Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 29, 2018 | Jul. 19, 2018 | |
Document and Entity Information [Abstract] | ||
Document type | 10-Q | |
Amendment flag | false | |
Document period end date | Jun. 29, 2018 | |
Document fiscal year focus | 2,018 | |
Document fiscal period focus | Q2 | |
Trading symbol | FTV | |
Entity registrant name | Fortive Corp | |
Entity central index key | 1,659,166 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Large Accelerated Filer | |
Entity common stock, shares outstanding | 349,152,355 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and equivalents | $ 2,368.2 | $ 962.1 |
Accounts receivable, net | 1,187.8 | 1,143.6 |
Inventories: | ||
Finished goods | 223.2 | 217.2 |
Work in process | 107.9 | 78.9 |
Raw materials | 311.2 | 284.5 |
Total inventories | 642.3 | 580.6 |
Prepaid expenses and other current assets | 305.1 | 250.5 |
Total current assets | 4,503.4 | 2,936.8 |
Property, plant and equipment, net of accumulated depreciation of $1,114.9 and $1,086.8 at June 29, 2018 and December 31, 2017, respectively | 690.4 | 712.5 |
Other assets | 479.5 | 476.8 |
Goodwill | 5,081.9 | 5,098.5 |
Other intangible assets, net | 1,230.9 | 1,276 |
Total assets | 11,986.1 | 10,500.6 |
Current liabilities: | ||
Current portion of long-term debt | 799.3 | 0 |
Trade accounts payable | 763.5 | 727.5 |
Accrued expenses and other current liabilities | 735.9 | 874.8 |
Total current liabilities | 2,298.7 | 1,602.3 |
Other long-term liabilities | 1,118.1 | 1,033.9 |
Long-term debt | 2,927.4 | 4,056.2 |
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 June 29, 2018; no shares issued or outstanding at December 31, 2017 | 0 | 0 |
Common stock: $0.01 par value, 2.0 billion shares authorized; 349.5 and 348.2 million issued; 349.0 and 347.8 million outstanding at June 29, 2018 and December 31,2017, respectively | 3.5 | 3.5 |
Additional paid-in capital | 3,836.8 | 2,444.1 |
Retained earnings | 1,853.9 | 1,350.3 |
Accumulated other comprehensive income (loss) | (69.6) | (7.6) |
Total Fortive stockholders’ equity | 5,624.6 | 3,790.3 |
Noncontrolling interests | 17.3 | 17.9 |
Total stockholders’ equity | 5,641.9 | 3,808.2 |
Total liabilities and equity | $ 11,986.1 | $ 10,500.6 |
Consolidated Condensed Balance3
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,114.9 | $ 1,086.8 |
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) | 349,500,000 | 348,200,000 |
Common stock outstanding (in shares) | 349,000,000 | 347,800,000 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Sales | $ 1,856 | $ 1,628.8 | $ 3,596.7 | $ 3,164 |
Cost of sales | (917.1) | (823.7) | (1,787) | (1,614.9) |
Gross profit | 938.9 | 805.1 | 1,809.7 | 1,549.1 |
Operating costs: | ||||
Selling, general and administrative expenses | (445.5) | (356.9) | (869.2) | (709.1) |
Research and development expenses | (111) | (99.1) | (219.9) | (195.3) |
Operating profit | 382.4 | 349.1 | 720.6 | 644.7 |
Non-operating expense: | ||||
Interest expense, net | (25.3) | (22.7) | (49.9) | (45.3) |
Other non-operating expenses | (1.1) | (0.8) | (1.8) | (1.5) |
Earnings before income taxes | 356 | 325.6 | 668.9 | 597.9 |
Income taxes | (61) | (85.5) | (112.7) | (158.1) |
Net earnings | 295 | 240.1 | 556.2 | 439.8 |
Mandatory convertible preferred stock cumulative dividends | (0.2) | 0 | (0.2) | 0 |
Net earnings attributable to common stockholders | $ 294.8 | $ 240.1 | $ 556 | $ 439.8 |
Net earnings per common share: | ||||
Basic (in dollars per share) | $ 0.84 | $ 0.69 | $ 1.59 | $ 1.27 |
Diluted (in dollars per share) | $ 0.83 | $ 0.68 | $ 1.57 | $ 1.25 |
Average common stock and common equivalent shares outstanding: | ||||
Basic (in shares) | 349.2 | 347.2 | 348.9 | 347.1 |
Diluted (in shares) | 355 | 352.2 | 354.7 | 351.8 |
Consolidated Condensed Stateme
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 295 | $ 240.1 | $ 556.2 | $ 439.8 |
Other comprehensive income, net of income taxes: | ||||
Foreign currency translation adjustments | (99.8) | 45.2 | (63.4) | 88.8 |
Pension adjustments | 0.7 | 0.9 | 1.4 | 1.7 |
Total other comprehensive income, net of income taxes | (99.1) | 46.1 | (62) | 90.5 |
Comprehensive income | $ 195.9 | $ 286.2 | $ 494.2 | $ 530.3 |
Consolidated Condensed Stateme6
Consolidated Condensed Statement of Changes in Equity - USD ($) $ in Millions | Total | Common Stock | Preferred Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of accounting standard | $ (3.9) | ||||||
Common stock outstanding (in shares) at Dec. 31, 2017 | 347,800,000 | 347,800,000 | |||||
Preferred stock outstanding (in shares) at Dec. 31, 2017 | 0 | 0 | |||||
Balance, December 31, 2017 at Dec. 31, 2017 | $ 3,808.2 | $ 3.5 | $ 0 | $ 2,444.1 | 1,350.3 | $ (7.6) | $ 17.9 |
Balance, January 1, 2018 at Dec. 31, 2017 | $ 3.5 | $ 0 | 2,444.1 | 1,346.4 | (7.6) | 17.9 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings for the period | 556.2 | 556.2 | |||||
Dividends to shareholders | (48.7) | (48.7) | |||||
Separation related adjustments | 10.9 | ||||||
Other comprehensive income | (62) | (62) | |||||
Common stock-based award activity (in shares) | 1,200,000 | ||||||
Common stock-based award activity | 44.8 | ||||||
Issuance of mandatory convertible preferred stock (in shares) | 1,400,000 | ||||||
Issuance of mandatory convertible preferred stock | $ 1,338.2 | 1,337 | |||||
Change in noncontrolling interests | (0.6) | ||||||
Common stock outstanding (in shares) at Jun. 29, 2018 | 349,000,000 | 349,000,000 | |||||
Preferred stock outstanding (in shares) at Jun. 29, 2018 | 1,400,000 | 1,400,000 | |||||
Balance, June 29, 2018 at Jun. 29, 2018 | $ 5,641.9 | $ 3.5 | $ 0 | $ 3,836.8 | $ 1,853.9 | $ (69.6) | $ 17.3 |
Consolidated Condensed Stateme7
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 29, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net earnings | $ 556.2 | $ 439.8 |
Noncash items: | ||
Depreciation | 69.1 | 47.2 |
Amortization | 49.1 | 26.6 |
Stock-based compensation expense | 26.5 | 25.3 |
Change in accounts receivable, net | (54) | (20.7) |
Change in inventories | (68.4) | (7.9) |
Change in trade accounts payable | 41 | (28.8) |
Change in prepaid expenses and other assets | (42) | (8.3) |
Change in accrued expenses and other liabilities | (64.7) | (79.2) |
Net cash provided by operating activities | 512.8 | 394 |
Cash flows from investing activities: | ||
Cash paid for acquisitions | (9.3) | 0 |
Payments for additions to property, plant and equipment | (58.7) | (55.6) |
All other investing activities | 3.9 | (3) |
Net cash used in investing activities | (64.1) | (58.6) |
Cash flows from financing activities: | ||
Net repayments of borrowings (maturities of 90 days or less) | (326) | (158.8) |
Proceeds from issuance of mandatory convertible preferred stock net of $36 million of issuance costs | 1,338.2 | 0 |
Payments of dividends | (48.7) | (48.6) |
All other financing activities | 15.3 | 7.3 |
Net cash used by financing activities | 978.8 | (200.1) |
Effect of exchange rate changes on cash and equivalents | (21.4) | 29.9 |
Net change in cash and equivalents | 1,406.1 | 165.2 |
Beginning balance of cash and equivalents | 962.1 | 803.2 |
Ending balance of cash and equivalents | $ 2,368.2 | $ 968.4 |
Consolidated Condensed Stateme8
Consolidated Condensed Statements of Cash Flows Parenthetical $ in Millions | 6 Months Ended |
Jun. 29, 2018USD ($) | |
Parenthetical [Abstract] | |
Payments of Stock Issuance Costs | $ 36 |
Business Overview and Basis of
Business Overview and Basis of Presentation | 6 Months Ended |
Jun. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview and Basis of Presentation | NOTE 1. BUSINESS OVERVIEW Fortive Corporation (“Fortive”, the “Company,” “we,” “us,” or “our”) is a diversified industrial growth company encompassing businesses that are recognized leaders in attractive markets. Our well-known brands hold leading positions in advanced instrumentation and solutions, transportation technology, sensing, automation and specialty, 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, 2017 and the footnotes (“Notes”) thereto included within our 2017 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 June 29, 2018 and December 31, 2017 , and our results of operations and cash flows for the three and six months ended June 29, 2018 and June 30, 2017 . Reclassification of certain prior year amounts have been made to conform to current year presentation. 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. The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions): Foreign currency translation adjustments Pension adjustments Total For the Three Months Ended June 29, 2018: Balance, March 30, 2018 $ 100.4 $ (70.9 ) $ 29.5 Other comprehensive income (loss) before reclassifications, net of income taxes (99.8 ) — (99.8 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 0.9 (a) 0.9 Income tax impact — (0.2 ) (0.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 0.7 0.7 Net current period other comprehensive income (loss), net of income taxes (99.8 ) 0.7 (99.1 ) Balance, June 29, 2018 $ 0.6 $ (70.2 ) $ (69.6 ) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details). Foreign currency translation adjustments Pension Total For the Three Months Ended June 30, 2017: Balance, March 31, 2017 $ (29.0 ) $ (72.4 ) $ (101.4 ) Other comprehensive income (loss) before reclassifications, net of income taxes 45.2 — 45.2 Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.1 (a) 1.1 Income tax impact — (0.2 ) (0.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 0.9 0.9 Net current period other comprehensive income (loss), net of income taxes 45.2 0.9 46.1 Balance, June 30, 2017 $ 16.2 $ (71.5 ) $ (55.3 ) For the Six Months Ended June 29, 2018: Balance, December 31, 2017 $ 64.0 $ (71.6 ) $ (7.6 ) Other comprehensive income (loss) before reclassifications, net of income taxes (63.4 ) — (63.4 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.8 (a) 1.8 Income tax impact — (0.4 ) (0.4 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.4 1.4 Net current period other comprehensive income (loss) (63.4 ) 1.4 (62.0 ) Balance, June 29, 2018 $ 0.6 $ (70.2 ) $ (69.6 ) For the Six Months Ended June 30, 2017: Balance, December 31, 2016 $ (72.6 ) $ (73.2 ) $ (145.8 ) Other comprehensive income (loss) before reclassifications, net of income taxes 88.8 — 88.8 Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 2.2 (a) 2.2 Income tax impact — (0.5 ) (0.5 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.7 1.7 Net current period other comprehensive income (loss) 88.8 1.7 90.5 Balance, June 30, 2017 $ 16.2 $ (71.5 ) $ (55.3 ) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details). 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. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. The standard also requires lessees and lessors to disclose the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from the current standard. This standard is effective for us beginning January 1, 2019 (with early adoption permitted) using a modified retrospective transition approach and provides for certain practical expedients. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which provided additional implementation guidance on the previously issued ASU. We are in the process of assessing the impact of the standard and designing related internal control procedures. Based on our efforts to date, we expect the recognition of the right-of-use asset and lease liability for our real estate and equipment leases will have a material impact on the Consolidated Balance Sheets. We do not expect this standard to have a material impact on our future Consolidated Statements of Earnings. |
Acquisitions and Divestitures A
Acquisitions and Divestitures Acquisitions and Divestitures | 6 Months Ended |
Jun. 29, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 2. ACQUISITIONS AND DIVESTITURES For a description of our material acquisition activity, refer to Note 3 of our 2017 Annual Report on Form 10-K . We continually evaluate potential acquisitions and divestitures that align with our portfolio strategy and expedite the evolution of our portfolio into new and attractive business areas. We have completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in our financial statements. This goodwill arises because the purchase price for each business reflects a number of factors including the future earnings and cash flow potential of the business, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which we acquired the business, 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, and the complementary strategic fit and resulting synergies the business brings to existing operations. 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 in connection with certain acquisitions. We make appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required. Pending Acquisitions Advanced Sterilization Products On June 6, 2018, we made a binding offer to Ethicon, Inc., a subsidiary of Johnson & Johnson, to purchase its Advanced Sterilization Products (“ASP”) business for approximately $2.7 billion in cash. The transaction is expected to close no later than early 2019 and is subject to customary closing conditions, including regulatory approvals. 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. Gordian On July 2, 2018, we entered into a definitive agreement to acquire TGG Ultimate Holdings, Inc. and its subsidiaries, including The Gordian Group, Inc. (“Gordian”), a privately-held, leading provider of construction cost data, software and service. The purchase price for the acquisition is $775 million and the transaction is expected to close in the third quarter of 2018. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to be financed with available cash. Gordian’s comprehensive offerings serve the entire building lifecycle and provide workflow solutions to optimize every stage of an asset owner’s construction and maintenance needs, including connecting the owner and contractors in the same exchange and providing access to cost and facilities metrics databases via a subscription-based model. Planned Divestiture of A&S Business On March 7, 2018, we entered into a definitive agreement to combine four of our operating companies from our Automation & Specialty platform (the “A&S Business”) with Altra Industrial Motion Corp (“Altra”) in a tax-efficient Reverse Morris Trust transaction. In the transaction, we will receive approximately $1.4 billion in cash and debt retirement, and our shareholders will receive in the aggregate 35 million shares of Altra, representing approximately 54% of outstanding shares of Altra common stock immediately following the transaction. The A&S Business includes the market-leading brands of Kollmorgen, Thomson, Portescap and Jacobs Vehicle Systems, and generated approximately $907 million in revenue for the year ended December 31, 2017. The transaction is expected to close by the end of 2018, subject to customary closing conditions, including receipt of certain regulatory approvals, Altra shareholder approval, and our receipt of confirmation of the tax treatment of certain matters. Upon closing of the transaction, we will classify the historical results of the A&S Business as discontinued operations in our financial statements. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 3. GOODWILL The following is a rollforward of our goodwill ($ in millions): Balance, December 31, 2017 $ 5,098.5 Attributable to 2018 acquisitions 1.8 Foreign currency translation & other (18.4 ) Balance, June 29, 2018 $ 5,081.9 The carrying value of goodwill by segment is summarized as follows ($ in millions): June 29, 2018 December 31, 2017 Professional Instrumentation $ 3,321.1 $ 3,331.0 Industrial Technologies 1,760.8 1,767.5 Total goodwill $ 5,081.9 $ 5,098.5 We have not identified any “triggering” events which would have indicated a potential impairment of goodwill in the six months ended June 29, 2018 . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 4. 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: • 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. Below is a summary of financial liabilities that are measured at fair value on a recurring basis ($ in millions): Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total June 29, 2018 Deferred compensation liabilities $ — $ 21.7 $ — $ 21.7 December 31, 2017 Deferred compensation liabilities $ — $ 20.9 $ — $ 20.9 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): June 29, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Current portion of long-term debt $ 799.3 $ 796.4 $ — $ — Long-term debt, net of current maturities $ 2,927.4 $ 2,823.9 $ 4,056.2 $ 4,051.8 As of June 29, 2018 and December 31, 2017 , 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
Financing and Capital | 6 Months Ended |
Jun. 29, 2018 | |
Debt Disclosure [Abstract] | |
Financing | NOTE 5. FINANCING AND CAPITAL Financing The carrying value of the components of our long-term debt were as follows ($ in millions): June 29, 2018 December 31, 2017 U.S. dollar-denominated commercial paper $ 339.8 $ 665.1 Euro-denominated commercial paper 275.2 282.7 U.S. dollar variable interest rate term loan due 2019 500.0 500.0 Yen variable interest rate term loan due 2022 124.5 122.4 1.80% senior unsecured notes due 2019 299.3 298.9 2.35% senior unsecured notes due 2021 746.5 745.9 3.15% senior unsecured notes due 2026 891.5 891.0 4.30% senior unsecured notes due 2046 546.8 546.8 Other long-term debt 3.1 3.4 Long-term debt 3,726.7 4,056.2 Less: current portion of long-term debt 799.3 — Long-term debt, net of current maturities $ 2,927.4 $ 4,056.2 Unamortized debt discounts, premiums and issuance costs of $16.1 million and $18.2 million as of June 29, 2018 and December 31, 2017 , respectively, are netted against the aggregate principal amounts of the components of debt table above. Refer to Note 9 of our 2017 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 $1.5 billion senior unsecured revolving credit facility that expires on June 16, 2021 (the “Revolving Credit Facility”) which can also be used for working capital and other general corporate purposes. As of June 29, 2018 , no borrowings were outstanding under the Revolving Credit Facility. The details of our Commercial Paper Programs as of June 29, 2018 are as follows ($ in millions): Carrying value Annual effective rate Weighted average remaining maturity (in days) U.S. dollar-denominated commercial paper $ 339.8 2.39 % 9 Euro-denominated commercial paper $ 275.2 (0.10 )% 76 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 June 29, 2018 , we were in compliance with all of our covenants. Capital On June 29, 2018, we issued 1,380,000 shares of 5.0% Mandatory Convertible Preferred Stock, Series A (“MCPS”) with a par value of $0.01 per share and liquidation preference of $1,000 per share, which included the exercise of an over-allotment option in full to purchase 180,000 shares. We received $1.34 billion in proceeds from the issuance of the MCPS, net of $36 million of issuance costs. We will use the net proceeds from the issuance of MCPS to fund our acquisition activities and for general corporate purposes, including repayment of debt, working capital and capital expenditures. We expect to pay up to an additional $1.5 million in issuance costs in the third quarter of 2018. Each o utstanding share of MCPS will convert automatically on July 1, 2021 (“the mandatory conversion date”) into between 10.8554 and 13.2979 common shares, subject to anti-dilution adjustments. The number of shares of our common stock issuable on conversion will be determined based on the average volume weighted average price per share of our common stock over the 20 consecutive trading day period preceding the mandatory conversion date. At any time prior to July 1, 2021, holders may elect to convert each share of the MCPS into shares of common stock at the rate of 10.8554 , subject to anti-dilution adjustments. In the event of a fundamental change, the MCPS will convert at the fundamental change rates specified in the certificate of designations, and the holders of MCPS would be entitled to a fundamental change make-whole dividend. We may pay declared dividends in cash or, subject to certain limitations, in shares of our common stock, or in any combination of cash and shares of our common stock in January, April, July and October of each year, commencing on October 1, 2018 and ending on July 1, 2021. Dividends that are declared will be payable on the dividend payment dates to holders of record on the immediately preceding March 15, June 15, September 15 and December 15 (each a “record date”), whether or not such holders convert their shares, or such shares are automatically converted, after the corresponding record date. Dividends on our MCPS are payable on a cumulative basis when, as and if declared by our Board, at an annual rate of 5.0% of the liquidation preference of $1,000 per share (equivalent to $50.00 annually per share). The dividend on the MCPS for the first dividend period will be $12.78 per share and will be payable, when, as and if declared, on October 1, 2018 to the holders of record at the close of business on September 15, 2018. No dividends on our MCPS were declared as of June 29, 2018. Subsequent Event On July 20, 2018, we prepaid $325 million of our outstanding U.S variable interest rate term loan due in 2019. There were no prepayment penalties associated with this payment. |
Sales Sales
Sales Sales | 6 Months Ended |
Jun. 29, 2018 | |
Revenue Recognition [Abstract] | |
Revenue from Contract with Customer | NOTE 6. SALES On January 1, 2018, we adopted ASU 2014-09 Revenue from Contracts with Customers (“Topic 606”) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting policy under ASC Topic 605 Revenue Recognition . We recorded an immaterial transition adjustment to opening retained earnings as of January 1, 2018 due to the cumulative impact of adopting Topic 606. The impact to sales as a result of applying Topic 606 was immaterial for the three and six months ended June 29, 2018 . Our significant accounting policies are detailed in Note 2 of our 2017 Annual Report on Form 10-K . Significant changes to our accounting policies as a result of adopting Topic 606 are discussed below and have been applied prospectively from the adoption date of January 1, 2018: Revenue Recognition —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. For revenue related to a product or service to qualify for recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services. Further, collection of substantially all consideration for the goods or services transferred must be probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a combination of financial and qualitative factors, including the customers’ financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information. Customer allowances and rebates, consisting primarily of volume discounts and other short-term incentive programs, are considered in determining the transaction price for the contract; these allowances and rebates are reflected as a reduction in the contract transaction price. Significant judgment is exercised in determining product returns, customer allowances and rebates, and are estimated based on historical experience and known trends. Most of our sales contracts contain standard terms and conditions. We evaluate contracts to identify distinct goods and services promised in the contract (performance obligations). Sometimes this evaluation involves judgment to determine whether the goods or services are highly dependent on or highly interrelated with one another, or whether such goods or services significantly modify or customize one another. Certain customer arrangements include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post contract support (“PCS”). Generally, these elements are delivered within the same reporting period, except PCS or other services. We allocate the contract transaction price to each performance obligation using the observable price that the good or service sells for separately in similar circumstances and to similar customers, and/or a residual approach when the observable selling price of a good or service is not known and is either highly variable or uncertain. Allocating the transaction price to each performance obligation sometimes requires significant judgment. Our principal terms of sale are FOB Shipping Point, or equivalent, and, as such, we primarily record revenue upon shipment as we have transferred control to the customer at that point and our performance obligations are satisfied. We evaluate contracts with delivery terms other than FOB Shipping Point and recognize revenue when we have transfered control and satisfied our performance obligations. If any significant obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation, other services noted above or acceptance by the customer), revenue recognition is deferred until such obligations have been fulfilled. Further, revenue related to separately priced extended warranty and product maintenance agreements is deferred when appropriate and recognized as revenue over the term of the agreement. 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 June 29, 2018 . Contract Costs — We incur direct incremental costs to obtain certain contracts, typically sales-related commissions. Deferred sales-related commissions are generally not capitalized as the amortization period is one year or less, and we elected to use the practical expedient to expense these sales commissions as incurred. Impairment losses recognized on our contract-related assets were immaterial in the three and six months months ended June 29, 2018 . 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): June 29, 2018 December 31, 2017 Deferred revenue - current $ 210.5 $ 213.4 Deferred revenue - noncurrent 91.8 86.9 Total contract liabilities $ 302.3 $ 300.3 In the three and six months ended June 29, 2018 , we recognized $21 million and $64 million of revenue related to our contract liabilities at January 1, 2018 , respectively. The change in our contract liabilities from December 31, 2017 to June 29, 2018 was primarily due to the timing of cash receipts and sales of PCS and extended warranty services. Remaining Performance Obligations — Our remaining performance obligations represent the transaction price of firm, noncancelable orders, with expected delivery dates to customers greater than one year from June 29, 2018 , for which work has not been performed. We have excluded performance obligations with an original expected duration of one year or less from the amounts below. The aggregate performance obligations attributable to each of our segments is as follows ($ in millions): June 29, 2018 Professional Instrumentation $ 117.0 Industrial Technologies 453.2 Total $ 570.2 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 70 percent within the next three years and substantially all within four years. Disaggregation of Revenue We disaggregate revenue from contracts with customers by 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 June 29, 2018 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 993.5 $ 435.9 $ 557.6 China 161.7 101.0 60.7 Germany 84.3 32.0 52.3 All other (each country individually less than 5% of total sales) 616.5 320.1 296.4 Total $ 1,856.0 $ 889.0 $ 967.0 Major Products Group: Professional tools and equipment $ 1,245.9 $ 719.8 $ 526.1 Industrial automation, controls and sensors 333.5 104.8 228.7 Franchise distribution 152.2 — 152.2 All other 124.4 64.4 60.0 Total $ 1,856.0 $ 889.0 $ 967.0 End markets: Direct sales: Retail fueling (a) $ 460.9 $ — $ 460.9 Industrial & Manufacturing 175.4 97.2 78.2 Vehicle repair (a) 137.7 — 137.7 Utilities & Power 46.6 46.0 0.6 Other 541.4 331.8 209.6 Total direct sales 1,362.0 475.0 887.0 Distributors (a) 494.0 414.0 80.0 Total $ 1,856.0 $ 889.0 $ 967.0 (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 June 29, 2018 was $858.4 million. Disaggregation of revenue for the three months ended June 30, 2017 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 888.9 $ 353.7 $ 535.2 China 134.2 91.9 42.3 Germany 71.7 27.5 44.2 All other (each country individually less than 5% of total sales) 534.0 285.9 248.1 Total $ 1,628.8 $ 759.0 $ 869.8 Major Products Group: Professional tools and equipment $ 1,055.0 $ 593.3 $ 461.7 Industrial automation, controls and sensors 305.6 98.5 207.1 Franchise distribution 149.5 — 149.5 All other 118.7 67.2 51.5 Total $ 1,628.8 $ 759.0 $ 869.8 End markets: Direct sales: Retail fueling (a) $ 401.5 $ — $ 401.5 Industrial & Manufacturing 103.6 57.5 46.1 Vehicle repair (a) 135.6 — 135.6 Utilities & Power 59.3 57.9 1.4 Other 498.7 288.2 210.5 Total direct sales 1,198.7 403.6 795.1 Distributors (a) 430.1 355.4 74.7 Total $ 1,628.8 $ 759.0 $ 869.8 (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 June 30, 2017 was $774.2 million. Disaggregation of revenue for the six months ended June 29, 2018 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 1,910.3 $ 844.3 $ 1,066.0 China 318.1 209.3 108.8 Germany 170.8 67.9 102.9 All other (each country individually less than 5% of total sales) 1,197.5 639.2 558.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 Major Products Group: Professional tools and equipment $ 2,366.0 $ 1,426.3 $ 939.7 Industrial automation, controls and sensors 661.3 209.4 451.9 Franchise distribution 325.1 — 325.1 All other 244.3 125.0 119.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 End markets: Direct sales: Retail fueling (a) $ 809.6 $ — $ 809.6 Industrial & Manufacturing 331.6 187.8 143.8 Vehicle repair (a) 296.4 — 296.4 Utilities & Power 102.7 101.5 1.2 Other 1,059.3 632.6 426.7 Total direct sales 2,599.6 921.9 1,677.7 Distributors (a) 997.1 838.8 158.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 (a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the six months ended June 29, 2018 was $1,647.3 million. Disaggregation of revenue for the six months ended June 30, 2017 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 1,735.7 $ 684.1 $ 1,051.6 China 264.1 182.4 81.7 Germany 141.3 56.2 85.1 All other (each country individually less than 5% of total sales) 1,022.9 552.4 470.5 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 Major Products Group: Professional tools and equipment $ 2,016.6 $ 1,151.9 $ 864.7 Industrial automation, controls and sensors 596.3 194.6 401.7 Franchise distribution 321.2 — 321.2 All other 229.9 128.6 101.3 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 End markets: Direct sales: Retail fueling (a) $ 748.0 $ — $ 748.0 Industrial & Manufacturing 213.5 122.6 90.9 Vehicle repair (a) 293.5 — 293.5 Utilities & Power 111.9 109.6 2.3 Other 959.2 549.9 409.3 Total direct sales 2,326.1 782.1 1,544.0 Distributors (a) 837.9 693.0 144.9 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 (a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the six months ended June 30, 2017 was $1,521.1 million. |
Pension Plans
Pension Plans | 6 Months Ended |
Jun. 29, 2018 | |
Retirement Benefits [Abstract] | |
Pension Plans | NOTE 7. PENSION PLANS For a full description of our noncontributory defined benefit pension plans, including the U.S. plan acquired in 2017, refer to Note 10 of our 2017 Annual Report on Form 10-K . The following sets forth the components of our net periodic pension costs associated with our noncontributory defined benefit pension plans ($ in millions): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 U.S. Pension Benefits: Interest cost $ 0.3 $ — $ 0.6 $ — Expected return on plan assets (0.3 ) — (0.7 ) — Net periodic pension cost $ — $ — $ (0.1 ) $ — Non-U.S. Pension Benefits: Service cost $ 0.4 $ 1.0 $ 0.9 $ 2.0 Interest cost 1.5 1.5 3.0 2.9 Expected return on plan assets (1.8 ) (1.8 ) (3.7 ) (3.6 ) Amortization of net loss 0.9 1.1 1.8 2.2 Net curtailment and settlement loss recognized 0.6 — 0.6 — Net periodic pension cost $ 1.6 $ 1.8 $ 2.6 $ 3.5 On January 1, 2018, we retrospectively adopted ASU No. 2017-07, Compensation–Retirement Benefits (Topic 715). Accordingly, we have included 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 continue to be included 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. This reclassification of prior year pension cost increased operating income by $0.8 million and $1.5 million for the three and six months ended June 30, 2017 , respectively. Employer Contributions During 2018 , our cash contribution requirements for our non-U.S. defined benefit pension plans are expected to be approximately $10 million . We do not expect to make contributions to the U.S. plan during 2018 . 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
Income Taxes | 6 Months Ended |
Jun. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8. INCOME TAXES Our effective tax rates for the three and six months ended June 29, 2018 were 17.1% and 16.8% , respectively, as compared to 26.3% and 26.4% for the three and six months ended June 30, 2017 , respectively. The decrease for both the three and six month periods is due primarily to favorable impacts in 2018 resulting from a lower statutory tax rate in the United States and foreign-derived intangible income tax benefits, partially offset by the loss of the United States domestic production activities deduction, all of which are a result of the Tax Cuts and Jobs Act (“TCJA”), and other federal and international tax benefits. Our effective tax rates for 2018 and 2017 differ from the U.S. federal statutory rate of 21% and 35% , respectively, due primarily to our earnings outside the United States that are indefinitely reinvested and taxed at rates lower than the U.S. federal statutory rate, the impact of credits and deductions provided by law and the effect of favorable adjustments to the provisional estimates recorded in 2017 related to the TCJA as permitted under SEC Staff Accounting Bulletin No. 118 (“SAB 118”). We recorded an adjustment of $1.9 million to our provisional estimates during the three months ended June 29, 2018 , which decreased tax expense and decreased our effective tax rate by 50 basis points, and was attributable to transition taxes, specifically from a decrease in foreign remittance taxes. We recorded an adjustment of $6.1 million to our provisional estimates during the six months ended June 29, 2018 , which decreased tax expense and decreased our effective tax rate by 90 basis points, and was related to a $15.1 million decrease from revaluation of certain deferred tax assets and liabilities, a $1.9 million decrease related to transition taxes, specifically from decrease in foreign remittance taxes, and an offsetting $10.9 million increase from a reduction of foreign tax credits. We will continue to evaluate the effects of the TCJA on the 2017 provisional estimates through the end of the SAB 118 allowable measurement period. Refer to Note 11 of our 2017 Annual Report on Form 10-K for further details including disclosures pursuant to SAB 118 interpretive guidance, and provisional estimates for all TCJA effects. On January 1, 2018, we adopted ASU No. 2016-16, Income Taxes (Topic 715): Intra-entity Transfers of Assets Other Than Inventory using the modified retrospective method , and recorded an immaterial adjustment to opening retained earnings as of January 1, 2018. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | NOTE 9. STOCK-BASED COMPENSATION Our stock-based compensation program (the “Stock Plan”) provides for the grant of stock appreciation rights, performance stock units, restricted stock units, restricted stock awards and performance stock awards (collectively, “Stock Awards”), stock options or any other stock-based award. As of June 29, 2018 , approximately 22 million shares of our common stock were available for subsequent issuance under the Stock Plan. For a full description of our stock-based compensation program refer to Note 15 of our 2017 Annual Report on Form 10-K . Stock-based Compensation Expense Stock-based compensation has been recognized as a component of selling, general & administrative expenses in the accompanying Consolidated Condensed Statements of Earnings based on the portion of the awards that are ultimately expected to vest. The following summarizes the components of our stock-based compensation expense under the Stock Plan ($ in millions): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Stock Awards: Pretax compensation expense $ 8.5 $ 8.0 $ 15.6 $ 15.4 Income tax benefit (1.8 ) (3.1 ) (3.3 ) (5.6 ) Stock Award expense, net of income taxes 6.7 4.9 12.3 9.8 Stock options: Pretax compensation expense 6.1 5.3 10.9 9.9 Income tax benefit (1.3 ) (1.8 ) (2.3 ) (3.4 ) Stock option expense, net of income taxes 4.8 3.5 8.6 6.5 Total stock-based compensation: Pretax compensation expense 14.6 13.3 26.5 25.3 Income tax benefit (3.1 ) (4.9 ) (5.6 ) (9.0 ) Total stock-based compensation expense, net of income taxes $ 11.5 $ 8.4 $ 20.9 $ 16.3 The following summarizes the unrecognized compensation cost for the Stock Plan awards as of June 29, 2018 . 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): Stock Awards $ 59.6 Stock options 56.0 Total unrecognized compensation cost $ 115.6 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10. COMMITMENTS AND CONTINGENCIES For a description of our litigation and contingencies, refer to Notes 13 and 14 of our 2017 Annual Report on Form 10-K . Our operating leases extend for varying periods of time up to twenty years and, in some cases, contain renewal options that would extend existing terms beyond twenty years. Minimum rental payments for all operating leases having initial or remaining noncancelable lease terms in excess of one year for 2018 through 2022 and thereafter are: $48 million in 2018, $42 million in 2019, $31 million in 2020, $20 million in 2021, $16 million in 2022 and $20 million thereafter. We generally accrue estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. The following is a rollforward of our accrued warranty liability ($ in millions): Balance, December 31, 2017 $ 69.4 Accruals for warranties issued during the period 37.2 Settlements made (39.4 ) Effect of foreign currency translation (0.2 ) Balance, June 29, 2018 $ 67.0 |
Net Earnings Per Share
Net Earnings Per Share | 6 Months Ended |
Jun. 29, 2018 | |
Earnings Per Share [Abstract] | |
Net Earnings Per Share | NOTE 11. 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 1.5 million anti-dilutive options to purchase shares excluded from the diluted EPS calculation for both the three and six months ended June 29, 2018 . The anti-dilutive options to purchase shares excluded from the diluted EPS calculation were immaterial for the three and six months ended June 30, 2017 . The dilutive impact from our MCPS issued on June 29, 2018 is calculated under the if-converted method. 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): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Numerator Net earnings $ 295.0 $ 240.1 $ 556.2 $ 439.8 Mandatory convertible preferred stock cumulative dividends (0.2 ) — (0.2 ) — Net earnings attributable to common stockholders $ 294.8 $ 240.1 $ 556.0 $ 439.8 Denominator Weighted average common shares outstanding used in basic earnings per share 349.2 347.2 348.9 347.1 Incremental common shares from: Assumed exercise of dilutive options and vesting of dilutive Stock Awards 5.6 5.0 5.7 4.7 Assumed conversion of outstanding mandatory convertible preferred stock 0.2 — 0.1 — Weighted average common shares outstanding used in diluted earnings per share 355.0 352.2 354.7 351.8 Net earnings per common share - Basic $ 0.84 $ 0.69 $ 1.59 $ 1.27 Net earnings per share - Diluted $ 0.83 $ 0.68 $ 1.57 $ 1.25 We declared and paid cash dividends per share during the periods presented as follows: Dividend Per Common Share Amount ($ in millions) 2018: First quarter $ 0.07 $ 24.3 Second quarter 0.07 24.4 Total $ 0.14 $ 48.7 2017: First quarter $ 0.07 $ 24.3 Second quarter 0.07 24.3 Total $ 0.14 $ 48.6 As of June 29, 2018, no dividends have been declared on our MCPS. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 29, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12. 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. As of June 29, 2018 , there have been no material changes in total assets or liabilities by segment since December 31, 2017 . Segment results are shown below ($ in millions): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Sales: Professional Instrumentation $ 889.0 $ 759.0 $ 1,760.7 $ 1,475.1 Industrial Technologies 967.0 869.8 1,836.0 1,688.9 Total $ 1,856.0 $ 1,628.8 $ 3,596.7 $ 3,164.0 Operating Profit: Professional Instrumentation $ 219.4 $ 185.5 $ 425.8 $ 344.0 Industrial Technologies 200.9 181.7 359.2 334.5 Other (37.9 ) (18.1 ) (64.4 ) (33.8 ) Total Operating Profit 382.4 349.1 720.6 644.7 Interest expense (25.3 ) (22.7 ) (49.9 ) (45.3 ) Other non-operating expenses (1.1 ) (0.8 ) (1.8 ) (1.5 ) Earnings before income taxes $ 356.0 $ 325.6 $ 668.9 $ 597.9 |
Business Overview and Basis o21
Business Overview and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New 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. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. The standard also requires lessees and lessors to disclose the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from the current standard. This standard is effective for us beginning January 1, 2019 (with early adoption permitted) using a modified retrospective transition approach and provides for certain practical expedients. In September 2017, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which provided additional implementation guidance on the previously issued ASU. We are in the process of assessing the impact of the standard and designing related internal control procedures. Based on our efforts to date, we expect the recognition of the right-of-use asset and lease liability for our real estate and equipment leases will have a material impact on the Consolidated Balance Sheets. We do not expect this standard to have a material impact on our future Consolidated Statements of Earnings. |
Sales (Policies)
Sales (Policies) | 6 Months Ended |
Jun. 29, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition —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. For revenue related to a product or service to qualify for recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services. Further, collection of substantially all consideration for the goods or services transferred must be probable based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a combination of financial and qualitative factors, including the customers’ financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information. Customer allowances and rebates, consisting primarily of volume discounts and other short-term incentive programs, are considered in determining the transaction price for the contract; these allowances and rebates are reflected as a reduction in the contract transaction price. Significant judgment is exercised in determining product returns, customer allowances and rebates, and are estimated based on historical experience and known trends. Most of our sales contracts contain standard terms and conditions. We evaluate contracts to identify distinct goods and services promised in the contract (performance obligations). Sometimes this evaluation involves judgment to determine whether the goods or services are highly dependent on or highly interrelated with one another, or whether such goods or services significantly modify or customize one another. Certain customer arrangements include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post contract support (“PCS”). Generally, these elements are delivered within the same reporting period, except PCS or other services. We allocate the contract transaction price to each performance obligation using the observable price that the good or service sells for separately in similar circumstances and to similar customers, and/or a residual approach when the observable selling price of a good or service is not known and is either highly variable or uncertain. Allocating the transaction price to each performance obligation sometimes requires significant judgment. Our principal terms of sale are FOB Shipping Point, or equivalent, and, as such, we primarily record revenue upon shipment as we have transferred control to the customer at that point and our performance obligations are satisfied. We evaluate contracts with delivery terms other than FOB Shipping Point and recognize revenue when we have transfered control and satisfied our performance obligations. If any significant obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation, other services noted above or acceptance by the customer), revenue recognition is deferred until such obligations have been fulfilled. Further, revenue related to separately priced extended warranty and product maintenance agreements is deferred when appropriate and recognized as revenue over the term of the agreement. |
Contract Assets | 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. 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 Costs | Contract Costs — We incur direct incremental costs to obtain certain contracts, typically sales-related commissions. Deferred sales-related commissions are generally not capitalized as the amortization period is one year or less, and we elected to use the practical expedient to expense these sales commissions as incurred. |
Remaining Performance Obligation | 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 June 29, 2018 , 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 and Basis o23
Business Overview and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassification of Accumulated Other Comprehensive Income | 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. The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions): Foreign currency translation adjustments Pension adjustments Total For the Three Months Ended June 29, 2018: Balance, March 30, 2018 $ 100.4 $ (70.9 ) $ 29.5 Other comprehensive income (loss) before reclassifications, net of income taxes (99.8 ) — (99.8 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 0.9 (a) 0.9 Income tax impact — (0.2 ) (0.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 0.7 0.7 Net current period other comprehensive income (loss), net of income taxes (99.8 ) 0.7 (99.1 ) Balance, June 29, 2018 $ 0.6 $ (70.2 ) $ (69.6 ) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details). Foreign currency translation adjustments Pension Total For the Three Months Ended June 30, 2017: Balance, March 31, 2017 $ (29.0 ) $ (72.4 ) $ (101.4 ) Other comprehensive income (loss) before reclassifications, net of income taxes 45.2 — 45.2 Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.1 (a) 1.1 Income tax impact — (0.2 ) (0.2 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 0.9 0.9 Net current period other comprehensive income (loss), net of income taxes 45.2 0.9 46.1 Balance, June 30, 2017 $ 16.2 $ (71.5 ) $ (55.3 ) For the Six Months Ended June 29, 2018: Balance, December 31, 2017 $ 64.0 $ (71.6 ) $ (7.6 ) Other comprehensive income (loss) before reclassifications, net of income taxes (63.4 ) — (63.4 ) Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 1.8 (a) 1.8 Income tax impact — (0.4 ) (0.4 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.4 1.4 Net current period other comprehensive income (loss) (63.4 ) 1.4 (62.0 ) Balance, June 29, 2018 $ 0.6 $ (70.2 ) $ (69.6 ) For the Six Months Ended June 30, 2017: Balance, December 31, 2016 $ (72.6 ) $ (73.2 ) $ (145.8 ) Other comprehensive income (loss) before reclassifications, net of income taxes 88.8 — 88.8 Amounts reclassified from accumulated other comprehensive income (loss): Increase (decrease) — 2.2 (a) 2.2 Income tax impact — (0.5 ) (0.5 ) Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes — 1.7 1.7 Net current period other comprehensive income (loss) 88.8 1.7 90.5 Balance, June 30, 2017 $ 16.2 $ (71.5 ) $ (55.3 ) (a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details). |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following is a rollforward of our goodwill ($ in millions): Balance, December 31, 2017 $ 5,098.5 Attributable to 2018 acquisitions 1.8 Foreign currency translation & other (18.4 ) Balance, June 29, 2018 $ 5,081.9 The carrying value of goodwill by segment is summarized as follows ($ in millions): June 29, 2018 December 31, 2017 Professional Instrumentation $ 3,321.1 $ 3,331.0 Industrial Technologies 1,760.8 1,767.5 Total goodwill $ 5,081.9 $ 5,098.5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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): Quoted Prices in Active Market (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total June 29, 2018 Deferred compensation liabilities $ — $ 21.7 $ — $ 21.7 December 31, 2017 Deferred compensation liabilities $ — $ 20.9 $ — $ 20.9 |
Carrying Amounts and Fair Values of Financial Instruments | The carrying amount and fair value of financial instruments are as follows ($ in millions): June 29, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Current portion of long-term debt $ 799.3 $ 796.4 $ — $ — Long-term debt, net of current maturities $ 2,927.4 $ 2,823.9 $ 4,056.2 $ 4,051.8 |
Financing and Capital (Tables)
Financing and Capital (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Carry Value of Debt | The details of our Commercial Paper Programs as of June 29, 2018 are as follows ($ in millions): Carrying value Annual effective rate Weighted average remaining maturity (in days) U.S. dollar-denominated commercial paper $ 339.8 2.39 % 9 Euro-denominated commercial paper $ 275.2 (0.10 )% 76 The carrying value of the components of our long-term debt were as follows ($ in millions): June 29, 2018 December 31, 2017 U.S. dollar-denominated commercial paper $ 339.8 $ 665.1 Euro-denominated commercial paper 275.2 282.7 U.S. dollar variable interest rate term loan due 2019 500.0 500.0 Yen variable interest rate term loan due 2022 124.5 122.4 1.80% senior unsecured notes due 2019 299.3 298.9 2.35% senior unsecured notes due 2021 746.5 745.9 3.15% senior unsecured notes due 2026 891.5 891.0 4.30% senior unsecured notes due 2046 546.8 546.8 Other long-term debt 3.1 3.4 Long-term debt 3,726.7 4,056.2 Less: current portion of long-term debt 799.3 — Long-term debt, net of current maturities $ 2,927.4 $ 4,056.2 |
Sales (Tables)
Sales (Tables) | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Revenue Recognition [Abstract] | ||||
Contract liabilities | Our contract liabilities consisted of the following ($ in millions): June 29, 2018 December 31, 2017 Deferred revenue - current $ 210.5 $ 213.4 Deferred revenue - noncurrent 91.8 86.9 Total contract liabilities $ 302.3 $ 300.3 | |||
Remaining performance obligations | The aggregate performance obligations attributable to each of our segments is as follows ($ in millions): June 29, 2018 Professional Instrumentation $ 117.0 Industrial Technologies 453.2 Total $ 570.2 | |||
Disaggregation of revenue | Disaggregation of revenue for the three months ended June 29, 2018 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 993.5 $ 435.9 $ 557.6 China 161.7 101.0 60.7 Germany 84.3 32.0 52.3 All other (each country individually less than 5% of total sales) 616.5 320.1 296.4 Total $ 1,856.0 $ 889.0 $ 967.0 Major Products Group: Professional tools and equipment $ 1,245.9 $ 719.8 $ 526.1 Industrial automation, controls and sensors 333.5 104.8 228.7 Franchise distribution 152.2 — 152.2 All other 124.4 64.4 60.0 Total $ 1,856.0 $ 889.0 $ 967.0 End markets: Direct sales: Retail fueling (a) $ 460.9 $ — $ 460.9 Industrial & Manufacturing 175.4 97.2 78.2 Vehicle repair (a) 137.7 — 137.7 Utilities & Power 46.6 46.0 0.6 Other 541.4 331.8 209.6 Total direct sales 1,362.0 475.0 887.0 Distributors (a) 494.0 414.0 80.0 Total $ 1,856.0 $ 889.0 $ 967.0 (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 June 29, 2018 was $858.4 million. | Disaggregation of revenue for the three months ended June 30, 2017 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 888.9 $ 353.7 $ 535.2 China 134.2 91.9 42.3 Germany 71.7 27.5 44.2 All other (each country individually less than 5% of total sales) 534.0 285.9 248.1 Total $ 1,628.8 $ 759.0 $ 869.8 Major Products Group: Professional tools and equipment $ 1,055.0 $ 593.3 $ 461.7 Industrial automation, controls and sensors 305.6 98.5 207.1 Franchise distribution 149.5 — 149.5 All other 118.7 67.2 51.5 Total $ 1,628.8 $ 759.0 $ 869.8 End markets: Direct sales: Retail fueling (a) $ 401.5 $ — $ 401.5 Industrial & Manufacturing 103.6 57.5 46.1 Vehicle repair (a) 135.6 — 135.6 Utilities & Power 59.3 57.9 1.4 Other 498.7 288.2 210.5 Total direct sales 1,198.7 403.6 795.1 Distributors (a) 430.1 355.4 74.7 Total $ 1,628.8 $ 759.0 $ 869.8 (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 June 30, 2017 was $774.2 million. | Disaggregation of revenue for the six months ended June 29, 2018 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 1,910.3 $ 844.3 $ 1,066.0 China 318.1 209.3 108.8 Germany 170.8 67.9 102.9 All other (each country individually less than 5% of total sales) 1,197.5 639.2 558.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 Major Products Group: Professional tools and equipment $ 2,366.0 $ 1,426.3 $ 939.7 Industrial automation, controls and sensors 661.3 209.4 451.9 Franchise distribution 325.1 — 325.1 All other 244.3 125.0 119.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 End markets: Direct sales: Retail fueling (a) $ 809.6 $ — $ 809.6 Industrial & Manufacturing 331.6 187.8 143.8 Vehicle repair (a) 296.4 — 296.4 Utilities & Power 102.7 101.5 1.2 Other 1,059.3 632.6 426.7 Total direct sales 2,599.6 921.9 1,677.7 Distributors (a) 997.1 838.8 158.3 Total $ 3,596.7 $ 1,760.7 $ 1,836.0 (a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the six months ended June 29, 2018 was $1,647.3 million. | Disaggregation of revenue for the six months ended June 30, 2017 is presented as follows ($ in millions): Total Professional Instrumentation Industrial Technologies Geographic: United States $ 1,735.7 $ 684.1 $ 1,051.6 China 264.1 182.4 81.7 Germany 141.3 56.2 85.1 All other (each country individually less than 5% of total sales) 1,022.9 552.4 470.5 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 Major Products Group: Professional tools and equipment $ 2,016.6 $ 1,151.9 $ 864.7 Industrial automation, controls and sensors 596.3 194.6 401.7 Franchise distribution 321.2 — 321.2 All other 229.9 128.6 101.3 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 End markets: Direct sales: Retail fueling (a) $ 748.0 $ — $ 748.0 Industrial & Manufacturing 213.5 122.6 90.9 Vehicle repair (a) 293.5 — 293.5 Utilities & Power 111.9 109.6 2.3 Other 959.2 549.9 409.3 Total direct sales 2,326.1 782.1 1,544.0 Distributors (a) 837.9 693.0 144.9 Total $ 3,164.0 $ 1,475.1 $ 1,688.9 (a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the six months ended June 30, 2017 was $1,521.1 million. |
Pension Plans (Tables)
Pension Plans (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Pension Costs | The following sets forth the components of our net periodic pension costs associated with our noncontributory defined benefit pension plans ($ in millions): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 U.S. Pension Benefits: Interest cost $ 0.3 $ — $ 0.6 $ — Expected return on plan assets (0.3 ) — (0.7 ) — Net periodic pension cost $ — $ — $ (0.1 ) $ — Non-U.S. Pension Benefits: Service cost $ 0.4 $ 1.0 $ 0.9 $ 2.0 Interest cost 1.5 1.5 3.0 2.9 Expected return on plan assets (1.8 ) (1.8 ) (3.7 ) (3.6 ) Amortization of net loss 0.9 1.1 1.8 2.2 Net curtailment and settlement loss recognized 0.6 — 0.6 — Net periodic pension cost $ 1.6 $ 1.8 $ 2.6 $ 3.5 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Stock Awards: Pretax compensation expense $ 8.5 $ 8.0 $ 15.6 $ 15.4 Income tax benefit (1.8 ) (3.1 ) (3.3 ) (5.6 ) Stock Award expense, net of income taxes 6.7 4.9 12.3 9.8 Stock options: Pretax compensation expense 6.1 5.3 10.9 9.9 Income tax benefit (1.3 ) (1.8 ) (2.3 ) (3.4 ) Stock option expense, net of income taxes 4.8 3.5 8.6 6.5 Total stock-based compensation: Pretax compensation expense 14.6 13.3 26.5 25.3 Income tax benefit (3.1 ) (4.9 ) (5.6 ) (9.0 ) Total stock-based compensation expense, net of income taxes $ 11.5 $ 8.4 $ 20.9 $ 16.3 |
Schedule of Future Compensation | Future compensation amounts will be adjusted for any changes in estimated forfeitures ($ in millions): Stock Awards $ 59.6 Stock options 56.0 Total unrecognized compensation cost $ 115.6 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Accrued Warranty Liability | The following is a rollforward of our accrued warranty liability ($ in millions): Balance, December 31, 2017 $ 69.4 Accruals for warranties issued during the period 37.2 Settlements made (39.4 ) Effect of foreign currency translation (0.2 ) Balance, June 29, 2018 $ 67.0 |
Net Earnings Per Share (Tables)
Net Earnings Per Share (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
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): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Numerator Net earnings $ 295.0 $ 240.1 $ 556.2 $ 439.8 Mandatory convertible preferred stock cumulative dividends (0.2 ) — (0.2 ) — Net earnings attributable to common stockholders $ 294.8 $ 240.1 $ 556.0 $ 439.8 Denominator Weighted average common shares outstanding used in basic earnings per share 349.2 347.2 348.9 347.1 Incremental common shares from: Assumed exercise of dilutive options and vesting of dilutive Stock Awards 5.6 5.0 5.7 4.7 Assumed conversion of outstanding mandatory convertible preferred stock 0.2 — 0.1 — Weighted average common shares outstanding used in diluted earnings per share 355.0 352.2 354.7 351.8 Net earnings per common share - Basic $ 0.84 $ 0.69 $ 1.59 $ 1.27 Net earnings per share - Diluted $ 0.83 $ 0.68 $ 1.57 $ 1.25 |
Dividends Declared [Table Text Block] | We declared and paid cash dividends per share during the periods presented as follows: Dividend Per Common Share Amount ($ in millions) 2018: First quarter $ 0.07 $ 24.3 Second quarter 0.07 24.4 Total $ 0.14 $ 48.7 2017: First quarter $ 0.07 $ 24.3 Second quarter 0.07 24.3 Total $ 0.14 $ 48.6 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Segment results are shown below ($ in millions): Three Months Ended Six Months Ended June 29, 2018 June 30, 2017 June 29, 2018 June 30, 2017 Sales: Professional Instrumentation $ 889.0 $ 759.0 $ 1,760.7 $ 1,475.1 Industrial Technologies 967.0 869.8 1,836.0 1,688.9 Total $ 1,856.0 $ 1,628.8 $ 3,596.7 $ 3,164.0 Operating Profit: Professional Instrumentation $ 219.4 $ 185.5 $ 425.8 $ 344.0 Industrial Technologies 200.9 181.7 359.2 334.5 Other (37.9 ) (18.1 ) (64.4 ) (33.8 ) Total Operating Profit 382.4 349.1 720.6 644.7 Interest expense (25.3 ) (22.7 ) (49.9 ) (45.3 ) Other non-operating expenses (1.1 ) (0.8 ) (1.8 ) (1.5 ) Earnings before income taxes $ 356.0 $ 325.6 $ 668.9 $ 597.9 |
Business Overview and Basis o33
Business Overview and Basis of Presentation Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Equity, beginning of period | $ (7.6) | ||||
Amounts reclassified from accumulated other comprehensive income (loss): | |||||
Total other comprehensive income, net of income taxes | $ (99.1) | $ 46.1 | (62) | $ 90.5 | |
Equity, end of period | (69.6) | (69.6) | |||
Foreign currency translation adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Equity, beginning of period | 100.4 | (29) | 64 | (72.6) | |
Other comprehensive income (loss) before reclassifications, net of income taxes | (99.8) | 45.2 | (63.4) | 88.8 | |
Amounts reclassified from accumulated other comprehensive income (loss): | |||||
Increase (decrease) | 0 | 0 | 0 | 0 | |
Income tax impact | 0 | 0 | 0 | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 0 | 0 | 0 | 0 | |
Total other comprehensive income, net of income taxes | (99.8) | 45.2 | (63.4) | 88.8 | |
Equity, end of period | 0.6 | 16.2 | 0.6 | 16.2 | |
Pension adjustments | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Equity, beginning of period | (70.9) | (72.4) | (71.6) | (73.2) | |
Other comprehensive income (loss) before reclassifications, net of income taxes | 0 | 0 | 0 | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss): | |||||
Increase (decrease) | [1] | 0.9 | 1.1 | 1.8 | 2.2 |
Income tax impact | (0.2) | (0.2) | (0.4) | (0.5) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 0.7 | 0.9 | 1.4 | 1.7 | |
Total other comprehensive income, net of income taxes | 0.7 | 0.9 | 1.4 | 1.7 | |
Equity, end of period | (70.2) | (71.5) | (70.2) | (71.5) | |
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Equity, beginning of period | 29.5 | (101.4) | (7.6) | (145.8) | |
Other comprehensive income (loss) before reclassifications, net of income taxes | (99.8) | 45.2 | (63.4) | 88.8 | |
Amounts reclassified from accumulated other comprehensive income (loss): | |||||
Increase (decrease) | 0.9 | 1.1 | 1.8 | 2.2 | |
Income tax impact | (0.2) | (0.2) | (0.4) | (0.5) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes | 0.7 | 0.9 | 1.4 | 1.7 | |
Total other comprehensive income, net of income taxes | (99.1) | 46.1 | (62) | 90.5 | |
Equity, end of period | $ (69.6) | $ (55.3) | $ (69.6) | $ (55.3) | |
[1] | This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details). |
Acquisitions and Divestitures P
Acquisitions and Divestitures Pending Acquisitions (Details) - USD ($) $ in Millions | Jul. 02, 2018 | Jun. 06, 2018 |
Acquisitions, ASP [Member] | ||
Business Acquisition [Line Items] | ||
Pending acquisition purchase price | $ 2,700 | |
Subsequent Event [Member] | Acquisitions, Gordian [Member] | ||
Business Acquisition [Line Items] | ||
Pending acquisition purchase price | $ 775 |
Acquisitions and Divestitures35
Acquisitions and Divestitures Planned Divestiture (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 07, 2018 | |
Noncash or Part Noncash Divestitures [Line Items] | ||||||
Sales | $ 1,856 | $ 1,628.8 | $ 3,596.7 | $ 3,164 | ||
A&S Business [Member] | ||||||
Noncash or Part Noncash Divestitures [Line Items] | ||||||
Merger Agreement, Consideration | $ 1,400 | |||||
Merger Agreement, Consideration, Number of Shares | 35 | |||||
Merger Agreement, Percentage of Investment Ownership | 54.00% | |||||
Sales | $ 907 |
Goodwill Rollforward of Goodwil
Goodwill Rollforward of Goodwill (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance, December 31, 2017 | $ 5,098.5 |
Attributable to 2018 acquisitions | 1.8 |
Foreign currency translation & other | (18.4) |
Balance, June 29, 2018 | $ 5,081.9 |
Goodwill Goodwill by Segment (D
Goodwill Goodwill by Segment (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | ||
Goodwill | $ 5,081.9 | $ 5,098.5 |
Professional Instrumentation | ||
Goodwill [Line Items] | ||
Goodwill | 3,321.1 | 3,331 |
Industrial Technologies | ||
Goodwill [Line Items] | ||
Goodwill | $ 1,760.8 | $ 1,767.5 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | $ 21.7 | $ 20.9 |
Current portion of long-term debt, carrying amount | 799.3 | 0 |
Current portion of long-term debt, fair value | 796.4 | 0 |
Long-term debt, carrying value | 2,927.4 | 4,056.2 |
Long-term debt, fair value | 2,823.9 | 4,051.8 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Market (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | 21.7 | 20.9 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation liabilities | $ 0 | $ 0 |
Financing and Capital Component
Financing and Capital Components of Debt (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 3,726.7 | $ 4,056.2 |
Current portion of long-term debt | 799.3 | 0 |
Long-term debt, net of current maturities | 2,927.4 | 4,056.2 |
Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 3.1 | 3.4 |
Commercial Paper [Member] | US Dollar-Denominated Commercial Paper [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 339.8 | 665.1 |
Commercial Paper [Member] | Euro Denominated Commercial Paper [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 275.2 | 282.7 |
Senior Notes [Member] | Senior Unsecured Notes due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 299.3 | 298.9 |
Debt Instrument, Interest Rate, Stated Percentage | 1.80% | |
Senior Notes [Member] | Senior Unsecured Notes due 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 746.5 | 745.9 |
Debt Instrument, Interest Rate, Stated Percentage | 2.35% | |
Senior Notes [Member] | Senior Unsecured Notes due 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 891.5 | 891 |
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | |
Senior Notes [Member] | Senior Unsecured Notes due 2046 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 546.8 | 546.8 |
Debt Instrument, Interest Rate, Stated Percentage | 4.30% | |
U.S. dollar variable interest rate term loan due 2019 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 500 | 500 |
Yen variable interest rate term loan due 2022 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 124.5 | $ 122.4 |
Financing and Capital Narrative
Financing and Capital Narrative (Details) - USD ($) $ in Millions | Jul. 20, 2018 | Jun. 29, 2018 | Dec. 31, 2017 | Jun. 16, 2016 |
Debt Instrument [Line Items] | ||||
Debt discounts, premiums and issuance costs | $ 16.1 | $ 18.2 | ||
Carrying value | 3,726.7 | 4,056.2 | ||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,500 | |||
Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Carrying value | 500 | 500 | ||
US Dollar-Denominated Commercial Paper [Member] | Commercial Paper [Member] | ||||
Debt Instrument [Line Items] | ||||
Carrying value | $ 339.8 | 665.1 | ||
Annual effective rate | 2.39% | |||
Weighted average remaining maturity (in days) | 9 days | |||
Euro Denominated Commercial Paper [Member] | Commercial Paper [Member] | ||||
Debt Instrument [Line Items] | ||||
Carrying value | $ 275.2 | $ 282.7 | ||
Annual effective rate | (0.10%) | |||
Weighted average remaining maturity (in days) | 76 days | |||
Subsequent Event [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayments of Debt | $ 325 |
Financing and Capital Capital (
Financing and Capital Capital (Details) $ / shares in Units, $ in Millions | Oct. 01, 2018$ / shares | Jun. 29, 2018USD ($)$ / sharesshares | Sep. 28, 2018USD ($) | Jun. 29, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017$ / sharesshares |
Schedule of Capitalization [Line Items] | ||||||
Preferred stock issued (in shares) | 1,400,000 | 1,400,000 | 0 | |||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Proceeds from issuance of mandatory convertible preferred stock net of $36 million of issuance costs | $ | $ 1,338.2 | $ 0 | ||||
Payments of Stock Issuance Costs | $ | $ 36 | |||||
Preferred Stock | ||||||
Schedule of Capitalization [Line Items] | ||||||
Preferred stock issued (in shares) | 1,380,000 | 1,380,000 | ||||
Preferred Stock, Dividend Rate, Percentage | 5.00% | |||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 1,000 | $ 1,000 | ||||
Preferred Stock, Over-Allotment Shares Issued | 180,000 | 180,000 | ||||
Proceeds from issuance of mandatory convertible preferred stock net of $36 million of issuance costs | $ | $ 1,340 | |||||
Payments of Stock Issuance Costs | $ | $ 36 | |||||
Convertible Preferred Stock, Shares Issued upon Conversion | 10.8554 | 10.8554 | ||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 20 | |||||
Preferred Stock, Dividend Rate, Per-Dollar-Amount | $ / shares | $ 50 | |||||
Minimum [Member] | Preferred Stock | ||||||
Schedule of Capitalization [Line Items] | ||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 10.8554 | 10.8554 | ||||
Maximum [Member] | Preferred Stock | ||||||
Schedule of Capitalization [Line Items] | ||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 13.2979 | 13.2979 | ||||
Scenario, Forecast [Member] | Preferred Stock | ||||||
Schedule of Capitalization [Line Items] | ||||||
Payments of Stock Issuance Costs | $ | $ 1.5 | |||||
Preferred Stock, Dividends Per Share, Declared | $ / shares | $ 12.78 |
Sales Deferred revenue (Details
Sales Deferred revenue (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Dec. 31, 2017 |
Revenue Recognition [Abstract] | ||
Deferred revenue - current | $ 210.5 | $ 213.4 |
Deferred revenue - noncurrent | 91.8 | 86.9 |
Total contract liabilities | $ 302.3 | $ 300.3 |
Sales Revenue, Remaining Perfor
Sales Revenue, Remaining Performance Obligation (Details) $ in Millions | Jun. 29, 2018USD ($) |
Revenue, Remaining Performance Obligation [Line Items] | |
Remaining performance obligations | $ 570.2 |
Professional Instrumentation | Operating Segments | |
Revenue, Remaining Performance Obligation [Line Items] | |
Remaining performance obligations | 117 |
Industrial Technologies | Operating Segments | |
Revenue, Remaining Performance Obligation [Line Items] | |
Remaining performance obligations | $ 453.2 |
Sales Disaggregation of Revenue
Sales Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | $ 1,856 | $ 1,628.8 | $ 3,596.7 | $ 3,164 | ||||
UNITED STATES | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 993.5 | 888.9 | 1,910.3 | 1,735.7 | ||||
CHINA | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 161.7 | 134.2 | 318.1 | 264.1 | ||||
GERMANY | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 84.3 | 71.7 | 170.8 | 141.3 | ||||
All other (each country individually less than 5% of total sales) | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 616.5 | 534 | 1,197.5 | 1,022.9 | ||||
Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 889 | 759 | 1,760.7 | 1,475.1 | ||||
Operating Segments | Professional Instrumentation | UNITED STATES | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 435.9 | 353.7 | 844.3 | 684.1 | ||||
Operating Segments | Professional Instrumentation | CHINA | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 101 | 91.9 | 209.3 | 182.4 | ||||
Operating Segments | Professional Instrumentation | GERMANY | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 32 | 27.5 | 67.9 | 56.2 | ||||
Operating Segments | Professional Instrumentation | All other (each country individually less than 5% of total sales) | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 320.1 | 285.9 | 639.2 | 552.4 | ||||
Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 967 | 869.8 | 1,836 | 1,688.9 | ||||
Operating Segments | Industrial Technologies | UNITED STATES | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 557.6 | 535.2 | 1,066 | 1,051.6 | ||||
Operating Segments | Industrial Technologies | CHINA | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 60.7 | 42.3 | 108.8 | 81.7 | ||||
Operating Segments | Industrial Technologies | GERMANY | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 52.3 | 44.2 | 102.9 | 85.1 | ||||
Operating Segments | Industrial Technologies | All other (each country individually less than 5% of total sales) | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 296.4 | 248.1 | 558.3 | 470.5 | ||||
Professional Tools and Equipment [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 1,245.9 | 1,055 | 2,366 | 2,016.6 | ||||
Professional Tools and Equipment [Member] | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 719.8 | 593.3 | 1,426.3 | 1,151.9 | ||||
Professional Tools and Equipment [Member] | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 526.1 | 461.7 | 939.7 | 864.7 | ||||
Industrial Automation, Controls and Sensors [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 333.5 | 305.6 | 661.3 | 596.3 | ||||
Industrial Automation, Controls and Sensors [Member] | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 104.8 | 98.5 | 209.4 | 194.6 | ||||
Industrial Automation, Controls and Sensors [Member] | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 228.7 | 207.1 | 451.9 | 401.7 | ||||
Franchise Distribution [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 152.2 | 149.5 | 325.1 | 321.2 | ||||
Franchise Distribution [Member] | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 0 | 0 | 0 | 0 | ||||
Franchise Distribution [Member] | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 152.2 | 149.5 | 325.1 | 321.2 | ||||
All Other [Member] | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 124.4 | 118.7 | 244.3 | 229.9 | ||||
All Other [Member] | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 64.4 | 67.2 | 125 | 128.6 | ||||
All Other [Member] | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 60 | 51.5 | 119.3 | 101.3 | ||||
Retail fueling | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 460.9 | [1] | 401.5 | [2] | 809.6 | [3] | 748 | [4] |
Retail fueling | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 0 | [1] | 0 | [2] | 0 | [3] | 0 | [4] |
Retail fueling | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 460.9 | [1] | 401.5 | [2] | 809.6 | [3] | 748 | [4] |
Industrial & Manufacturing | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 175.4 | 103.6 | 331.6 | 213.5 | ||||
Industrial & Manufacturing | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 97.2 | 57.5 | 187.8 | 122.6 | ||||
Industrial & Manufacturing | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 78.2 | 46.1 | 143.8 | 90.9 | ||||
Vehicle repair | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 137.7 | [1] | 135.6 | [2] | 296.4 | [3] | 293.5 | [4] |
Vehicle repair | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 0 | [1] | 0 | [2] | 0 | [3] | 0 | [4] |
Vehicle repair | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 137.7 | [1] | 135.6 | [2] | 296.4 | [3] | 293.5 | [4] |
Utilities & Power | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 46.6 | 59.3 | 102.7 | 111.9 | ||||
Utilities & Power | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 46 | 57.9 | 101.5 | 109.6 | ||||
Utilities & Power | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 0.6 | 1.4 | 1.2 | 2.3 | ||||
Other | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 541.4 | 498.7 | 1,059.3 | 959.2 | ||||
Other | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 331.8 | 288.2 | 632.6 | 549.9 | ||||
Other | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 209.6 | 210.5 | 426.7 | 409.3 | ||||
Total direct sales | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 1,362 | 1,198.7 | 2,599.6 | 2,326.1 | ||||
Total direct sales | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 475 | 403.6 | 921.9 | 782.1 | ||||
Total direct sales | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 887 | 795.1 | 1,677.7 | 1,544 | ||||
Distributors | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 494 | [1] | 430.1 | [2] | 997.1 | [3] | 837.9 | [4] |
Distributors | Operating Segments | Professional Instrumentation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 414 | [1] | 355.4 | [2] | 838.8 | [3] | 693 | [4] |
Distributors | Operating Segments | Industrial Technologies | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | 80 | [1] | 74.7 | [2] | 158.3 | [3] | 144.9 | [4] |
Total Distributors | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Sales | $ 858.4 | $ 774.2 | $ 1,647.3 | $ 1,521.1 | ||||
[1] | (a) Retail fueling and vehicle repair includes sales to these end markets made through third party distributors. Total distributor sales for the three months ended June 29, 2018 was $858.4 million. | |||||||
[2] | (a) Retail fueling and vehicle repair includes sales to these end markets made through third party distributors. Total distributor sales for the three months ended June 30, 2017 was $774.2 million. | |||||||
[3] | (a) Retail fueling and vehicle repair include sales to these end markets made through third-party distributors. Total distributor sales for the six months ended June 29, 2018 was $1,647.3 million. | |||||||
[4] | (a) Retail fueling and vehicle repair includes sales to these end markets made through third party distributors. Total distributor sales for the six months ended June 30, 2017 was $1,521.1 million. |
Sales Narrative (Details)
Sales Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2018USD ($) | Jun. 29, 2018USD ($) | |
Revenue Recognition [Abstract] | ||
Recognized revenue from opening liability balance | $ 21 | $ 64 |
Revenue, Remaining Performance Obligation, Percentage Recognized in Year Two | 40.00% | 40.00% |
Revenue, Remaining Performance Obligation, Percentage Recognized in Year Three | 70.00% | 70.00% |
Pension Plans Components of Net
Pension Plans Components of Net Periodic Pension Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Domestic Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 0.3 | $ 0 | $ 0.6 | $ 0 |
Expected return on plan assets | (0.3) | 0 | (0.7) | 0 |
Net periodic pension cost | 0 | 0 | (0.1) | 0 |
Foreign Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.4 | 1 | 0.9 | 2 |
Interest cost | 1.5 | 1.5 | 3 | 2.9 |
Expected return on plan assets | (1.8) | (1.8) | (3.7) | (3.6) |
Amortization of net loss | 0.9 | 1.1 | 1.8 | 2.2 |
Net curtailment and settlement loss recognized | 0.6 | 0 | 0.6 | 0 |
Net periodic pension cost | $ 1.6 | $ 1.8 | $ 2.6 | $ 3.5 |
Pension Plans Narrative (Detail
Pension Plans Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Jun. 29, 2018 | |
Accounting Standards Update 2017-07 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 0.8 | $ 1.5 | |
Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected contributions | $ 10 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018USD ($) | Jun. 30, 2017 | Jun. 29, 2018USD ($) | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 17.10% | 26.30% | 16.80% | 26.40% |
U.S. federal statutory rate | 21.00% | 35.00% | ||
TCJA adjustments | $ 1.9 | $ 6.1 | ||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Adjustment, Income Tax Rate Impact | 50 | 90 | ||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Change in Tax Rate, Deferred Tax Assets and Liabilities, Provisional Income Tax Expense | $ 15.1 | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Transition Tax for Accumulated Foreign Earnings, Provisional Liability | 1.9 | |||
Tax Cuts and Jobs Act of 2017, Incomplete Accounting, Foreign Tax Credit, Provisional Liability | $ 10.9 |
Stock-Based Compensation Stock-
Stock-Based Compensation Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | $ 14.6 | $ 13.3 | $ 26.5 | $ 25.3 |
Income tax benefit | (3.1) | (4.9) | (5.6) | (9) |
Total stock-based compensation expense | 11.5 | 8.4 | 20.9 | 16.3 |
Stock Awards | ||||
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | 8.5 | 8 | 15.6 | 15.4 |
Income tax benefit | (1.8) | (3.1) | (3.3) | (5.6) |
Total stock-based compensation expense | 6.7 | 4.9 | 12.3 | 9.8 |
Stock Options | ||||
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pretax compensation expense | 6.1 | 5.3 | 10.9 | 9.9 |
Income tax benefit | (1.3) | (1.8) | (2.3) | (3.4) |
Total stock-based compensation expense | $ 4.8 | $ 3.5 | $ 8.6 | $ 6.5 |
Stock-Based Compensation Unreco
Stock-Based Compensation Unrecognized Compensation Cost (Details) $ in Millions | Jun. 29, 2018USD ($) |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 115.6 |
Stock Awards | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | 59.6 |
Stock Options | |
Stock-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 56 |
Stock-Based Compensation Narrat
Stock-Based Compensation Narrative (Details) shares in Millions | 6 Months Ended |
Jun. 29, 2018shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shares of common stock reserved for issuance under the Stock Plan | 22 |
Remaining service period related to the awards | 2 years |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 29, 2018USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance, December 31, 2017 | $ 69.4 |
Accruals for warranties issued during the period | 37.2 |
Settlements made | (39.4) |
Effect of foreign currency translation | (0.2) |
Balance, June 29, 2018 | $ 67 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Warranty Period | 90 days |
Commitments and Contingencies F
Commitments and Contingencies Future Minimum Lease Obligations (Details) $ in Millions | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 48 |
Operating Leases, Future Minimum Payments, Due in Two Years | 42 |
Operating Leases, Future Minimum Payments, Due in Three Years | 31 |
Operating Leases, Future Minimum Payments, Due in Four Years | 20 |
Operating Leases, Future Minimum Payments, Due in Five Years | 16 |
Operating Leases, Future Minimum Payments, Due Thereafter | $ 20 |
Maximum [Member] | |
Maximum lease period | 20 years |
Net Earnings Per Share Earnings
Net Earnings Per Share Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net earnings | $ 295 | $ 240.1 | $ 556.2 | $ 439.8 |
Mandatory convertible preferred stock cumulative dividends | (0.2) | 0 | (0.2) | 0 |
Net earnings attributable to common stockholders | $ 294.8 | $ 240.1 | $ 556 | $ 439.8 |
Weighted average common shares outstanding used in basic earnings per share | 349.2 | 347.2 | 348.9 | 347.1 |
Assumed exercise of dilutive options and vesting of dilutive Stock Awards | 5.6 | 5 | 5.7 | 4.7 |
Assumed conversion of outstanding mandatory convertible preferred stock | 0.2 | 0 | 0.1 | 0 |
Weighted average common shares outstanding used in diluted earnings per share | 355 | 352.2 | 354.7 | 351.8 |
Net earnings per common share, Basic | $ 0.84 | $ 0.69 | $ 1.59 | $ 1.27 |
Net earnings per share - Diluted | $ 0.83 | $ 0.68 | $ 1.57 | $ 1.25 |
Net Earnings Per Share Dividend
Net Earnings Per Share Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2018 | Mar. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Dividends Declared and Paid [Abstract] | ||||||
Dividend per Common Share | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.07 | $ 0.14 | $ 0.14 |
Amount ($ in millions) | $ 24.4 | $ 24.3 | $ 24.3 | $ 24.3 | $ 48.7 | $ 48.6 |
Net Earnings Per Share Narrativ
Net Earnings Per Share Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended |
Jun. 29, 2018 | Jun. 29, 2018 | |
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1.5 | 1.5 |
Segment Information Detailed Se
Segment Information Detailed Segment Data (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2018 | Jun. 30, 2017 | Jun. 29, 2018 | Jun. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,856 | $ 1,628.8 | $ 3,596.7 | $ 3,164 |
Operating Profit | 382.4 | 349.1 | 720.6 | 644.7 |
Earnings before income taxes | 356 | 325.6 | 668.9 | 597.9 |
Interest Expense | 25.3 | 22.7 | 49.9 | 45.3 |
Other Nonoperating Expense | 1.1 | 0.8 | 1.8 | 1.5 |
Operating Segments | Professional Instrumentation | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 889 | 759 | 1,760.7 | 1,475.1 |
Operating Profit | 219.4 | 185.5 | 425.8 | 344 |
Operating Segments | Industrial Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 967 | 869.8 | 1,836 | 1,688.9 |
Operating Profit | 200.9 | 181.7 | 359.2 | 334.5 |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Profit | $ (37.9) | $ (18.1) | $ (64.4) | $ (33.8) |
Segment Information Narrative (
Segment Information Narrative (Details) | 6 Months Ended |
Jun. 29, 2018 | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |