Name: Illinois Tool Works Inc. (NYSE:ITW) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

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.

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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).

The total liabilities and stockholders' equity of the organization exhibited a general trend of recovery and growth toward the end of the analyzed period, rising from 16,780 million in 2017 to 16,077 million in 2021, after a dip in 2018. Total liabilities remained relatively stable over the five-year span, moving from 12,191 million in 2017 to 12,451 million in 2021, suggesting a consistent approach to managing long-term and short-term obligations.

Current Liabilities and Short-Term Debt: Current liabilities experienced significant volatility, starting at 3,053 million in 2017, peaking at 3,542 million in 2018, and dropping sharply to 2,154 million in 2019 before climbing back to 3,470 million by 2021. This fluctuation is primarily attributed to short-term debt, which saw a dramatic decline from 1,351 million in 2018 to nearly zero (4 million) in 2019, followed by a steady increase to 778 million in 2021. Accrued expenses also showed a notable increase in 2021, reaching 1,648 million from 1,284 million the previous year.
Noncurrent Liabilities and Long-Term Debt: Noncurrent liabilities fluctuated between 8,070 million in 2018 and 9,884 million in 2019. Long-term debt demonstrated a non-linear trend, decreasing from 7,478 million in 2017 to 6,029 million in 2018, before spiking to 7,754 million in 2019 and ending the period at 6,909 million in 2021. Deferred income taxes increased significantly from 164 million in 2017 to 654 million in 2021, while noncurrent income taxes payable showed a consistent downward trend from 614 million to 365 million over the same period.
Stockholders' Equity and Treasury Stock: Total stockholders' equity declined from 4,589 million in 2017 to a low of 3,030 million in 2019, before recovering to 3,626 million by 2021. A primary driver of this reduction was the aggressive acquisition of treasury stock, which increased from a negative 15,562 million in 2017 to a negative 20,636 million in 2021. This indicates substantial share buybacks that offset the growth in retained earnings.
Retained Earnings and Capital Contributions: Retained earnings exhibited a strong and consistent upward trajectory, growing from 20,210 million in 2017 to 24,325 million in 2021, reflecting sustained profitability. Additionally, additional paid-in-capital increased steadily from 1,218 million to 1,432 million, contributing to the overall equity base despite the impact of treasury stock outflows.

The overall financial structure reveals a strategy of utilizing debt to maintain operations while aggressively returning value to shareholders through share repurchases. The stability of total liabilities contrasted with the volatility in equity suggests a capital structure that is heavily influenced by active treasury management and periodic adjustments in short-term financing.

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