from existing businesses, price increases, incremental year-over-year cost savings associated with restructuring and productivity improvement initiatives which were more than offset by unfavorable sales mix, increased material costs associated primarily with inflationary pressures and recently enacted tariffs, and changes in foreign currency exchange rates — 70 basis points |
• | The incremental year-over-year net dilutive effect of acquired businesses — 240 basis points |
• | The incremental year-over-year net dilutive effect of acquisition and divestiture-related transaction costs — 190 basis points |
Three Months Ended | |||||||
March 29, 2019 | March 30, 2018 | ||||||
Professional Instrumentation | $ | 947.3 | $ | 871.7 | |||
Industrial Technologies | 645.6 | 620.5 | |||||
Total | $ | 1,592.9 | $ | 1,492.2 |
Three Months Ended | |||||||
($ in millions) | March 29, 2019 | March 30, 2018 | |||||
Sales | $ | 947.3 | $ | 871.7 | |||
Operating profit | 136.2 | 206.4 | |||||
Depreciation | 16.2 | 17.0 | |||||
Amortization | 44.1 | 17.2 | |||||
Operating profit as a % of sales | 14.4 | % | 23.7 | % | |||
Depreciation as a % of sales | 1.7 | % | 2.0 | % | |||
Amortization as a % of sales | 4.7 | % | 2.0 | % |
% Change Three Months Ended March 29, 2019 vs. Comparable 2018 Period | ||
Total revenue growth (GAAP) | 8.7 | % |
Existing businesses (Non-GAAP) | 1.8 | % |
Acquisitions (Non-GAAP) | 9.5 | % |
Currency exchange rates (Non-GAAP) | (2.6 | )% |
• | Higher 2019 sales volumes from existing businesses, price increases and incremental year-over-year cost savings associated with restructuring and productivity improvement initiatives that were more than offset by incremental year-over-year costs associated with various product development investments, unfavorable sales mix, increased material costs associated primarily with inflationary pressures and recently enacted tariffs, and changes in currency exchange rates — 190 basis points |
• | The incremental year-over-year net dilutive effect of acquired businesses, including amortization and acquisition-related fair value adjustments to deferred revenue — 410 basis points |
• | Acquisition-related transaction costs, including costs related to our acquisition of ASP, and acquisition-related restructuring — 330 basis points |
Three Months Ended | |||||||
($ in millions) | March 29, 2019 | March 30, 2018 | |||||
Sales | $ | 645.6 | $ | 620.5 | |||
Operating profit | 105.3 | 94.2 | |||||
Depreciation | 13.1 | 12.4 | |||||
Amortization | 8.1 | 7.7 | |||||
Operating profit as a % of sales | 16.3 | % | 15.2 | % | |||
Depreciation as a % of sales | 2.0 | % | 2.0 | % | |||
Amortization as a % of sales | 1.3 | % | 1.2 | % |
% Change Three Months Ended March 29, 2019 vs. Comparable 2018 Period | ||
Total revenue growth (GAAP) | 4.0 | % |
Existing businesses (Non-GAAP) | 6.4 | % |
Acquisitions (Non-GAAP) | 0.8 | % |
Currency exchange rates (Non-GAAP) | (3.2 | )% |
• | Higher 2019 sales volumes from existing businesses, price increases and incremental year-over-year cost savings associated with restructuring and productivity improvement initiatives that were partially offset by changes in foreign currency exchange rates — 130 basis points |
• | The incremental year-over-year net dilutive effect of acquired businesses — 20 basis points |
Three Months Ended | |||||||
($ in millions) | March 29, 2019 | March 30, 2018 | |||||
Sales | $ | 1,592.9 | $ | 1,492.2 | |||
Cost of sales | (780.2 | ) | (725.9 | ) | |||
Gross profit | $ | 812.7 | $ | 766.3 | |||
Gross profit margin | 51.0 | % | 51.4 | % |
Three Months Ended | |||||||
($ in millions) | March 29, 2019 | March 30, 2018 | |||||
Sales | $ | 1,592.9 | $ | 1,492.2 | |||
Selling, general and administrative (“SG&A”) expenses | 486.4 | 388.5 | |||||
Research and development (“R&D”) expenses | 109.0 | 99.9 | |||||
SG&A as a % of sales | 30.5 | % | 26.0 | % | |||
R&D as a % of sales | 6.8 | % | 6.7 | % |
Three Months Ended | |||||||
($ in millions) | March 29, 2019 | March 30, 2018 | |||||
Total operating cash provided by continuing operations | $ | 161.2 | $ | 130.8 | |||
Cash paid for acquisitions, net of cash received | $ | — | $ | (7.7 | ) | ||
Payments for additions to property, plant and equipment | (24.0 | ) | (25.9 | ) | |||
All other investing activities | — | 0.1 | |||||
Total investing cash used in continuing operations | $ | (24.0 | ) | $ | (33.5 | ) | |
Net proceeds from (repayments of) commercial paper borrowings | $ | 443.8 | $ | (74.2 | ) | ||
Proceeds from borrowings (maturities greater than 90 days), net of $24.3 million of issuance costs | 2,417.8 | — | |||||
Repayment of borrowings (greater than 90 days) | (402.9 | ) | — | ||||
Payment of common stock cash dividend to shareholders | (23.4 | ) | (24.3 | ) | |||
Payment of mandatory convertible preferred stock cash dividend to shareholders | (17.3 | ) | — | ||||
All other financing activities | (6.8 | ) | 4.4 | ||||
Total financing cash provided by (used in) financing activities from continuing operations | $ | 2,411.2 | $ | (94.1 | ) |
• | 2019 operating cash flows were impacted by lower net earnings for the first three months of 2019 as compared to the comparable period in 2018. Net earnings for the three months ended March 29, 2019 were impacted by a year-over-year decrease in operating profits of $60.6 million and an increase in net interest expense of $2.0 million associated with our financing activities. The year-over-year decrease in operating profit includes costs associated with the stand-up of the ASP acquisition and a net year-over-year increase in depreciation and amortization expenses of $26.0 million largely attributable to recently acquired businesses. Depreciation and amortization are noncash expenses that decrease earnings without a corresponding impact to operating cash flows. |
• | The aggregate of accounts receivable, inventories and trade accounts payable used $24.0 million of cash during the first three months of 2019 compared to using $62.2 million of cash in the comparable period of 2018. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventories and trade accounts payable depends upon how effectively we manage the cash conversion cycle, which effectively represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers, and can be significantly impacted by the timing of collections and payments in a period. |
• | The aggregate of prepaid expenses and other assets and accrued expenses and other liabilities used $73.6 million of cash during the first three months of 2019 as compared to using $87.9 million of cash in the comparable period of 2018. The timing of various employee benefit accruals drove the majority of this change. |
Period | Total number of shares (or units) purchased (1) | Average price paid per share (or unit) (1) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs | ||||||
January 1 - January 31 | — | — | N/A | N/A | ||||||
February 1 - February 28 | 25,146 | $ | 81.54 | N/A | N/A | |||||
March 1 - March 29 | — | — | N/A | N/A | ||||||
Total | 25,146 | $ | 81.54 | N/A | N/A | |||||
(1) In connection with the separation of the Company from Danaher Corporation (“Danaher”), Performance Stock Units issued by Danaher on February 24, 2015 to James A. Lico and Performance-Based Restricted Stock Units issued by Danaher on February 24, 2016 to Martin Gafinowitz and Barbara Hulit that remained unvested as of July 2, 2016 were canceled and replaced with Performance Stock Awards (“PSAs”) of the Company. In accordance with the terms of the Company’s 2016 Stock Incentive Plan, the Company withheld 25,146 shares of the Company’s common stock based on the corresponding closing price to offset tax withholding obligations that arose upon vesting of the PSAs. |
Exhibit Number | Description | |
3.1 | ||
3.2 | ||
3.3 | ||
4.1 | ||
4.2 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document* - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema Document* | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
* | Exhibit 101 to this report includes the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of March 29, 2019 and December 31, 2018, (ii) Consolidated Condensed Statements of Earnings for the three months ended March 29, 2019 and March 30, 2018, (iii) Consolidated Condensed Statements of Comprehensive Income for the three months ended March 29, 2019 and March 30, 2018, (iv) Consolidated Condensed Statement of Changes in Equity for the three months ended March 29, 2019 and March 30, 2018, (v) Consolidated Condensed Statements of Cash Flows for the three months ended March 29, 2019 and March 30, 2018, and (vi) Notes to Consolidated Condensed Financial Statements. |
FORTIVE CORPORATION: | ||
Date: April 25, 2019 | By: | /s/ Charles E. McLaughlin |
Charles E. McLaughlin | ||
Senior Vice President and Chief Financial Officer | ||
Date: April 25, 2019 | By: | /s/ Emily A. Weaver |
Emily A. Weaver | ||
Chief Accounting Officer | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of Fortive Corporation; |
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 an 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. |
Date: | April 25, 2019 | By: | /s/ James A. Lico |
James A. Lico | |||
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Fortive Corporation; |
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 an 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. |
Date: | April 25, 2019 | By: | /s/ Charles E. McLaughlin |
Charles E. McLaughlin | |||
Senior Vice President and Chief Financial Officer |
Date: | April 25, 2019 | By: | /s/ James A. Lico |
James A. Lico | |||
President and Chief Executive Officer |
Date: | April 25, 2019 | By: | /s/ Charles E. McLaughlin |
Charles E. McLaughlin | |||
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Apr. 18, 2019 |
|
Document and Entity Information [Abstract] | ||
Document type | 10-Q | |
Amendment flag | false | |
Document period end date | Mar. 29, 2019 | |
Document fiscal year focus | 2019 | |
Document fiscal period focus | Q1 | |
Trading symbol | FTV | |
Entity registrant name | Fortive Corporation | |
Entity small business | false | |
Entity emerging growth company | false | |
Entity central index key | 0001659166 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Large Accelerated Filer | |
Entity common stock, shares outstanding | 335,099,399 |
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
Dec. 31, 2018 |
|
Statement of Financial Position [Abstract] | |||
Accumulated depreciation | $ 797.7 | $ 889.8 | |
Preferred Stock, Dividend Rate, Percentage | 5.00% | 5.00% | |
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock authorized (in shares) | 15,000,000 | 15,000,000 | |
Preferred stock issued (in shares) | 1,400,000 | 0 | |
Preferred stock outstanding (in shares) | 1,400,000 | 0 | |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock authorized (in shares) | 2,000,000,000 | 2,000,000,000 | |
Common stock issued (in shares) | 335,800,000 | 335,100,000 | |
Common stock outstanding (in shares) | 335,000,000 | 334,500,000 |
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 164.4 | $ 261.2 |
Other comprehensive income, net of income taxes: | ||
Foreign currency translation adjustments | 16.7 | 36.4 |
Pension adjustments | 0.5 | 0.7 |
Total other comprehensive income, net of income taxes | 17.2 | 37.1 |
Comprehensive income | $ 181.6 | $ 298.3 |
Consolidated Condensed Statements of Changes in Equity (Parenthetical) |
Mar. 29, 2019 |
Feb. 22, 2019 |
---|---|---|
0.875% senior convertible notes due 2022 | Convertible Debt | ||
Interest rate, stated percentage | 0.875% | 0.875% |
Consolidated Condensed Statements of Cash Flows (Parenthetical) $ in Millions |
3 Months Ended |
---|---|
Mar. 29, 2019
USD ($)
| |
Parenthetical [Abstract] | |
Payments of debt issuance costs | $ 24.3 |
Business Overview |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Overview | NOTE 1. BUSINESS OVERVIEW Fortive Corporation (“Fortive”, the “Company,” “we,” “us,” or “our”) is a diversified industrial technology growth company encompassing businesses that are recognized leaders in attractive markets. Our well-known brands hold leading positions in advanced instrumentation and solutions, sensing, transportation technology, and franchise distribution markets. Our businesses design, develop, service, manufacture and market professional and engineered products, software and services for a variety of end markets, building upon leading brand names, innovative technology and significant market positions. We prepared the unaudited consolidated condensed financial statements included herein in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) applicable for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, we believe the disclosures are adequate to make the information presented not misleading. The consolidated condensed financial statements included herein should be read in conjunction with the audited annual consolidated financial statements as of and for the year ended December 31, 2018 and the footnotes (“Notes”) thereto included within our 2018 Annual Report on Form 10-K. In our opinion, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to fairly present our financial position as of March 29, 2019 and December 31, 2018, and our results of operations and cash flows for the three months ended March 29, 2019 and March 30, 2018. Reclassification of certain prior year amounts have been made to conform to current year presentation. On October 1, 2018, we completed the split-off of businesses in our automation and specialty platform (excluding our Hengstler and Dynapar businesses) (the “A&S Business”) and have reported the A&S Business as discontinued operations in our Consolidated Condensed Statements of Income, Consolidated Condensed Balance Sheets, and Consolidated Condensed Statements of Cash Flows for all periods presented. Unless otherwise noted discussion within these notes to the consolidated condensed financial statements relates to continuing operations. Refer to Note 3 for additional information on discontinued operations. Accumulated Other Comprehensive Income (Loss)—Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. We have designated our Euro-denominated commercial paper and ¥13.8 billion senior unsecured term facility loan as net investment hedges of our investment in certain foreign operations. Accordingly, foreign currency transaction gains or losses on the debt are deferred in the foreign currency translation component of accumulated other comprehensive income (loss) (“accumulated OCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. We recognized gains of $7.2 million for the three months ended March 29, 2019 and losses of $14.8 million for the three months ended March 30, 2018 in other comprehensive income related to the net investment hedge. Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated. We recorded no ineffectiveness from our net investment hedges during the three months ended March 29, 2019 and March 30, 2018, respectively. The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions):
|
Acquisitions |
3 Months Ended |
---|---|
Mar. 29, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 2. ACQUISITIONS For a description of our material acquisition activity refer to Note 3 of our 2018 Annual Report on Form 10-K. We continually evaluate potential mergers, acquisitions and divestitures that align with our strategy and expedite the evolution of our portfolio of businesses into new and attractive areas. We have completed a number of acquisitions that have been accounted for as purchases and resulted in the recognition of goodwill in our financial statements. This goodwill arises because the purchase price for each acquired business reflects a number of factors including the complimentary fit, acceleration of our strategy and synergies the business brings with respect to our existing operations, the future earnings and cash flow potential of the business, the potential to add other strategically complimentary acquisitions to the acquired business, the scarce or unique nature of the business in its markets, competition to acquire the business, the valuation of similar businesses in the marketplace (as reflected in a multiple of revenues, earnings or cash flows) and the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance our existing offerings to key target markets and develop new and profitable businesses. We make an initial allocation of the purchase price at the date of acquisition based on our understanding of the fair value of the acquired assets and assumed liabilities. We obtain this information during due diligence and through other sources. In the months after closing, as we obtain additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learn more about the newly acquired business, we are able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. We are in the process of obtaining valuations of certain acquired assets and evaluating the tax impact of certain acquisitions. We make appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required. During the three months ended March 29, 2019, we recorded certain adjustments to the preliminary purchase price allocation of acquisitions that closed during 2018 which resulted in a net increase of $31.8 million to goodwill. Advanced Sterilization Products We entered into a purchase agreement, effective June 6, 2018, with Ethicon, Inc., a subsidiary of Johnson & Johnson, to purchase its Advanced Sterilization Products (“ASP”) business for approximately $2.7 billion in cash. The transaction was completed in accordance with the terms of the purchase agreement, and on April 1, 2019, we paid $2.7 billion in cash to acquire the ASP business. ASP is a leading global provider of innovative sterilization and disinfection solutions and pioneered low-temperature hydrogen peroxide sterilization technology. ASP’s products, which are sold globally, include the STERRAD system for sterilizing instruments and the EVOTECH and ENDOCLENS systems for endoscope reprocessing and cleaning. We are in the process of transitioning ownership of certain non-principal countries, which are subject to various statutory closing requirements. During this transition, we will be operating under a transition services agreement with Johnson & Johnson.
|
Discontinued Operations |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | NOTE 3. DISCONTINUED OPERATIONS Divestiture of A&S Business On October 1, 2018, we completed the split-off of four of our operating companies from the Automation & Specialty platform (the “A&S Business”) in a tax efficient Reverse Morris Trust transaction with Altra Industrial Motion Corp. (“Altra”). The total consideration received was $2.7 billion and consisted of (i) $1.3 billion through a fully-subscribed exchange offer, in which we accepted and subsequently retired 15,824,931 shares of our own common stock from our stockholders in exchange for the 35,000,000 shares of common stock of Stevens Holding Company, Inc., an entity created to hold the A&S Business; (ii) $1.0 billion in cash paid to us for the direct sales of certain assets and liabilities of the A&S Business; (iii) $250 million as part of a debt-for-debt exchange that reduced outstanding indebtedness of Fortive; and (iv) $150 million in cash paid to us by Steven’s Holding Company, Inc. as a dividend. We recognized an after-tax gain on the transaction of $1.9 billion. The accounting requirements for reporting the disposition of the A&S Business as a discontinued operation were met when the separation and merger were completed in the fourth quarter of 2018. Accordingly, the accompanying consolidated financial statements reflect this business as discontinued operations for all periods presented. We are providing certain support services to Altra under transition services agreements. The impact of these services on our consolidated condensed financial statements was immaterial. The key components of income from discontinued operations for the three month periods ended March 29, 2019 and March 30, 2018 were as follows ($ in millions):
Interest expense related to the debt retired as part of the debt-for-debt exchange was allocated to discontinued operations for all periods prior to the disposition. The following table summarizes the major classes of assets and liabilities of discontinued operations that were included in our accompanying Consolidated Condensed Balance Sheets as of March 29, 2019 and December 31, 2018 ($ in millions):
|
Goodwill |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | NOTE 4. GOODWILL The following is a rollforward of our goodwill ($ in millions):
The carrying value of goodwill by segment is summarized as follows ($ in millions):
|
Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | NOTE 5. FAIR VALUE MEASUREMENTS Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where our assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows:
Below is a summary of financial liabilities that are measured at fair value on a recurring basis ($ in millions):
Certain management employees participate in our nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis, until after their termination of employment. All amounts deferred under such plans are unfunded, unsecured obligations and are presented as a component of our compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within our defined contribution plans for the benefit of U.S. employees (except that the earnings rates for amounts contributed unilaterally by the Company are entirely based on changes in the value of Fortive common stock). Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates. Fair Value of Financial Instruments The carrying amount and fair value of financial instruments are as follows ($ in millions):
As of March 29, 2019 and December 31, 2018, the current portion of long-term debt and long-term debt, net of current maturities were categorized as Level 1. The fair values of the current portion of long-term debt and long-term debt were based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings may be attributable to changes in market interest rates and/or our credit ratings subsequent to the incurrence of the borrowing. The fair value of cash and cash equivalents, accounts receivable, net and trade accounts payable approximates their carrying amount due to the short-term maturities of these instruments.
|
Financing and Capital |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing and Capital | NOTE 6. FINANCING AND CAPITAL The carrying value of the components of our long-term debt were as follows ($ in millions):
Unamortized debt discounts, premiums and issuance costs of $137.7 million and $17.0 million as of March 29, 2019 and December 31, 2018, respectively, are netted against the aggregate principal amounts of the components of debt in the table above. Refer to Note 10 of our 2018 Annual Report on Form 10-K for further details of our debt financing. We generally satisfy any short-term liquidity needs that are not met through operating cash flows and available cash primarily through issuances of commercial paper under our U.S. dollar and Euro-denominated commercial paper programs (“Commercial Paper Programs”). Credit support for the Commercial Paper Programs is provided by a five-year $2.0 billion senior unsecured revolving credit facility that expires on November 30, 2023 (the “Revolving Credit Facility”) which can also be used for working capital and other general corporate purposes. As of March 29, 2019, no borrowings were outstanding under the Revolving Credit Facility. Convertible Senior Notes On February 22, 2019, we issued $1.4 billion in aggregate principal amount of our 0.875% Convertible Senior Notes due 2022 (the “Convertible Notes”), including $187.5 million in aggregate principal amount resulting from an exercise in full of an over-allotment option. The Convertible Notes were sold in a private placement to certain initial purchasers for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Convertible Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by four of our wholly-owned domestic subsidiaries (the “Guarantees”). Under the Indenture, the Convertible Notes are our senior unsecured obligations, and the Convertible Notes and the Guarantees rank equally in right of payment with all of our and the guarantors’ existing and future liabilities that are not subordinated, but effectively rank junior to any of our and the guarantors secured indebtedness to the extent of the value of the assets securing such indebtedness. In addition, the Convertible Notes are structurally subordinated to all of the existing and future obligations, including trade payables, of our subsidiaries that do not guarantee the Convertible Notes. The Convertible Notes bear interest at a rate of 0.875% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2019. The Convertible Notes mature on February 15, 2022, unless earlier repurchased or converted in accordance with their terms prior to such date. The Convertible Notes are convertible into shares of our common stock at an initial conversion rate of 9.3777 shares per $1,000 principal amount of Convertible Notes (which is equivalent to an initial conversion price of $106.64 per share), subject to adjustment upon the occurrence of certain events. The initial conversion price represents a premium of approximately 32.5% to the $80.48 per share closing price of our common stock on February 19, 2019. Upon conversion of the Convertible Notes, holders will receive cash, shares of our common stock, or a combination thereof, at Fortive’s election. Our current intention is to settle such conversions through cash up to the principal amount of the converted Convertible Notes and, if applicable, through shares of our common stock for conversion value, if any, in excess of the principal amount of the converted Convertible Notes. Of the $1.4 billion in proceeds received from the issuance of the Convertible Notes, $1.3 billion was classified as debt and $102.2 million was classified as equity, using an assumed effective interest rate of 3.38%. Debt issuance costs of $24.3 million were proportionately allocated to debt and equity. We recognized $5.5 million in interest expense during the three months ended March 29, 2019, of which $1.3 million related to the contractual coupon rate of 0.875% and $0.9 million was attributable to the amortization of debt issuance costs. The discount at issuance was $102.2 million and is being amortized over a three-year period. The unamortized discount at March 29, 2019 was $99.0 million. Prior to November 15, 2021, the Convertible Notes will be convertible only upon the occurrence of certain events and will be convertible thereafter at any time until the close of business on the business day immediately preceding the maturity date of the Convertible Notes. The conversion rate is subject to customary anti-dilution adjustments. If certain corporate events described in the Indenture occur prior to the maturity date, the conversion rate will be increased for a holder that elects to convert its Convertible Notes in connection with such corporate event in certain circumstances. The Convertible Notes are not redeemable prior to maturity, and no sinking fund is provided for the Convertible Notes. If we undergo a “fundamental change,” as defined in the Indenture, subject to certain conditions, holders may require us to repurchase for cash all or any portion of their Convertible Notes. The fundamental change purchase price will be 100% of the principal amount of the Convertible Notes to be repurchased plus any accrued and unpaid additional interest up to but excluding the fundamental change repurchase date. The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on all the Convertible Notes to be due and payable. We used the net proceeds from the offering to fund a portion of the cash consideration payable for, and certain costs associated with, our acquisition of ASP. In connection with this offering of the Convertible Notes, on February 21, 2019, we entered into amendments to the credit facility agreement associated with our delayed-draw term loan due 2019 dated as of August 22, 2018, and our Credit Agreement, dated as of November 30, 2018, to exclude the Guarantees from the limitations on subsidiary indebtedness under the Agreements. Delayed-Draw Term Loan Due 2020 On March 1, 2019, we entered into a credit facility agreement that provides for a 364-day delayed-draw term loan facility (“2020 Delayed-Draw Term Loan”) in an aggregate principal amount of $1.0 billion. On March 20, 2019, we drew down the full $1.0 billion available under the 2020 Delayed-Draw Term Loan in order to fund, in part, the ASP Acquisition. The 2020 Delayed-Draw Term Loan bears interest at a variable rate equal to the London inter-bank offered rate plus a ratings based margin currently at 75 basis points. As of March 29, 2019, borrowings under this facility bore an interest rate of 3.24% per annum. The 2020 Delayed-Draw Term Loan is prepayable at our option, and we are not permitted to re-borrow once the term loan is repaid. The terms and conditions, including covenants, applicable to the 2020 Delayed-Draw Term Loan are substantially similar to those applicable to the Revolving Credit Facility. Commercial Paper The details of our Commercial Paper Programs as of March 29, 2019 are as follows ($ in millions):
We classified our borrowings outstanding under the Commercial Paper Programs as long-term debt in the accompanying Consolidated Condensed Balance Sheets as we had the intent and ability, as supported by availability under the Revolving Credit Facility referenced above, to refinance these borrowings for at least one year from the balance sheet date. As of March 29, 2019, we were in compliance with all of our covenants. Repayments On February 28, 2019, we prepaid the remaining $400.0 million outstanding principal and accrued interest under the delayed-draw term loan due 2019. The prepayment penalties associated with this payment were immaterial.
|
Leases |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | NOTE 7. LEASES In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms greater than 12 months and also requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs; hereinafter the collection of lease guidance is referred to as “ASC 842”. On January 1, 2019, we adopted ASC 842 using the modified retrospective transition method for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 840, Leases. The standard had a material impact on our Consolidated Condensed Balance Sheet but had no impact on our consolidated net earnings and cash flows. The most significant impact of adopting ASC 842 was the recognition of the ROU asset and lease liabilities for operating leases, which are presented in the following three line items on the Consolidated Condensed Balance Sheet: (i) operating lease right-of-use asset; (ii) current operating lease liabilities; and (iii) operating lease liabilities. We elected the package of practical expedients for leases that commenced before the effective date of ASC 842 whereby we elected to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. In addition, we have lease agreements with lease and non-lease components and we have elected the practical expedient for all underlying asset classes and account for them as a single lease component. Our finance lease and lessor arrangements are immaterial. We determine if an arrangement is a lease at inception. We have operating leases for office space, warehouses, distribution centers, research and development facilities, manufacturing locations, and certain equipment, primarily automobiles. Many leases include one or more options to renew, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases in less than one year. We considered options to renew in our lease terms and measurement of right-of-use assets and lease liabilities if we determined they were reasonably certain to be exercised. For the three months ended March 29, 2019, operating lease cost was $17.8 million. Short-term and variable lease cost, and cost for finance leases were immaterial for the three months ended March 29, 2019. During the three-month period ended March 29, 2019, cash paid for operating leases included in operating cash flows was $15.8 million. ROU assets obtained in exchange for operating lease obligations were immaterial for the three months ended March 29, 2019. The following table presents the maturity of our operating lease liabilities as of March 29, 2019 ($ in millions):
As previously disclosed in our 2018 Annual Report on Form 10-K and under Topic 840, future minimum lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year would have been as follows:
As of March 29, 2019, the weighted average lease term of our operating leases was 6.3 years and the weighted average discount rate of our operating leases was 3.4%. We primarily use our incremental borrowing rate as the discount rate for our operating leases, as we are generally unable to determine the interest rate implicit in the lease. As of March 29, 2019, we entered into operating leases for which the lease term had not yet commenced. These operating leases will commence in 2019 with lease terms between 1 and 10 years with fixed payments over the non-cancelable lease terms of $3.7 million.
|
Sales |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | NOTE 8. SALES We derive revenues primarily from the sale of Professional Instrumentation and Industrial Technologies products and services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Product Sales include revenues from the sale of products and equipment, which includes our software as a service product offerings and equipment rentals. Service Sales includes revenues from extended warranties, post-contract customer support (“PCS”), maintenance contracts or services, contract labor to perform ongoing service at a customer location, and services related to previously sold products. Contract Assets — In certain circumstances, we record contract assets which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not only subject to the passage of time. Contract assets were immaterial as of March 29, 2019 and December 31, 2018. Contract Costs — We incur direct incremental costs to obtain certain contracts, typically sales-related commissions and costs associated with assets used by our customers in certain service arrangements. Deferred sales-related commissions are generally not capitalized as the amortization period is 1 year or less, and we elected to use the practical expedient to expense these sales commissions as incurred. As of March 29, 2019, we had $139.2 million in net revenue-related contract assets related to certain service arrangements. Our revenue-related contract assets at December 31, 2018 were $144.4 million, the majority of which were recorded in property, plant and equipment on the Consolidated Condensed Balance Sheet. These assets have estimated useful lives between 3 and 5 years. Impairment losses recognized on our revenue-related contract assets were immaterial in the three months ended March 29, 2019. Contract Liabilities — Our contract liabilities consist of deferred revenue generally related to PCS and extended warranty sales, where in most cases we receive up-front payment and recognize revenue over the support term. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The noncurrent portion of deferred revenue is included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Our contract liabilities consisted of the following ($ in millions):
In the three months ended March 29, 2019, we recognized $114.3 million of revenue related to our contract liabilities at December 31, 2018. The change in our contract liabilities from December 31, 2018 to March 29, 2019 was primarily due to the timing of cash receipts and sales of post-contract support and extended warranty services. Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, noncancelable orders, with expected delivery dates to customers greater than one year from March 29, 2019, for which work has not been performed. We have excluded performance obligations with an original expected duration of one year or less from the amounts below. The aggregate performance obligations attributable to each of our segments is as follows ($ in millions):
The majority of remaining performance obligations are related to service and support contracts, which we expect to fulfill approximately 40 percent within the next two years, approximately 75 percent within the next three years and substantially all within four years. Disaggregation of Revenue We disaggregate revenue from contracts with customers by sales of products and services, geographic location, major product group and end market for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Disaggregation of revenue for the three months ended March 29, 2019 is presented as follows ($ in millions):
Disaggregation of revenue for the three months ended March 30, 2018 is presented as follows ($ in millions):
|
Pension Plans |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans | NOTE 9. PENSION PLANS For a full description of our noncontributory defined benefit pension plans refer to Note 11 of our 2018 Annual Report on Form 10-K. The following sets forth the components of our net periodic pension costs associated with our noncontributory defined benefit pension plans ($ in millions):
We report all components of net periodic pension costs, with the exception of service costs, in other non-operating expenses as a component of non-operating income in the accompanying Consolidated Condensed Statements of Earnings. Service costs are reported in cost of sales and selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings according to the classification of the participant’s compensation. Employer Contributions During 2019, our cash contribution requirements for our non-U.S. defined benefit pension plans are expected to be approximately $9.6 million. We do not expect to make contributions to the U.S. plan during 2019. The actual amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.
|
Income Taxes |
3 Months Ended |
---|---|
Mar. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10. INCOME TAXES Our effective tax rate for the three months ended March 29, 2019 was 14.8% as compared to 15.7% for the three months ended March 30, 2018. The year-over-year decrease was due primarily to favorable impacts of certain federal and international tax benefits. Our effective tax rate for 2019 and 2018 differs from the U.S. federal statutory rate of 21% due primarily to the effect of the Tax Cuts and Jobs Act (“TCJA”) U.S. federal permanent differences, the impact of credits and deductions provided by law, and earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U.S. federal statutory rate.
|
Stock-Based Compensation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | NOTE 11. STOCK-BASED COMPENSATION Our stock-based compensation program (the “Stock Plan”) provides for the grant of stock appreciation rights, performance stock units, restricted stock units, restricted stock awards and performance stock awards (collectively, “Stock Awards”), stock options or any other stock-based award. As of March 29, 2019, approximately 20 million shares of our common stock were available for subsequent issuance under the Stock Plan. For a full description of our stock-based compensation program refer to Note 17 of our 2018 Annual Report on Form 10-K. Stock-based Compensation Expense Stock-based compensation has been recognized as a component of selling, general & administrative expenses in the accompanying Consolidated Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest. The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions):
On February 22, 2019, the Board of Directors granted 1.7 million stock options and 550 thousand stock awards at market value to employees. The following summarizes the unrecognized compensation cost for the Stock Plan awards as of March 29, 2019. This compensation cost is expected to be recognized over a weighted average period of approximately two years, representing the remaining service period related to the awards. Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):
|
Commitments and Contingencies |
3 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Commitments and Contingencies | NOTE 12. COMMITMENTS AND CONTINGENCIES For a description of our litigation and contingencies, refer to Notes 15 and 16 of our 2018 Annual Report on Form 10-K. We generally accrue estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. The following is a rollforward of our accrued warranty liability ($ in millions):
|
Net Earnings Per Share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Earnings Per Share | NOTE 13. NET EARNINGS PER SHARE Basic net earnings per share (“EPS”) is calculated by dividing net earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding for the applicable period. Diluted EPS is similarly calculated, except that the calculation includes the dilutive effect of the assumed issuance of shares under stock-based compensation plans under the treasury stock method, except where the inclusion of such shares would have an anti-dilutive impact. There were 1.7 million and 1.5 million anti-dilutive options excluded from the diluted EPS calculation for the three months ended March 29, 2019 and March 30, 2018, respectively. As described in Note 6, upon conversion of the Convertible Notes, holders will receive cash, shares of our common stock, or a combination thereof, at our election. Our intention is to settle such conversions through cash up to the principal amount of the Convertible Notes and, if applicable, through shares of our common stock for conversion value, if any, in excess of the principal amount of the Convertible Notes. We believe we have the ability to settle these obligations as intended, and therefore we have accounted for the conversion features under the treasury stock method in our calculation of EPS. Given the price of our common stock is below the conversion price, the Convertible Notes had no impact on our earnings per share for the three months ended March 29, 2019. The impact of our MCPS calculated under the if-converted method were anti-dilutive, and as such 16.7 million shares were excluded from the diluted EPS calculation for the three months ended March 29, 2019. Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):
We declared and paid cash dividends per common share and per MCPS during the periods presented as follows:
|
Segment Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | NOTE 14. SEGMENT INFORMATION We report our results in two separate business segments consisting of Professional Instrumentation and Industrial Technologies. When determining the reportable segments, we aggregated operating segments based on their similar economic and operating characteristics. Operating profit amounts in the Other category consist of unallocated corporate costs and other costs not considered part of our evaluation of reportable segment operating performance. Our segment results are as follows ($ in millions):
|
Business Overview (Policies) |
3 Months Ended |
---|---|
Mar. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)—Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries. We have designated our Euro-denominated commercial paper and ¥13.8 billion senior unsecured term facility loan as net investment hedges of our investment in certain foreign operations. Accordingly, foreign currency transaction gains or losses on the debt are deferred in the foreign currency translation component of accumulated other comprehensive income (loss) (“accumulated OCI”) as an offset to the foreign currency translation adjustments on our investments in foreign subsidiaries. We recognized gains of $7.2 million for the three months ended March 29, 2019 and losses of $14.8 million for the three months ended March 30, 2018 in other comprehensive income related to the net investment hedge. Any amounts deferred in accumulated OCI will remain until the hedged investment is sold or substantially liquidated. We recorded no ineffectiveness from our net investment hedges during the three months ended March 29, 2019 and March 30, 2018, respectively. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards—In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. This standard is effective for us beginning January 1, 2020, with early adoption permitted. We are currently evaluating the impact of this standard on our financial statements. |
Sales | We derive revenues primarily from the sale of Professional Instrumentation and Industrial Technologies products and services. Revenue is recognized when control of promised products or services is transferred to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Product Sales include revenues from the sale of products and equipment, which includes our software as a service product offerings and equipment rentals. Service Sales includes revenues from extended warranties, post-contract customer support (“PCS”), maintenance contracts or services, contract labor to perform ongoing service at a customer location, and services related to previously sold products. Contract Assets — In certain circumstances, we record contract assets which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is not only subject to the passage of time. Contract assets were immaterial as of March 29, 2019 and December 31, 2018. Contract Costs — We incur direct incremental costs to obtain certain contracts, typically sales-related commissions and costs associated with assets used by our customers in certain service arrangements. Deferred sales-related commissions are generally not capitalized as the amortization period is 1 year or less, and we elected to use the practical expedient to expense these sales commissions as incurred. As of March 29, 2019, we had $139.2 million in net revenue-related contract assets related to certain service arrangements. Our revenue-related contract assets at December 31, 2018 were $144.4 million, the majority of which were recorded in property, plant and equipment on the Consolidated Condensed Balance Sheet. These assets have estimated useful lives between 3 and 5 years. Impairment losses recognized on our revenue-related contract assets were immaterial in the three months ended March 29, 2019. Contract Liabilities — Our contract liabilities consist of deferred revenue generally related to PCS and extended warranty sales, where in most cases we receive up-front payment and recognize revenue over the support term. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize revenue. The noncurrent portion of deferred revenue is included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets.Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, noncancelable orders, with expected delivery dates to customers greater than one year from March 29, 2019, for which work has not been performed. We have excluded performance obligations with an original expected duration of one year or less from the amounts below.
|
Business Overview (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of Accumulated Other Comprehensive Income | The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions):
|
Discontinued Operations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Key Components of Discontinued Operations | The key components of income from discontinued operations for the three month periods ended March 29, 2019 and March 30, 2018 were as follows ($ in millions):
|
Goodwill (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following is a rollforward of our goodwill ($ in millions):
The carrying value of goodwill by segment is summarized as follows ($ in millions):
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Liabilities Measured on Recurring Basis | Below is a summary of financial liabilities that are measured at fair value on a recurring basis ($ in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amounts and Fair Values of Financial Instruments | The carrying amount and fair value of financial instruments are as follows ($ in millions):
|
Financing and Capital (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The details of our Commercial Paper Programs as of March 29, 2019 are as follows ($ in millions):
|
Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Operating Lease Liabilities | The following table presents the maturity of our operating lease liabilities as of March 29, 2019 ($ in millions):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | As previously disclosed in our 2018 Annual Report on Form 10-K and under Topic 840, future minimum lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year would have been as follows:
|
Sales (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract liabilities | Our contract liabilities consisted of the following ($ in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Remaining performance obligations | The aggregate performance obligations attributable to each of our segments is as follows ($ in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | Disaggregation of revenue for the three months ended March 30, 2018 is presented as follows ($ in millions):
|
Pension Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Costs | The following sets forth the components of our net periodic pension costs associated with our noncontributory defined benefit pension plans ($ in millions):
|
Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Costs | The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Compensation | Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions):
|
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Accrued Warranty Liability | The following is a rollforward of our accrued warranty liability ($ in millions):
|
Net Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | Information related to the calculation of net earnings per share of common stock is summarized as follows ($ and shares in millions, except per share amounts):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends Declared | We declared and paid cash dividends per common share and per MCPS during the periods presented as follows:
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information | Our segment results are as follows ($ in millions):
|
Acquisitions (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 01, 2019 |
Mar. 29, 2019 |
|
Business Acquisition [Line Items] | ||
Adjustments to purchase price allocation | $ 31.8 | |
Subsequent Event | Acquisitions, ASP | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 2,700.0 |
Discontinued Operations - Narrative (Details) - A&S Business - Discontinued Operations $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 01, 2018
USD ($)
company
shares
|
Dec. 31, 2018
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of operating segments | company | 4 | |
Consideration | $ 2,700 | |
Exchange offer | $ 1,300 | |
Consideration, number of shares (in shares) | shares | 15,824,931 | |
Cash paid to company for direct sales of assets and liabilities | $ 1,000 | |
Debt-for-debt exchange | 250 | |
Cash paid to company as a dividend | $ 150 | |
After tax gain on transaction | $ 1,900 | |
Stevens Holding Company, Inc. | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Stockholders right to exchange (in shares) | shares | 35,000,000 |
Discontinued Operations - Key Components of Income and Major Classes of Assets and Liabilities from Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
Dec. 31, 2018 |
|
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Sales | $ 5.7 | $ 248.5 | |
Cost of sales | (5.8) | (144.0) | |
Selling, general and administrative expenses | 0.0 | (35.2) | |
Research and development expenses | 0.0 | (9.0) | |
Gain on disposition of discontinued operations before income taxes | 0.5 | 0.0 | |
Interest expense and other | 0.0 | (1.3) | |
Earnings before income taxes | 0.4 | 59.0 | |
Income taxes | 0.0 | (11.8) | |
Net earnings | 0.4 | $ 47.2 | |
ASSETS | |||
Trade accounts receivable, net | 5.1 | $ 4.2 | |
Inventories | 0.0 | 4.4 | |
Other current assets | 21.2 | 21.4 | |
Total current assets, discontinued operations | 26.3 | 30.0 | |
Current liabilities: | |||
Trade accounts payable | 5.4 | 9.2 | |
Accrued expenses and other current liabilities | 17.3 | 21.5 | |
Total current liabilities, discontinued operations | $ 22.7 | $ 30.7 |
Goodwill - Rollforward of Goodwill (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 29, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
December 31, 2018 | $ 6,133.1 |
Foreign currency translation & other | 35.9 |
March 29, 2019 | $ 6,169.0 |
Goodwill - Goodwill by Segment (Details) - USD ($) $ in Millions |
Mar. 29, 2019 |
Dec. 31, 2018 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 6,169.0 | $ 6,133.1 |
Professional Instrumentation | ||
Goodwill [Line Items] | ||
Goodwill | 4,927.3 | 4,894.6 |
Industrial Technologies | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,241.7 | $ 1,238.5 |
Financing and Capital - Commercial Paper (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Dec. 31, 2018 |
|
Debt Instrument [Line Items] | ||
Carrying value | $ 5,783.7 | $ 3,430.3 |
Commercial Paper | U.S. dollar-denominated commercial paper | ||
Debt Instrument [Line Items] | ||
Carrying value | $ 834.0 | 390.1 |
Annual effective rate | 2.82% | |
Weighted average remaining maturity (in days) | 16 days | |
Commercial Paper | Euro-denominated commercial paper | ||
Debt Instrument [Line Items] | ||
Carrying value | $ 264.2 | $ 270.1 |
Annual effective rate | (0.10%) | |
Weighted average remaining maturity (in days) | 78 days |
Leases - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 29, 2019
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Operating lease cost | $ 17.8 |
Cash paid for operating leases | $ 15.8 |
Lease term | 6 years 3 months 18 days |
Weighted average discount rate | 3.40% |
Fixed payments of leases not yet commenced | $ 3.7 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease term of leases not yet commenced | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Option to extend lease, period | 15 years |
Lease term of leases not yet commenced | 10 years |
Leases - Operating Lease Maturities (Details) - USD ($) $ in Millions |
Mar. 29, 2019 |
Dec. 31, 2018 |
---|---|---|
Leases [Abstract] | ||
2019 | $ 41.8 | |
2020 | 41.1 | |
2021 | 31.7 | |
2022 | 21.9 | |
2023 | 11.7 | |
Thereafter | 40.7 | |
Total lease payments | 188.9 | |
Less: imputed interest | (20.5) | |
Total lease liabilities | $ 168.4 | |
2019 | $ 54.2 | |
2020 | 41.2 | |
2021 | 32.4 | |
2022 | 24.0 | |
2023 | 13.5 | |
Thereafter | 16.1 | |
Total lease payments | $ 181.4 |
Sales - Contract Costs (Details) - USD ($) $ in Millions |
Mar. 29, 2019 |
Dec. 31, 2018 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Net revenue-related contract assets | $ 139.2 | $ 144.4 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Useful life | 3 years | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Useful life | 5 years | |
Deferred Sales Commissions | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Useful life | 1 year |
Sales - Contract liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Dec. 31, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue - current | $ 306.2 | $ 288.1 |
Deferred revenue - noncurrent | 97.3 | 92.6 |
Total contract liabilities | 403.5 | $ 380.7 |
Contract liabilities, revenue recognized | $ 114.3 |
Sales - Revenue, Remaining Performance Obligation (Details) $ in Millions |
Mar. 29, 2019
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 556.1 |
Professional Instrumentation | Operating Segments | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | 147.2 |
Industrial Technologies | Operating Segments | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligations | $ 408.9 |
Pension Plans - Components of Net Periodic Pension Cost (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Interest cost | $ 0.4 | $ 0.3 |
Expected return on plan assets | (0.3) | (0.4) |
Net periodic pension cost | 0.1 | (0.1) |
Foreign Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0.3 | 0.3 |
Interest cost | 1.4 | 1.4 |
Expected return on plan assets | (1.4) | (1.5) |
Amortization of net loss | 0.7 | 0.7 |
Net curtailment and settlement loss recognized | 0.0 | 0.2 |
Net periodic pension cost | $ 1.0 | $ 1.1 |
Pension Plans - Narrative (Details) $ in Millions |
Mar. 29, 2019
USD ($)
|
---|---|
Foreign Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contributions | $ 9.6 |
Income Taxes - Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 14.80% | 15.70% |
Stock-Based Compensation - Narrative (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Feb. 22, 2019 |
Mar. 29, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares of common stock reserved for issuance under the Stock Plan (in shares) | 20,000 | |
Stock options granted (in shares) | 1,700 | |
Remaining service period related to the awards | 2 years | |
Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock awards granted (in shares) | 550 |
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Pretax compensation expense | $ 12.9 | $ 11.0 |
Income tax benefit | (2.8) | (2.3) |
Total stock-based compensation expense | 10.1 | 8.7 |
Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Pretax compensation expense | 7.8 | 6.5 |
Income tax benefit | (1.7) | (1.4) |
Total stock-based compensation expense | 6.1 | 5.1 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Pretax compensation expense | 5.1 | 4.5 |
Income tax benefit | (1.1) | (0.9) |
Total stock-based compensation expense | $ 4.0 | $ 3.6 |
Stock-Based Compensation - Unrecognized Compensation Cost (Details) $ in Millions |
Mar. 29, 2019
USD ($)
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 147.6 |
Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | 77.2 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 70.4 |
Commitments and Contingencies - Rollforward of Accrued Warranty Liability (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 29, 2019
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty period - minimum | 90 days |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
December 31, 2018 | $ 72.1 |
Accruals for warranties issued during the period | 17.9 |
Settlements made | (23.0) |
Effect of foreign currency translation | (0.2) |
March 29, 2019 | $ 67.2 |
Net Earnings Per Share - Narrative (Details) - $ / shares shares in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 11, 2019 |
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1.7 | 1.5 | |
MCPS | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 16.7 | ||
Subsequent Event | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Dividend declared, common share | $ 0.07 | ||
Dividend declared, MCPS | $ 12.50 |
Net Earnings Per Share - Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Numerator | ||
Net earnings from continuing operations | $ 164.0 | $ 214.0 |
Mandatory convertible preferred stock cumulative dividends | (17.3) | 0.0 |
Net earnings attributable to common stockholders from continuing operations | $ 146.7 | $ 214.0 |
Denominator | ||
Weighted average common shares outstanding used in basic earnings per share (in shares) | 335.1 | 348.6 |
Incremental common shares from: | ||
Assumed exercise of dilutive options and vesting of dilutive Stock Awards (in shares) | 4.4 | 5.8 |
Weighted average common shares outstanding used in diluted earnings per share (in shares) | 339.5 | 354.4 |
Net earnings per common share from continuing operations - basic (in dollars per share) | $ 0.44 | $ 0.61 |
Net earnings per common share from continuing operations - diluted (in dollars per share) | $ 0.43 | $ 0.61 |
Net Earnings Per Share - Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Earnings Per Share [Abstract] | ||
Dividend per Common Share (in dollars per share) | $ 0.07 | $ 0.07 |
Amount, Common Shares | $ 23.4 | $ 24.3 |
Dividend per share on MCPS (in dollars per share) | $ 12.50 | $ 0 |
Amount, MCPS | $ 17.3 | $ 0.0 |
Segment Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 29, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Detailed Segment Data (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 29, 2019 |
Mar. 30, 2018 |
|
Segment Reporting Information [Line Items] | ||
Sales | $ 1,592.9 | $ 1,492.2 |
Operating profit | 217.3 | 277.9 |
Interest expense, net | (25.3) | (23.3) |
Other non-operating income (expenses), net | 0.4 | (0.7) |
Earnings from continuing operations before income taxes | 192.4 | 253.9 |
Professional Instrumentation | ||
Segment Reporting Information [Line Items] | ||
Sales | 947.3 | 871.7 |
Industrial Technologies | ||
Segment Reporting Information [Line Items] | ||
Sales | 645.6 | 620.5 |
Operating Segments | Professional Instrumentation | ||
Segment Reporting Information [Line Items] | ||
Sales | 947.3 | 871.7 |
Operating profit | 136.2 | 206.4 |
Operating Segments | Industrial Technologies | ||
Segment Reporting Information [Line Items] | ||
Sales | 645.6 | 620.5 |
Operating profit | 105.3 | 94.2 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Operating profit | $ (24.2) | $ (22.7) |
2W,':K"\(LE!>"&QWY?8S= H,P2Q4&=SORFQD[
M%788,:G%=,,GE:1QEI$L<\2BV:!HF;C:F2J#DM\Z.]!GI]/ W1CZ)TC<9W5-20L4[Z1],?P]C/3M*QN)_P 4DA@ &UL
M;5/;;MP@$/T5Q <$F_6VR (=?'0^\[5QPD#+O60N_
MP/WN3\9;9%&IN01EN5;(0%/@F]WAF 5\!/SA,-K5&85*SEH_!>.^+G 2$@(!
ME0L*S&\7N 4A@I!/XWG6Q$O(0%R?7]7O8NV^EC.S<*O%(Z]=5^!KC&IHV"#<
M@QZ_PUS/'J.Y^!]P >'A(1,?H]+"QA55@W5:SBH^% #^SB##"V$(PMV'BE 6,+-EZIP-BB
M&54M'2 -.3 6[-^B_>L<&PRV7&D V8(M5RI MFA$C3XH-$$R:]C%Y(+]6P"]
M%G(@*MAVI8%>"[9=J:#7HA==0RKJV(ID(; EZX(]7 #%%M8$R1TT!0]8\J J
M>J 1-495%RBC.+#D?O>
M5,$96Q'OO'CKO=>2)VG.KH%HB3G-,7P3PMN:#S+QO[WR Z\%*2&S]"G?]@JZ&@<>'XWI_-/&:SX7!8?A!;OW'Y
M&U!+ P04 " "$@9E.R,[SY+4! #2 P &0 'AL+W=OA"=.CMSWI@S.V(IXYY.WWGLM
M#CQCUZ S0TX3A*\@R8)@7GR)P+
F@Q9O*F.U\&C:FKG.@B@C
M22O&-YL]TT*V-$^C[VSSU/1>R1;.EKA>:V%_GT"9(:,)?7<\R[KQP<'RM!,U
M? ?_HSM;M-BL4DH-K9.F)1:JC-XGQ],NX"/@1<+@%F<2*KD8\QJ,+V5&-R$A
M4%#XH"!PN\(#*!6$,(U?DR:=0P;B\ORN_A1KQUHNPL+]EZ9N,'B@IH1*]
M\L]F^ Q3/;>43,5_A2LHA(=,,$9AE(LK*7KGC9Y4,!4MWL9=MG$?QIOMIXFV
M3N 3@<^$0XS#QD Q\T?A19Y:,Q []KX3X8F3(\?>%,$96Q'O,'F'WFO.]_N4
M78/0A#F-&+[ )#."H?H<@J^%./'_Z'R=OEW-\_@F?^'CM'\3MI:M(Q?C\65C
M_RMC/& JFQLJ<'L6?HOGK
M_%:U9^XMRSXK1%EGLK0J<5C;S_3TZK,NH%?\G8EK/3FVNE+>I?S6G?RV7]M>
MYTCD8M=T*=+VZT.\B#SO,K4^OH])[=N87>#T^#/[E[[XMICWM!8O,O\GVS>G
MM1W;UEX1'D(/:NDFQ84#D&$$,X%X5(01/\MP',!WA2@29FQ
M^I%(4A6
KX@"-X.D/]$27H1'J7K
M3;>E1Y)[$'A;0="^LM!\"-X+4/B!
0AR1D3=.MV7CP&%X\-"?AE@I#A
M!!PFX$,",>DD-#H9,90,H&ILA<J
M.X+F'S*.0V_9NA LN5M@!/
N[I^P!;'U%4< 0,)H&-/WZ71 D3
M9"!!9@BR&<$B4?F&-58?2$3.K]P,(3[T[4]Z8.SMB*>.?%6^^]58?C
ML2"W0#1CS@E#5YC=@B">?4E!MU*=&UB6_!L4BU;U1:DQL;_1EV'Y3FK?*WF[8$K33$
M@^*[SUH8S7VMJRA\!')VSLKXIOBBA!71]RKE(#9C$3V7&9%3,[1_FG6GY XO
M%JWBXO:PGIMI\&&\GO#ZZ>@89P%Z$D/K,,> K1'CRP29)5+#$:UQMK_'%#GX
M%[J5L&:&N[K3<'>8:*H^8BE<-]6-5($XH] %UD>7$X%Z0.?K)*:L(1$^R\"H
ML+4YL>("LZ+XQ OH)&H2+[9F3"$--QG.?8=A9Y=(<$NJG53D/NL.)I.)ZH),
M)+)+O/=-=3XG?"N#_F ]\T GQSFXVA\F0"/ TRYYH)X67[ DC
M-3/62@?G*(D1D,>G/$DX*@L^4X;U$K3:4.1*P:-U#9G+W]Q#UN5D95X(Y9MF
MST"!-CRBRK&DQI3)4^FP,8Q0"MB0V>$&Q.J#.O[(X(%0^[D;PI<@G3$N:6
4H7R0NY1YV,!=5(C*H;V32:B&FOPFG#48
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M8*EG[SGC#"7-BX"AFX8$KH/O]&:YK:NC(20WG=\+!
M /:[48'G"CPF( ''-.1 =Q@:B@P0]\E)F*B>),*\27RY*;OK2&S/ ]'<8>>L
MS\'D86=Z-G2!LMR(;J<_Q' S_/]@JOE"S]XL4Q.PO&FO$87D)UJWY3>OOS3,
M]QW'0I;&9*%_B-43V9@]5+DR?B33C/B#"?K$%K'RRMLLKPL:-ZK_B&H=3.93,^F]Z=78\])
MXSJ%P.I\C /H>F^A\ZAP+[0C<+$C< ?14TAC:>]/I'?JCD3/GQ']^6.':N=X
M5/;BZ?VKG\$FUL](XM)(.,UYAWXB>'_L
PKDM90.\%@Y5"* M+%[SD*A8F+R28CE\US@[L.W%;VY/<',DQ";
M9\_XG# AIKZ)?>6N-IT[CBDH(5906Y0/?<5F>.Y@P;H758:8F((2ZC&RUYBE
MY'Z&W=>7LW#B$%-0^K^\XH!_Q%: +7^'A>8;A^;F0[FY##$Q!:7$"GK!#.F:
M,S63[KX,,=')=V(%A2/T/1D^Q,04E%)/M1QZ,6^10TS,0BFQA1#,
M15U5(29FH93:0H
UF5Y"6VWZHOF3;L_Q^Z[U_-_ 5!+
M P04 " "$@9E.;.FO/C," #+)P &@ 'AL+U]R96QS+W=O
0R&3\?IUK82F0HI6_!.P[B+,#X.EUTOF750HK
(SY8/C+LY*8L:
M\#E]+^?D7#P^?CZ_!X*>&*I(;/[UI$BRQ$HODD%_*CM>^"=&*LUFF*_NEZL,
M26;VXVS2]>0CQN0=8.P=9K/J0M-)SLZ1;TNZLU:IH^H2M-.O\S\?DOGNBR_A
MZ5T2!G^;#)KXR%1$O*GEXQR<]V0;RV1RL!5,CK,TAEU@R7O8H'.+Y4$
M:V\[>?W+Z]OS?ZABN-=7E]=<%:?93GCW-^3S"^']3]L'F9>6+ ]P0*:0
M,;_MN+YI^])I,)7;(*#K2Q?">ZZA*I335#')3X.Q(L=5G.39NRQ+HKMQOMW]
M-KZ(ATIO)?%@(+N 56>04():97OP*@!!%%F
M!!*Q-C))I%L6DBBI8\RW' RL+$M \E#[/Z>H65#]?BJM
MAQ4*FT].I .[AY[E;E_-\_GW%B0V=4U8480YJT #7!C\;9*\6WP$<4:9FL^0
MC78YFL_@AZB%:[4@,; JY@E7-&960"TX0P(KY0QFM<9 RP5N^JK\0X
MRAZ2B1A>-)^EQ1="0.#?--1Z0C,_/*^EB7?HULGTGCC=EYUE5XUV5,U_5F@X
M6F'\XM120*9ZOD7=:XQ$5*Q0;I^/INJ(\<2)433;>U,J_/CG>K>LO0HVOL'F
M=(3Z1JA9B+L=G71T\EX![4Q\*FO6!G7Y0U,HS\]Z>P83[W:_V_UN]\]SXMWN
M[QFYJ;;TX/_P K)8TE%YP.SX]S#)C#5.2ON"2@0= AP;&Z;5C,P:L9;E8'G&3D$LJ[;8K/4TKO*>:S2+.;#=8PN+6&\JCLX>&BT,+S?3_<
M=JD,'!W'\8E+$0,"(H@9?),&KF8I3C*6NI(W"M
M+"J5A5U*LU%,?,2PX_C,(0@Y2(@BV^X(SQ&([,5Q:%Q90-C,%J#C418'=QM,
MD87O3?V+/?@57=8(:+Z0SJ1"H(SF5\78PA7 9+C(RSE$.A+LM>Y#,^DWFX)F
MDF\;,K?]2-;1_6XAVXHT^SH\FW,\NX[P@<4)]ASJN C[$%@%GEW3I=;KDG>-
MI=-M1!K-QNT$SV^;B#_J1,'/29RF*C=_'V5M6G1KQ[J:;8-Y^$\%QH([ -D4
MN
ZG.[Z\Q3-?=HQ;NA5VUQX]SZ7MMLA\)NUTO]K\@<0GA[??B_"XB_&P[VZA
M\Z&/5SY*?LTGO:L*4I \2CPEOYHDL".)_GCF0YX7--'J LZ?YK_Q O'RMN$F
M$C2*3:5 (R"1EI0JB%* #*J*31&@(!#W0:B1M%\5^SB=3X 9LP=;H
#0#K)#PW<.+-I_9";FZ$;@=>E/+$,O (QN$YN0K2
M)]_4V69YF'YE_"U8Y7(\GHZD P[)O?CJJVX6C\+0^P6]X!
MQ$5>\E-MGK$(3K*R,[(F>3]92.<
M
'T#FQ5V
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M@AG'2*=8OS(@UV_7+_66;%N%@/Q-ZY=W5I78 XTA\FD!<:/E%C3(I%0ZP9
@@G"/=C$QH2^+T#%**1\-:
MA6@CTY"F" CL>Q91S;BP3--,9BE F"*ZHE@TX*=;<0WHF.^UC1#]$A%R=AAR
M"*G;DG)E&3!8&$XH0$A3CC&C1#,&L6$KJ1;M0TYK 13[#3G/*@>XM0*!?_X_
M>:"BTF)J,TX$A@!1H[&V% O@E&G$,F@5
$Z7NSY/LW[/!Q#UT
M.HYNBN34L#=/ZW?R%SY.QE_Z[R-LYMI;-E"SPWI6#+O4UX..R9%
XBRYW5%:YR ',[&T;#P9>L@2,%_$Y&U2X;EZ@H$RFT0@%C!5'6)$A*
M03715A*:$*#%6N7VD3>N%W8<>IQSYW?V=W]X>$P'DR#)PW&>9TO1K'%!*+,-
MSE8=A/*@<^\I"
?1M__I]IXYS.??5>W7UT#W!3#>!;E*--XH\H 9<&],G&%OK?W[4@(,85.NF$/'WH_A'7F$#6FY<=/+A_0(FL.!XL-S
MTH-IZ]2.#5*K&D@#RW)
\K
MS=TKUCA.(3N8S798I4,6F7QX?5=*B#9- ,F\ER6B[(/LU#Y*9LF#-(A.^G)>
MDGK10#W -NVI J