Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Illinois Tool Works Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Short-term debt	778)	350)	4)	1,351)	850)
Accounts payable	585)	534)	472)	524)	590)
Compensation and employee benefits	460)	335)	335)	391)	411)
Deferred revenue and customer deposits	394)	222)	188)	215)	205)
Rebates	209)	171)	159)	172)	147)
Current portion of operating lease liabilities	61)	55)	51)	—)	—)
Warranties	46)	45)	45)	45)	45)
Current portion of pension and other postretirement benefit obligations	14)	14)	14)	16)	16)
Other	464)	442)	425)	432)	434)
Accrued expenses	1,648)	1,284)	1,217)	1,271)	1,258)
Cash dividends payable	382)	361)	342)	328)	266)
Income taxes payable	77)	60)	48)	68)	89)
Liabilities held for sale	—)	—)	71)	—)	—)
Current liabilities	3,470)	2,589)	2,154)	3,542)	3,053)
Long-term debt	6,909)	7,772)	7,754)	6,029)	7,478)
Deferred income taxes	654)	588)	668)	707)	164)
Noncurrent income taxes payable	365)	413)	462)	495)	614)
Pension benefit obligation	235)	241)	215)	203)	219)
Postretirement benefit obligation	148)	191)	198)	179)	174)
Long-term portion of operating lease liabilities	133)	133)	128)	—)	—)
Other	537)	503)	459)	457)	489)
Other liabilities	1,053)	1,068)	1,000)	839)	882)
Noncurrent liabilities	8,981)	9,841)	9,884)	8,070)	9,138)
Total liabilities	12,451)	12,430)	12,038)	11,612)	12,191)
Common stock, par value of $0.01 per share	6)	6)	6)	6)	6)
Additional paid-in-capital	1,432)	1,362)	1,304)	1,253)	1,218)
Retained earnings	24,325)	23,114)	22,403)	21,217)	20,210)
Common stock held in treasury	(20,636)	(19,659)	(18,982)	(17,545)	(15,562)
Accumulated other comprehensive loss	(1,502)	(1,642)	(1,705)	(1,677)	(1,287)
Stockholders’ equity attributable to ITW	3,625)	3,181)	3,026)	3,254)	4,585)
Noncontrolling interest	1)	1)	4)	4)	4)
Total stockholders’ equity	3,626)	3,182)	3,030)	3,258)	4,589)
Total liabilities and stockholders’ equity	16,077)	15,612)	15,068)	14,870)	16,780)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Short-term debt: The short-term debt experienced significant volatility, increasing sharply from 850 million in 2017 to 1,351 million in 2018 before dramatically declining to 4 million in 2019. It then rose again to 350 million in 2020 and further to 778 million in 2021, indicating fluctuating short-term borrowing needs over the period.
Accounts payable: Accounts payable showed a steady decrease from 590 million in 2017 to 472 million in 2019, followed by a moderate recovery to 585 million by 2021, suggesting temporary reductions in supplier obligations with a return to prior levels afterward.
Compensation and employee benefits: Compensation and employee benefits declined from 411 million in 2017 to 335 million in 2019 and 2020, then returned to 460 million in 2021, reflecting possible cost management during the middle years with increased spending in the latest period.
Deferred revenue and customer deposits: Deferred revenue and customer deposits were relatively stable around 200 million from 2017 to 2020, but showed a notable increase to 394 million in 2021, indicating higher advance payments or customer deposits in the most recent year.
Rebates: Rebates fluctuated slightly but trended upward overall from 147 million in 2017 to 209 million in 2021, indicating an increase in incentive expenses over time.
Current portion of operating lease liabilities: The current portion appeared starting in 2019 at 51 million, rising gradually to 61 million in 2021, reflecting recognition of lease liabilities consistent with lease accounting standards introduced during this period.
Warranties: Warranty liabilities remained stable around 45 million across all years, indicating consistent warranty obligations.
Current portion of pension and other postretirement benefit obligations: This obligation exhibited minimal variation, holding steady near 14 to 16 million throughout the period.
Other current liabilities: Other current liabilities showed a gradual increase from 434 million in 2017 to 464 million in 2021, indicating a steady rise in miscellaneous obligations.
Accrued expenses: Accrued expenses were relatively stable between 1,217 million and 1,284 million from 2017 to 2020, but increased significantly to 1,648 million in 2021, suggesting growing short-term costs or liabilities accrued by year-end.
Cash dividends payable: Cash dividends payable steadily increased from 266 million in 2017 to 382 million in 2021, reflecting a rising dividend payout trend.
Income taxes payable: Income taxes payable showed a downward trend from 89 million in 2017 to 48 million in 2019, before a rebound to 77 million in 2021, indicating fluctuating tax payment timing or liabilities.
Liabilities held for sale: Liabilities held for sale were recorded only in 2019 at 71 million and absent in other years, likely reflecting a one-time classification related to asset disposals during that year.
Current liabilities: Current liabilities peaked at 3,542 million in 2018, fell sharply to 2,154 million in 2019, then rose again to 3,470 million in 2021, revealing significant variability in short-term obligations.
Long-term debt: Long-term debt fluctuated, decreasing from 7,478 million in 2017 to 6,029 million in 2018, then increasing to 7,754 million in 2019 and remaining relatively stable around 7,700 million in 2020 before decreasing to 6,909 million in 2021, indicating active debt management and refinancing.
Deferred income taxes: Deferred income taxes surged from 164 million in 2017 to over 700 million in 2018, then slightly decreased and stabilized around 650 million by 2021, showing a step increase likely due to tax accounting adjustments.
Noncurrent income taxes payable: Noncurrent income taxes payable consistently declined from 614 million in 2017 to 365 million in 2021, suggesting reductions in long-term tax liabilities.
Pension benefit obligation: Pension benefit obligations fluctuated mildly, moving from 219 million in 2017 to a peak of 241 million in 2020, then decreasing to 235 million in 2021, indicating relatively stable obligations with slight changes.
Postretirement benefit obligation: Postretirement benefits showed moderate increase from 174 million in 2017 to 198 million in 2019, then declined notably to 148 million in 2021, reflecting adjustments in related liabilities.
Long-term portion of operating lease liabilities: Recorded starting in 2019 at 128 million, this liability rose slightly to 133 million by 2020 and remained stable, consistent with new lease accounting standards.
Other long-term liabilities: Other long-term liabilities increased from 489 million in 2017 to 537 million in 2021, reflecting additional accrued obligations over time.
Other liabilities: Other liabilities fluctuated but generally increased from 882 million in 2017 to a peak of 1,068 million in 2020 before slightly reducing to 1,053 million in 2021, indicating growth in miscellaneous liabilities.
Noncurrent liabilities: Noncurrent liabilities decreased from 9,138 million in 2017 to 8,070 million in 2018, then rose sharply to 9,884 million in 2019 and stabilized around 9,800 million before declining to 8,981 million in 2021, showing volatility in long-term obligations.
Total liabilities: Total liabilities peaked at 12,430 million in 2020 and showed an overall stable trend around 12,000 to 12,500 million from 2017 to 2021, with limited net growth over the five years.
Common stock and additional paid-in capital: Common stock par value remained constant at 6 million; additional paid-in capital displayed a steady increase from 1,218 million in 2017 to 1,432 million in 2021, indicating ongoing equity contributions or retained capital adjustments.
Retained earnings: Retained earnings showed consistent growth over the period, rising from 20,210 million in 2017 to 24,325 million in 2021, reflecting sustained profitability and reinvestment of earnings.
Common stock held in treasury: Treasury stock increasingly grew in absolute terms from -15,562 million in 2017 to -20,636 million in 2021, suggesting ongoing share repurchase activity reducing outstanding equity.
Accumulated other comprehensive loss: The accumulated other comprehensive loss worsened from -1,287 million in 2017 to -1,705 million in 2019, then improved to -1,502 million by 2021, reflecting fluctuations in items such as foreign currency translation and other comprehensive income components.
Stockholders’ equity attributable to the company: Equity attributable to the company declined sharply from 4,585 million in 2017 to 3,026 million in 2019, before recovering moderately to 3,625 million in 2021, indicating some erosion and partial restoration of owner equity over the period.
Noncontrolling interest: Noncontrolling interest remained negligible and stable around 1 to 4 million throughout the years.
Total stockholders’ equity: Total stockholders’ equity mirrored the trends in attributable equity, declining initially from 4,589 million in 2017 to 3,030 million in 2019, then increasing slightly to 3,626 million in 2021.
Total liabilities and stockholders’ equity: The total financing base of liabilities plus equity contracted from 16,780 million in 2017 to 14,870 million in 2018, followed by recovery and gradual growth to 16,077 million in 2021, showing fluctuations in capital structure but a general return to the earlier scale.

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Illinois Tool Works Inc. (NYSE:ITW)

Balance Sheet: Liabilities and Stockholders’ Equity