Basis of Presentation and Significant Accounting Policies (Tables)

6 Months Ended

Jul. 01, 2018



Adoption of the standard related to pension and postretirement benefit costs impacted our prior period condensed consolidated statements of income as follows:
	Three Months Ended July 2, 2017
(MILLIONS OF DOLLARS)	As Previously Reported			Effect of Change Higher/(Lower)			As Restated
Cost of sales	$	2,663		$	(3	)	$	2,660
Selling, informational and administrative expenses	3,425			5			3,430
Research and development expenses	1,780			7			1,787
Restructuring charges and certain acquisition-related costs	70			(1		)	70
Other (income)/deductions––net	(66		)	(8		)	(75		)
Income from continuing operations before provision for taxes on income	3,815			—			3,815

	Six Months Ended July 2, 2017
(MILLIONS OF DOLLARS)	As Previously Reported			Effect of Change Higher/(Lower)			As Restated
Cost of sales	$	5,134		$	(6	)	$	5,128
Selling, informational and administrative expenses	6,733			12			6,745
Research and development expenses	3,487			15			3,502
Restructuring charges and certain acquisition-related costs	228			(74		)	153
Other (income)/deductions––net	(68		)	53			(14		)
Income from continuing operations before provision for taxes on income	7,767			—			7,767



Adoption of the standards impacted our condensed consolidated balance sheet as follows:
				Effect of New Accounting Standards Higher/(Lower)
(MILLIONS OF DOLLARS)	As Previously Reported Balance at December 31, 2017			Revenues			Financial Assets and Liabilities			Income Tax Accounting			Reclassification of Certain Tax Effects from AOCI			Balance at January 1, 2018
Trade accounts receivable	$	8,221		$	13		$	—		$	—		$	—		$	8,234
Inventories	7,578			(11		)	—			—			—			7,567
Current tax assets	3,050			(11		)	—			(3		)	—			3,036
Noncurrent deferred tax assets and other noncurrent tax assets	1,855			(17		)	—			—			—			1,838
Other noncurrent assets	3,227			—			—			(204		)	—			3,023
Other current liabilities	11,115			(123		)	—			—			—			10,992
Noncurrent deferred tax liabilities	3,900			106			—			(18		)	—			3,988
Other noncurrent liabilities	6,149			(459		)	—			—			—			5,690
Retained earnings	85,291			450			419			(189		)	495			86,466
Accumulated other comprehensive loss	(9,321		)	—			(419		)	—			(495		)	(10,235		)



Adoption of the standards related to the classification of certain transactions in the statement of cash flows and the presentation of restricted cash in the statement of cash flows impacted our condensed consolidated statement of cash flows as follows:
	Six Months Ended July 2, 2017
				Effect of New Accounting Standards Inflow/(Outflow)
(MILLIONS OF DOLLARS)	As Previously Reported			Cash Flow Classification			Restricted Cash			As Restated
Operating Activities
Other adjustments, net	$	(433	)	$	(26	)	$	—		$	(458	)
Other changes in assets and liabilities, net of acquisitions and divestitures	(3,853		)	—			9			(3,844		)
Investing Activities
Proceeds from redemptions/sales of short-term investments	3,520			—			(3		)	3,517
Proceeds from redemptions/sales of long-term investments	1,539			—			(2		)	1,538
Financing Activities
Principal payments on short-term borrowings	(5,110		)	22			—			(5,088		)
Net proceeds from short-term borrowings with original maturities of three months or less	261			4			—			265
Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents	(10		)	—			5			(5		)
Cash and cash equivalents and restricted cash and cash equivalents, beginning	2,595			—			70			2,666
Cash and cash equivalents and restricted cash and cash equivalents, ending	2,585			—			75			2,661



The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
(MILLIONS OF DOLLARS)	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	2,704	$	1,342
Restricted cash and cash equivalents in Short-term investments	42		—
Restricted cash and cash equivalents in Long-term investments	66		—
Restricted cash and cash equivalents in Other current assets	—		14
Restricted cash and cash equivalents in Other noncurrent assets	—		75
Total cash and cash equivalents and restricted cash and cash equivalents shown in the condensed consolidated balance sheets	$	2,811	$	1,431



The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows:
(MILLIONS OF DOLLARS)	July 1, 2018		December 31, 2017
Cash and cash equivalents	$	2,704	$	1,342
Restricted cash and cash equivalents in Short-term investments	42		—
Restricted cash and cash equivalents in Long-term investments	66		—
Restricted cash and cash equivalents in Other current assets	—		14
Restricted cash and cash equivalents in Other noncurrent assets	—		75
Total cash and cash equivalents and restricted cash and cash equivalents shown in the condensed consolidated balance sheets	$	2,811	$	1,431



The following table provides information about the balance sheet classification of these accruals:
(MILLIONS OF DOLLARS)	July 1, 2018		December 31, 2017
Reserve against Trade accounts receivable, less allowance for doubtful accounts	$	1,252	$	1,352

Other current liabilities:
Accrued rebates	3,039		2,674
Other accruals	698		512

Other noncurrent liabilities	406		385
Total accrued rebates and other accruals	$	5,396	$	4,923