Item 8. Financial Statements and Supplementary Data

MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Illinois Tool Works Inc. (the "Company" or "ITW") is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). ITW’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

ITW management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Based on our assessment we believe that, as of December 31, 2015, the Company’s internal control over financial reporting is effective based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report herein.

/s/ E. Scott Santi E. Scott Santi Chairman & Chief Executive Officer February 11, 2016		/s/ Michael M. Larsen Michael M. Larsen Senior Vice President & Chief Financial Officer February 11, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Illinois Tool Works Inc.

Glenview, Illinois

We have audited the accompanying consolidated statements of financial position of Illinois Tool Works Inc. and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of income, comprehensive income, income reinvested in the business, and cash flows for each of the three years in the period ended December 31, 2015. We also have audited the Company's internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Illinois Tool Works Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ DELOITTE & TOUCHE LLP

Deloitte & Touche LLP

Chicago, Illinois

February 11, 2016

Statement of Income

Illinois Tool Works Inc. and Subsidiaries

	For the Years Ended December 31
In millions except per share amounts	2015				2014				2013
Operating Revenue	$	13,405			$	14,484			$	14,135
Cost of revenue	7,888				8,673				8,554
Selling, administrative, and research and development expenses	2,417				2,678				2,815
Amortization of intangible assets	231				242				250
Impairment of goodwill and other intangible assets	2				3				2
Operating Income	2,867				2,888				2,514
Interest expense	(226		)		(250		)		(239		)
Other income (expense)	78				61				72
Income from Continuing Operations Before Income Taxes	2,719				2,699				2,347
Income taxes	820				809				717
Income from Continuing Operations	1,899				1,890				1,630
Income from Discontinued Operations	—				1,056				49
Net Income	$	1,899			$	2,946			$	1,679
Income Per Share from Continuing Operations:
Basic	$	5.16			$	4.70			$	3.65
Diluted	$	5.13			$	4.67			$	3.63
Income Per Share from Discontinued Operations:
Basic	$	—			$	2.63			$	0.11
Diluted	$	—			$	2.61			$	0.11
Net Income Per Share:
Basic	$	5.16			$	7.33			$	3.76
Diluted	$	5.13			$	7.28			$	3.74

The Notes to Financial Statements are an integral part of this statement.

Statement of Comprehensive Income

Illinois Tool Works Inc. and Subsidiaries

	For the Years Ended December 31
In millions	2015				2014				2013
Net Income	$	1,899			$	2,946			$	1,679
Other Comprehensive Income (Loss):
Foreign currency translation adjustments, net of tax	(860		)		(939		)		(193		)
Pension and other postretirement benefit adjustments, net of tax	14				(103		)		284
Comprehensive Income	$	1,053			$	1,904			$	1,770

Statement of Income Reinvested in the Business

Illinois Tool Works Inc. and Subsidiaries

	For the Years Ended December 31
In millions	2015				2014				2013
Beginning Balance	$	17,173			$	14,943			$	13,973
Net income	1,899				2,946				1,679
Cash dividends declared	(756		)		(716		)		(709		)
Ending Balance	$	18,316			$	17,173			$	14,943

The Notes to Financial Statements are an integral part of these statements.

Statement of Financial Position

Illinois Tool Works Inc. and Subsidiaries

	December 31
In millions except shares	2015				2014
Assets
Current Assets:
Cash and equivalents	$	3,090			$	3,990
Trade receivables	2,203				2,293
Inventories	1,086				1,180
Prepaid expenses and other current assets	341				401
Total current assets	6,720				7,864
Net plant and equipment	1,577				1,686
Goodwill	4,439				4,667
Intangible assets	1,560				1,799
Deferred income taxes	346				338
Other assets	1,087				1,111
	$	15,729			$	17,465
Liabilities and Stockholders’ Equity
Current Liabilities:
Short-term debt	$	526			$	1,476
Accounts payable	449				512
Accrued expenses	1,136				1,287
Cash dividends payable	200				186
Income taxes payable	57				64
Total current liabilities	2,368				3,525
Noncurrent Liabilities:
Long-term debt	6,896				5,943
Deferred income taxes	256				171
Other liabilities	981				1,002
Total noncurrent liabilities	8,133				7,116
Stockholders’ Equity:
Common stock:
Issued- 550,035,604 shares in 2015 and 2014 Outstanding- 363,710,073 in 2015 and 383,196,213 in 2014	6				6
Additional paid-in-capital	1,135				1,096
Income reinvested in the business	18,316				17,173
Common stock held in treasury	(12,729		)		(10,798		)
Accumulated other comprehensive income (loss)	(1,504		)		(658		)
Noncontrolling interest	4				5
Total stockholders’ equity	5,228				6,824
	$	15,729			$	17,465

The Notes to Financial Statements are an integral part of this statement.

Statement of Cash Flows

Illinois Tool Works Inc. and Subsidiaries

	For the Years Ended December 31
In millions	2015				2014				2013
Cash Provided by (Used for) Operating Activities:
Net income	$	1,899			$	2,946			$	1,679
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	244				262				299
Amortization and impairment of goodwill and other intangible assets	233				245				314
Change in deferred income taxes	(11		)		55				6
Provision for uncollectible accounts	7				7				3
(Income) loss from investments	(4		)		(8		)		(12		)
(Gain) loss on sale of plant and equipment	1				2				(1		)
(Gain) loss on discontinued operations	—				(1,718		)		91
(Gain) loss on sale of operations and affiliates	(16		)		6				5
Stock-based compensation expense	41				39				37
Gain on acquisition of controlling interest in an equity investment	—				—				(30		)
Other non-cash items, net	12				11				20
Change in assets and liabilities, net of acquisitions and divestitures:
(Increase) decrease in—
Trade receivables	(42		)		(70		)		(83		)
Inventories	25				(10		)		24
Prepaid expenses and other assets	24				(98		)		226
Increase (decrease) in—
Accounts payable	(30		)		(20		)		8
Accrued expenses and other liabilities	(56		)		5				161
Income taxes	(27		)		33				(176		)
Other, net	(1		)		(71		)		(43		)
Net cash provided by operating activities	2,299				1,616				2,528
Cash Provided by (Used for) Investing Activities:
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates	(6		)		(45		)		(369		)
Additions to plant and equipment	(284		)		(361		)		(368		)
Proceeds from investments	22				28				40
Proceeds from sale of plant and equipment	30				28				38
Net proceeds from sale of discontinued operations	—				3,191				206
Proceeds from sale of operations and affiliates	29				18				2
Other, net	(1		)		(17		)		(5		)
Net cash provided by (used for) investing activities	(210		)		2,842				(456		)
Cash Provided by (Used for) Financing Activities:
Cash dividends paid	(742		)		(711		)		(528		)
Issuance of common stock	59				148				206
Repurchases of common stock	(2,002		)		(4,346		)		(2,106		)
Net proceeds from (repayments of) debt with original maturities of three months or less	(946		)		(239		)		1,267
Proceeds from debt with original maturities of more than three months	1,099				3,329				3
Repayments of debt with original maturities of more than three months	(2		)		(1,751		)		(6		)
Excess tax benefits from stock-based compensation	20				33				24
Other, net	(12		)		(14		)		—
Net cash provided by (used for) financing activities	(2,526		)		(3,551		)		(1,140		)
Effect of Exchange Rate Changes on Cash and Equivalents	(463		)		(535		)		(93		)
Cash and Equivalents:
Increase (decrease) during the year	(900		)		372				839
Beginning of year	3,990				3,618				2,779
End of year	$	3,090			$	3,990			$	3,618
Supplementary Cash Flow Information:
Cash Paid During the Year for Interest	$	200			$	236			$	240
Cash Paid During the Year for Income Taxes, Net of Refunds	$	775			$	1,502			$	602
Liabilities Assumed from Acquisitions	$	1			$	4			$	145

The Notes to Financial Statements are an integral part of this statement.

Notes to Financial Statements

The Notes to Financial Statements furnish additional information on items in the financial statements. The notes have been arranged in the same order as the related items appear in the statements.

Illinois Tool Works Inc. (the "Company" or "ITW") is a global manufacturer of a diversified range of industrial products and equipment with approximately 84 divisions in 57 countries. The Company primarily serves the automotive OEM/tiers, automotive aftermarket, general industrial, commercial food equipment, and construction end markets.

Significant accounting principles and policies of the Company are in italics. Certain reclassifications of prior year data have been made to conform to current year reporting.

The preparation of the Company’s financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to financial statements. Actual results could differ from those estimates. The significant estimates included in the preparation of the financial statements are related to inventories, trade receivables, plant and equipment, income taxes, goodwill and intangible assets, product liability matters, litigation, product warranties, pensions, other postretirement benefits, environmental matters and stock-based compensation.

Consolidation and Translation—The financial statements include the Company and its majority-owned subsidiaries. The Company follows the equity method of accounting for investments where the Company has a significant influence but not a controlling interest. Intercompany transactions are eliminated from the financial statements. Foreign subsidiaries’ assets and liabilities are translated to U.S. dollars at end-of-period exchange rates. Revenues and expenses are translated at average rates for the period. Translation adjustments are reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity.

Discontinued Operations

In April 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in a company's operations and financial results should be reported as discontinued operations. In addition, disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify as a discontinued operation is required. The Company adopted this new guidance effective January 1, 2015. The new guidance applies prospectively to new disposals and new classifications of disposal groups held for sale after such date. There were no discontinued operations during 2015 under this new accounting guidance. For businesses reported as discontinued operations in the statement of income prior to adoption, all related prior period income statement information has been restated.

Third Quarter 2013 Discontinued Operations-In February 2013, the Company announced that it was initiating a review process to explore strategic alternatives for its Industrial Packaging segment. In September 2013, the Company’s Board of Directors authorized a plan to commence a sale process for the Industrial Packaging segment. The Company classified the Industrial Packaging segment as held for sale beginning in the third quarter of 2013 and no longer presented this segment as part of its continuing operations.

On February 6, 2014, the Company announced that it had signed a definitive agreement to sell its Industrial Packaging business to The Carlyle Group for $3.2 billion. The transaction was completed on May 1, 2014, resulting in a pre-tax gain of $1.7 billion ($1.1 billion after-tax) in the second quarter of 2014 which was included in Income from discontinued operations.

In the third quarter of 2013, the Company also committed to plans for the divestiture of a construction distribution business previously included in the Construction Products segment and a specialty coatings business previously included in the Polymers & Fluids segment. These businesses were classified as held for sale beginning in the third quarter of 2013. The specialty coatings business was sold in the fourth quarter of 2013. The construction distribution business was sold in the second quarter of 2014.

First Quarter 2013 Discontinued Operations-In the first quarter of 2013, the Company committed to plans for the divestiture of two transportation related businesses and a machine components business previously included in the Specialty Products segment, two construction distribution businesses previously included in the Construction Products segment, and a chemical manufacturing business previously included in the Polymers & Fluids segment. These businesses were classified as held for sale beginning in the first quarter of 2013.

In the second quarter of 2013, the Company divested one of the held for sale transportation related businesses, the machine components business, and the chemical manufacturing business. In the third quarter of 2013, the Company divested the second held for sale transportation related business. In the fourth quarter of 2013, the Company divested one construction distribution business and the remaining construction distribution business was sold in the second quarter of 2014.

The operating results of the businesses discussed above are reported as discontinued operations in the statement of income for all periods presented. Results of the discontinued operations for the years ended December 31, 2014 and 2013 were as follows:

In millions		2014				2013
Operating revenue		$	798			$	2,769
Income before income taxes		$	1,805			$	186
Income tax expense		(749		)		(137		)
Income from discontinued operations		$	1,056			$	49

Included in income before income taxes from discontinued operations are net gain on disposal of $1.7 billion in 2014 and net losses on disposal of $91 million in 2013. The net gain in 2014 included a pre-tax gain of $1.7 billion ($1.1 billion after-tax) on the sale of the Industrial Packaging business. The net losses in 2013 included a $39 million pre-tax loss related to the sale of one of the construction distribution businesses and a $20 million pre-tax loss related to the sale of one of the transportation related businesses. Also included in income before income taxes from discontinued operations in 2013 was a $42 million goodwill impairment charge recorded in connection with the anticipated sale of one of the transportation related businesses.

In 2014, income tax expense from discontinued operations included $175 million of U.S. income tax expense related to the repatriation of approximately $1.3 billion of international proceeds from the sale of the Industrial Packaging business. In 2013, income tax expense from discontinued operations included $42 million of tax expense related to the legal restructuring of the Industrial Packaging business.

There were no businesses classified as held for sale as of December 31, 2015 and 2014.

Acquisitions—The Company accounts for acquisitions under the acquisition method, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. The operating results of the acquired companies are included in the Company’s consolidated financial statements from the date of acquisition. Acquisitions, individually and in the aggregate, did not materially affect the Company’s results of operations or financial position for any period presented. Net cash paid for acquisitions during 2015, 2014, and 2013 was $6 million, $45 million, and $369 million, respectively.

The premium over tangible net assets recorded for acquisitions based on purchase price allocations during 2015, 2014 and 2013 was as follows:

		2015							2014							2013
In millions except weighted-average lives (years)		Weighted- Average Life			Premium Recorded				Weighted- Average Life			Premium Recorded				Weighted- Average Life		Premium Recorded
Goodwill					$	2						$	18					$	247
Amortizable intangible assets:
Patents and proprietary technology		6.4			2				15.4			8				9.8		34
Trademarks and brands		—			—				12.9			3				15.5		35
Customer lists and relationships		—			—				11.4			12				11.2		100
Other		—			—				—			—				5.0		12
Total amortizable intangible assets		6.4			2				12.9			23				11.4		181
Indefinite-lived intangible assets:
Trademarks and brands					—							—						—
Total premium recorded					$	4						$	41					$	428

No goodwill recorded for acquisitions during 2015 will be tax deductible. Of the total goodwill recorded for acquisitions in 2014 and 2013, the Company expects goodwill of $14 million and $25 million, respectively, will be tax deductible.

Operating Revenue is recognized when persuasive evidence of an arrangement exists, product has shipped and the risks and rewards of ownership have transferred or services have been rendered, the price to the customer is fixed or determinable, and collectibility is reasonably assured, which is generally at the time of product shipment. Typical sales arrangements are for standard products and provide for transfer of ownership and risk of loss at the time of shipment. In limited circumstances where significant obligations to the customer are unfulfilled at the time of shipment, typically involving installation and customer acceptance, revenue recognition is deferred until such obligations have been completed. Customer allowances and rebates, consisting primarily of volume discounts and other short-term incentive programs, are estimated at the time of sale based on historical experience and known trends and are recorded as a reduction in reported revenues.

In May 2014, the FASB issued authoritative guidance to change the criteria for revenue recognition. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, several new revenue recognition disclosures will be required. This guidance is effective for the Company beginning January 1, 2018. The Company is currently assessing the potential impact the guidance will have upon adoption.

Research and Development Expenses are recorded as expense in the year incurred. These costs were $218 million in 2015, $227 million in 2014 and $240 million in 2013.

Rental Expense was $117 million in 2015, $130 million in 2014 and $138 million in 2013. Future minimum lease payments under non-cancelable leases for the years ending December 31 are as follows:

In millions
2016	$	98
2017	69
2018	47
2019	31
2020	23
2021 and future years	29
	$	297

Advertising Expenses are recorded as expense in the year incurred. These costs were $58 million in 2015, $66 million in 2014 and $67 million in 2013.

Other Income (Expense) consisted of the following:

In millions		2015				2014				2013
Interest income		$	52			$	65			$	50
Gain (loss) on disposal of operations and affiliates		16				(6		)		(5		)
Gain (loss) on foreign currency transactions, net		5				8				(5		)
Income from investments		4				8				12
Gain on acquisition of controlling interest in an equity investment		—				—				30
Equity income (loss) in Wilsonart		(4		)		(9		)		(14		)
Other, net		5				(5		)		4
		$	78			$	61			$	72

On January 31, 2013, the Company acquired the controlling interest of an existing consumer packaging business in the Specialty Products segment previously accounted for under the equity method. The Company recorded a pre-tax gain of $30 million in Other income (expense) in the first quarter of 2013 as a result of remeasuring the Company's existing equity interest to fair value by determining the implied equity value using a Level 3 valuation method.

Equity income (loss) in Wilsonart is related to the Company's 49% ownership interest in Wilsonart International Holdings LLC accounted for under the equity method of accounting. Refer to the Other Assets note for further information regarding this investment.

Income Taxes—The Company utilizes the asset and liability method of accounting for income taxes. Deferred income taxes are determined based on the estimated future tax effects of differences between the financial and tax bases of assets and liabilities given the provisions of the enacted tax laws. The components of the provision for income taxes were as shown below:

In millions		2015				2014				2013
U.S. federal income taxes:
Current		$	503			$	413			$	410
Deferred		8				121				84
		511				534				494
Foreign income taxes:
Current		310				163				153
Deferred		(11		)		66				35
Benefit of net operating loss carryforwards		(48		)		(13		)		(13		)
		251				216				175
State income taxes:
Current		66				50				64
Deferred		(8		)		9				(16		)
		58				59				48
		$	820			$	809			$	717

Income from continuing operations before income taxes for domestic and foreign operations was as follows:

In millions		2015				2014				2013
Domestic		$	1,660			$	1,669			$	1,444
Foreign		1,059				1,030				903
		$	2,719			$	2,699			$	2,347

The reconciliation between the U.S. federal statutory tax rate and the effective tax rate was as follows:

		2015			2014			2013
U.S. federal statutory tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of U.S. federal tax benefit		1.4			1.6			1.8
Differences between U.S. federal statutory and foreign tax rates		(3.1	)		(3.5	)		(3.4	)
Nontaxable foreign interest income		(3.3	)		(3.6	)		(3.5	)
Tax effect of foreign dividends		2.8			2.1			2.4
Tax relief for U.S. manufacturers		(1.6	)		(1.5	)		(1.3	)
Other, net		(1.1	)		(0.1	)		(0.4	)
Effective tax rate		30.1	%		30.0	%		30.6	%

Deferred U.S. federal income taxes and foreign withholding taxes have not been provided on the remaining undistributed earnings of certain international subsidiaries as these earnings are considered permanently invested. Undistributed earnings of these subsidiaries were approximately $8.7 billion and $7.1 billion as of December 31, 2015 and 2014, respectively. Upon repatriation of these earnings to the U.S. in the form of dividends or other distribution of earnings, the Company may be subject to U.S. income taxes and foreign withholding taxes. The actual U.S. tax cost would depend on income tax laws and circumstances at the time of distribution. Determination of the related tax liability is not practicable because of the complexities associated with the hypothetical calculation.

In November 2015, the FASB issued authoritative guidance to simplify the presentation of deferred taxes. Under the new guidance, all deferred tax assets and liabilities are presented as noncurrent in the statement of financial position. The Company early adopted this guidance in the fourth quarter of 2015 and applied it retrospectively to all periods presented. Due to the restatement of current deferred tax assets and liabilities to noncurrent, adoption of this guidance resulted in an increase of noncurrent deferred tax assets of $37 million and a decrease of noncurrent deferred tax liabilities of $167 million as of December 31, 2014.

The components of deferred income tax assets and liabilities at December 31, 2015 and 2014 were as follows:

		2015								2014
In millions		Asset				Liability				Asset				Liability
Goodwill and intangible assets		$	282			$	(734	)		$	277			$	(758	)
Inventory reserves, capitalized tax cost and LIFO inventory		42				(5		)		48				(1		)
Investments		25				(298		)		31				(273		)
Plant and equipment		28				(84		)		26				(85		)
Accrued expenses and reserves		79				—				73				—
Employee benefit accruals		314				—				324				—
Foreign tax credit carryforwards		216				—				195				—
Net operating loss carryforwards		643				—				670				—
Capital loss carryforwards		39				—				80				—
Allowances for uncollectible accounts		13				—				11				—
Pension liabilities		13				—				11				—
Deferred intercompany deductions		—				—				14				—
Unrealized loss (gain) on foreign debt instruments		—				(115		)		—				(59		)
Other		109				(10		)		123				(10		)
Gross deferred income tax assets (liabilities)		1,803				(1,246		)		1,883				(1,186		)
Valuation allowances		(467		)		—				(530		)		—
Total deferred income tax assets (liabilities)		$	1,336			$	(1,246	)		$	1,353			$	(1,186	)

Valuation allowances are established when it is estimated that it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The valuation allowances recorded at December 31, 2015 and 2014 related primarily to certain net operating loss carryforwards and capital loss carryforwards.

At December 31, 2015, the Company had net operating loss carryforwards available to offset future taxable income in the U.S. and certain foreign jurisdictions, which expire as follows:

	Gross Carryforwards Related
In millions	to Net Operating Losses
2016	$	1
2017	11
2018	8
2019	10
2020	80
2021	75
2022	21
2023-2035	52
Do not expire	2,104
	$	2,362

The Company has foreign tax credit carryforwards of $216 million as of December 31, 2015 that are available for use by the Company between 2016 and 2025.

The changes in the amount of unrecognized tax benefits during 2015, 2014 and 2013 were as follows:

In millions		2015				2014				2013
Beginning balance		$	218			$	268			$	249
Additions based on tax positions related to the current year		39				23				26
Additions for tax positions of prior years		54				12				40
Reductions for tax positions of prior years		(41		)		(59		)		(21		)
Settlements		(6		)		(18		)		(27		)
Foreign currency translation		(5		)		(8		)		1
Ending balance		$	259			$	218			$	268

Included in the balance at December 31, 2015 were approximately $227 million of unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate.

During the third quarter of 2013, the Company recorded a discrete tax charge of $40 million related to the tax treatment of intercompany financing transactions that impact the taxability of foreign earnings.

The Company and its subsidiaries file tax returns in the U.S. and various state, local and foreign jurisdictions. These tax returns are routinely audited by the tax authorities in these jurisdictions including the Internal Revenue Service, Her Majesty's Revenue and Customs, German Fiscal Authority, French Fiscal Authority, and Australian Tax Office, and a number of these audits are currently ongoing, which may increase the amount of the unrecognized tax benefits in future periods. Due to the ongoing audits, the Company believes it is reasonably possible that within the next twelve months the amount of the Company's unrecognized tax benefits may be decreased by approximately $113 million related predominantly to various intercompany transactions. The Company has recorded its best estimate of the potential exposure for these issues. The following table summarizes the open tax years for the Company’s major jurisdictions:

Jurisdiction		Open Tax Years
United States – Federal		2012-2015
United Kingdom		2012-2015
Germany		2009-2015
France		2013-2015
Australia		2011-2015

The Company recognizes interest and penalties related to income tax matters in income tax expense. The accrual for interest and penalties as of December 31, 2015 and 2014 was $32 million and $30 million, respectively.

On February 18, 2014, the Company received a Notice of Deficiency ("NOD") from the IRS asserting that a non-taxable return of capital received from a subsidiary was a taxable dividend distribution. The NOD assesses additional taxes of $70 million for the 2006 tax year, plus interest and penalties. In May 2014, the Company petitioned the United States Tax Court to challenge the NOD. The Company's petition was subsequently denied and the case will proceed to court with trial set for the third quarter of 2016. Although the outcome of this process cannot be predicted with certainty, the Company believes it will be successful in defending its positions. Accordingly, no reserve has been recorded related to this matter.

Income Per Share from Continuing Operations is computed by dividing income from continuing operations by the weighted-average number of shares outstanding for the period. Income from continuing operations per diluted share is computed by dividing income from continuing operations by the weighted-average number of shares assuming dilution for stock options and restricted stock units. Dilutive shares reflect the potential additional shares that would be outstanding if the dilutive stock options outstanding were exercised and the unvested restricted stock units vested during the period. The computation of income per share from continuing operations was as follows:

In millions except per share amounts		2015				2014				2013
Income from continuing operations		$	1,899			$	1,890			$	1,630
Income per share from continuing operations—Basic:
Weighted-average common shares		367.9				401.7				446.2
Income per share from continuing operations—Basic		$	5.16			$	4.70			$	3.65
Income per share from continuing operations—Diluted:
Weighted-average common shares		367.9				401.7				446.2
Effect of dilutive stock options and restricted stock units		2.2				2.9				3.1
Weighted-average common shares assuming dilution		370.1				404.6				449.3
Income per share from continuing operations—Diluted		$	5.13			$	4.67			$	3.63

Options that were considered antidilutive were not included in the computation of diluted income per share from continuing operations. There were 0.6 million antidilutive options outstanding as of December 31, 2015. There were no antidilutive options outstanding as of December 31, 2014 and 0.1 million antidilutive options outstanding as of December 31, 2013.

Cash and Equivalents include cash on hand and instruments having original maturities of three months or less. Cash and equivalents are stated at cost, which approximates fair value.

Trade Receivables are net of allowances for uncollectible accounts, including reserves for customer credits and cash discounts. The changes in the allowances for uncollectible accounts during 2015, 2014 and 2013 were as follows:

In millions		2015				2014				2013
Beginning balance		$	(43	)		$	(46	)		$	(65	)
Provision charged to expense		(7		)		(7		)		(3		)
Write-offs, net of recoveries		5				7				14
Acquisitions and divestitures		—				—				(1		)
Foreign currency translation		3				3				1
Transfer to assets held for sale		—				—				8
Ending balance		$	(42	)		$	(43	)		$	(46	)

Inventories at December 31, 2015 and 2014 were as follows:

In millions		2015				2014
Raw material		$	415			$	458
Work-in-process		130				133
Finished goods		622				677
LIFO reserve		(81		)		(88		)
		$	1,086			$	1,180

Inventories are stated at the lower of cost or net realizable value and include material, labor and factory overhead. The last-in, first-out ("LIFO") method is used to determine the cost of the inventories at certain U.S. businesses. The first-in, first-out ("FIFO") method, which approximates current cost, is used for all other inventories. Inventories priced at LIFO were approximately 22% of total inventories as of both December 31, 2015 and 2014. If the FIFO method was used for all inventories, total inventories would have been approximately $81 million and $88 million higher than reported at December 31, 2015 and 2014, respectively.

Prepaid Expenses and Other Current Assets as of December 31, 2015 and 2014 were as follows:

In millions		2015				2014
Income tax refunds receivable		$	147			$	129
Value-added-tax receivables		48				50
Vendor advances		22				30
Other		124				192
		$	341			$	401

Net Plant and Equipment are stated at cost, less accumulated depreciation. Renewals and improvements that increase the useful life of plant and equipment are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation of plant and equipment is primarily computed on an accelerated basis for U.S. businesses and on a straight-line basis for a majority of the international businesses.

Depreciation was $244 million in 2015, $262 million in 2014 and $270 million in 2013. There was no depreciation included in Income from discontinued operations in 2015 and 2014. Depreciation included in Income from discontinued operations in 2013 was $29 million.

Net plant and equipment consisted of the following at December 31, 2015 and 2014:

In millions		2015				2014
Land		$	179			$	177
Buildings and improvements		1,272				1,200
Machinery and equipment		2,972				3,034
Equipment leased to others		156				158
Construction in progress		76				230
Gross plant and equipment		4,655				4,799
Accumulated depreciation		(3,078		)		(3,113		)
Net plant and equipment		$	1,577			$	1,686

The ranges of useful lives used to depreciate plant and equipment are as follows:

Buildings and improvements	5—50 years
Machinery and equipment	3—12 years
Equipment leased to others	Term of lease

Goodwill and Intangible Assets—Goodwill represents the excess cost over fair value of the net assets of purchased businesses. The Company does not amortize goodwill and intangible assets that have indefinite lives. The Company performs an impairment assessment of goodwill and intangible assets with indefinite lives annually, or more frequently if triggering events occur, based on the estimated fair value of the related reporting unit or intangible asset. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

When performing its annual impairment assessment, the Company evaluates the goodwill assigned to each of its reporting units for potential impairment by comparing the estimated fair value of the relevant reporting unit to the carrying value. The Company uses various Level 2 and Level 3 valuation techniques to determine the fair value of its reporting units, including discounting estimated future cash flows based on a detailed cash flow forecast prepared by the relevant reporting unit and market multiples of relevant public companies. If the fair value of a reporting unit is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of the reporting unit's goodwill.

The Company's indefinite-lived intangible assets consist of trademarks and brands. The estimated fair values of these intangible assets are determined based on a Level 3 valuation method using a relief-of-royalty income approach derived from internally forecasted revenues of the related products. If the fair value of the trademark or brand is less than its carrying value, an impairment loss is recorded for the difference between the estimated fair value and carrying value of the intangible asset.

Amortization and impairment of goodwill and other intangible assets for the years ended December 31, 2015, 2014 and 2013 were as follows:

In millions		2015				2014				2013
Goodwill:
Impairment		$	—			$	—			$	—
Intangible Assets:
Amortization		231				242				250
Impairment		2				3				2
		$	233			$	245			$	252

Income from discontinued operations included intangible asset amortization of $20 million in 2013.

The Company performed its annual impairment assessment of goodwill and indefinite-lived intangible assets in the third quarter of 2015, 2014 and 2013. In the third quarter of 2015, these assessments resulted in no goodwill impairment charges and an indefinite-lived intangible asset charge of $2 million related to a brand in the Polymers & Fluids segment. In the third quarter of 2014, these assessments resulted in no goodwill impairment charges and indefinite-lived intangible asset charges of $3 million related to certain brands in the Polymers & Fluids and Test & Measurement and Electronics segments. In 2013, these assessments resulted in no goodwill impairment charges and an indefinite-lived intangible asset impairment charge of $2 million related to a brand in the Test & Measurement and Electronics segment.

A summary of indefinite-lived intangible assets that were adjusted to fair value and the related impairment charges for the years ended December 31, 2015, 2014, and 2013 is as follows:

		2015												2014												2013
In millions		Carrying Value				Fair Value				Total Impairment Charges				Carrying Value				Fair Value				Total Impairment Charges				Carrying Value				Fair Value				Total Impairment Charges
Indefinite-lived intangible assets		$	26			$	24			$	2			$	11			$	8			$	3			$	42			$	40			$	2

The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 were as follows:

In millions	Automotive OEM				Test & Measurement and Electronics				Food Equipment				Polymers & Fluids				Welding				Construction Products				Specialty Products				Total
Balance, December 31, 2013	$	320			$	1,426			$	294			$	1,021			$	294			$	561			$	970			$	4,886
2014 activity:
Acquisitions & divestitures	(3		)		—				—				3				—				8				—				8
Impairment charges	—				—				—				—				—				—				—				—
Foreign currency translation	(23		)		(36		)		(18		)		(60		)		(17		)		(27		)		(46		)		(227		)
Balance, December 31, 2014	294				1,390				276				964				277				542				924				4,667
2015 activity:
Acquisitions & divestitures	—				—				—				(6		)		1				—				—				(5		)
Impairment charges	—				—				—				—				—				—				—				—
Foreign currency translation	(17		)		(35		)		(17		)		(64		)		(17		)		(26		)		(47		)		(223		)
Balance, December 31, 2015	$	277			$	1,355			$	259			$	894			$	261			$	516			$	877			$	4,439
Cumulative goodwill impairment charges, December 31, 2015	$	24			$	83			$	60			$	15			$	5			$	7			$	46			$	240

Income from discontinued operations included a goodwill impairment of $42 million in 2013.

Intangible assets as of December 31, 2015 and 2014 were as follows:

		2015												2014
In millions		Cost				Accumulated Amortization				Net				Cost				Accumulated Amortization				Net
Amortizable intangible assets:
Customer lists and relationships		$	1,630			$	(943	)		$	687			$	1,638			$	(820	)		$	818
Trademarks and brands		724				(298		)		426				707				(249		)		458
Patents and proprietary technology		618				(397		)		221				622				(354		)		268
Other		475				(446		)		29				471				(430		)		41
Total amortizable intangible assets		3,447				(2,084		)		1,363				3,438				(1,853		)		1,585
Indefinite-lived intangible assets:
Trademarks and brands		197				—				197				214				—				214
Total intangible assets		$	3,644			$	(2,084	)		$	1,560			$	3,652			$	(1,853	)		$	1,799

Amortizable intangible assets are being amortized on a straight-line basis over their estimated useful lives of 3 to 20 years.

The estimated amortization expense of intangible assets for the future years ending December 31 is as follows:

In millions
2016	$	217
2017	196
2018	175
2019	153
2020	134

Other Assets - In April 2015, the FASB issued authoritative guidance to simplify the balance sheet presentation of long-term debt issuance costs. Under the new guidance, long-term debt issuance costs are presented as a reduction of the carrying amount of the related long-term debt. The Company early adopted this guidance in the fourth quarter of 2015 and applied it retrospectively to all periods presented. As of December 31, 2014, the Company restated $38 million of deferred debt issuance costs from Other assets to Long-term debt.

Other assets as of December 31, 2015 and 2014 consisted of the following:

In millions		2015				2014
Cash surrender value of life insurance policies		$	428			$	418
Prepaid pension assets		191				165
Equity investment in Wilsonart		113				141
Investments		99				110
Customer tooling		88				96
Other		168				181
		$	1,087			$	1,111

In the fourth quarter of 2012, the Company divested a 51% majority interest in its former Decorative Surfaces segment to certain funds managed by Clayton, Dubilier & Rice, LLC ("CD&R"). As a result of the transaction, the Company owns common units (the "Common Units") of Wilsonart International Holdings LLC ("Wilsonart") initially representing approximately 49% (on an as-converted basis) of the total outstanding equity. CD&R owns cumulative convertible participating preferred units (the "Preferred Units") of Wilsonart representing approximately 51% (on an as-converted basis) of the total outstanding equity. The Preferred Units rank senior to the Common Units as to dividends and liquidation preference, and accrue dividends at a rate of 10% per annum. Due to the Company's continuing involvement through its 49% ownership interest in Wilsonart, the former Decorative Surfaces segment was not presented as discontinued operations. The ownership interest in Wilsonart is reported using the equity method of accounting. The Company's proportionate share in income (loss) of Wilsonart is reported in Other income (expense) in the consolidated statement of income. As the Company's investment in Wilsonart is structured as a partnership for U.S. tax purposes, U.S. taxes are recorded separately from the equity investment.

Accrued Expenses as of December 31, 2015 and 2014 consisted of the following accruals:

In millions		2015				2014
Compensation and employee benefits		$	363			$	441
Deferred revenue and customer deposits		169				194
Rebates		125				128
Warranties		46				49
Current portion of pension and other postretirement benefit obligations		15				14
Other		418				461
		$	1,136			$	1,287

The Company accrues for product warranties based on historical experience. The changes in accrued warranties during 2015, 2014 and 2013 were as follows:

In millions		2015				2014				2013
Beginning balance		$	49			$	50			$	51
Charges		(37		)		(41		)		(44		)
Provision charged to expense		36				43				43
Acquisitions and divestitures		—				—				2
Foreign currency translation		(2		)		(3		)		1
Transfer to liabilities held for sale		—				—				(3		)
Ending balance		$	46			$	49			$	50

Debt

Short-term debt represents obligations with a maturity date of one year or less and is stated at cost which approximates fair value. Short-term debt also includes current maturities of long-term debt. Short-term debt as of December 31, 2015 and 2014 consisted of the following:

In millions		2015				2014
Commercial paper		$	498			$	1,413
Bank overdrafts		25				62
Current maturities of long-term debt		1				1
Other borrowings		2				—
		$	526			$	1,476

The Company may issue commercial paper to fund general corporate needs, share repurchases, and small and medium-sized acquisitions. The Company has committed lines of credit of $2.5 billion in the U.S. to support the potential issuances of commercial paper. Of this amount, $1.0 billion is provided under a line of credit agreement with a termination date of August 15, 2018 and $1.5 billion is provided under a line of credit agreement with a termination date of June 8, 2017. No amounts were outstanding under these two facilities at December 31, 2015. As of December 31, 2015, the Company was in compliance with the financial covenants of these line of credit agreements, which include a minimum interest coverage ratio. The weighted-average interest rate on commercial paper was 0.1% at both December 31, 2015 and 2014.

As of December 31, 2015, the Company had unused capacity of approximately $296 million under international debt facilities.

Long-term debt represents obligations with a maturity date greater than one year, and excludes current maturities that have been reclassified to short-term debt.

In April 2015, the FASB issued authoritative guidance to simplify the balance sheet presentation of long-term debt issuance costs. Under the new guidance, long-term debt issuance costs are presented as a reduction of the carrying amount of the related long-term debt. The Company early adopted this guidance in the fourth quarter of 2015 and applied it retrospectively to all periods presented. As of December 31, 2014, the Company restated $38 million of deferred long-term debt issuance costs from Other assets to Long-term debt.

Long-term debt at carrying value and fair value as of December 31, 2015 and 2014 consisted of the following:

				2015								2014
In millions		Effective Interest Rate		Carrying Value				Fair Value				Carrying Value				Fair Value
0.90% notes due February 25, 2017		0.95%		$	649			$	649			$	648			$	648
1.95% notes due March 1, 2019		1.98%		647				655				647				651
6.25% notes due April 1, 2019		6.25%		698				790				697				817
4.88% notes due thru December 31, 2020		4.96%		4				4				5				6
3.375% notes due September 15, 2021		3.43%		347				362				347				369
1.75% Euro notes due May 20, 2022		1.86%		536				564				597				640
1.25% Euro notes due May 22, 2023		1.35%		536				538				—				—
3.50% notes due March 1, 2024		3.54%		695				727				694				735
2.125% Euro notes due May 22, 2030		2.18%		536				530				—				—
3.0% Euro notes due May 19, 2034		3.13%		528				569				588				702
4.875% notes due September 15, 2041		4.97%		635				708				635				746
3.9% notes due September 1, 2042		3.96%		1,080				1,051				1,079				1,110
Other borrowings				6				6				7				7
				$	6,897			$	7,153			$	5,944			$	6,431
Current maturities				(1		)						(1		)
				$	6,896							$	5,943

The approximate fair values of the Company’s long-term debt, including current maturities, were based on a Level 2 valuation model, using observable inputs, which included market rates for comparable instruments as of December 31, 2015 and 2014.

All of the Company's notes listed above represent senior unsecured obligations ranking equal in right of payment.

In 2005, the Company issued $54 million of 4.88% notes due through December 31, 2020 at 100% of face value.

In 2007, the Company, through a wholly-owned European subsidiary, issued €750 million of 5.25% Euro notes due October 1, 2014 at 99.874% of face value. The €750 million of 5.25% Euro notes due October 1, 2014 were repaid on the due date.

In 2009, the Company issued $800 million of 5.15% redeemable notes due April 1, 2014 at 99.92% of face value and $700 million of 6.25% redeemable notes due April 1, 2019 at 99.98% of face value. The $800 million of 5.15% redeemable notes due April 1, 2014 were repaid on the due date.

In 2011, the Company issued $350 million of 3.375% notes due September 15, 2021 at 99.552% of face value and $650 million of 4.875% notes due September 15, 2041 at 98.539% of face value.

In 2012, the Company issued $1.1 billion of 3.9% notes due September 1, 2042 at 99.038% of face value.

In February 2014, the Company issued $650 million of 0.9% notes due February 25, 2017 at 99.861% of face value, $650 million of 1.95% notes due March 1, 2019 at 99.871% of face value, and $700 million of 3.5% notes due March 1, 2024 at 99.648% of face value. Net proceeds from the February 2014 debt issuances were used to repay commercial paper.

In May 2014, the Company issued €500 million of 1.75% Euro notes due May 20, 2022 at 99.16% of face value and €500 million of 3.0% Euro notes due May 19, 2034 at 98.089% of face value. Net proceeds from the May 2014 debt issuances were used for general corporate purposes.

In May 2015, the Company issued €500 million of 1.25% Euro notes due May 22, 2023 at 99.239% of face value and €500 million of 2.125% Euro notes due May 22, 2030 at 99.303% of face value. Net proceeds from the May 2015 debt issuances were used to repay commercial paper and for general corporate purposes.

The Company designated the €1.0 billion of Euro notes issued in May 2015 and the €1.0 billion of Euro notes issued in May 2014 as hedges of a portion of its net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. Refer to the Accumulated Other Comprehensive Income (Loss) note for additional information regarding the net investment hedge.

Scheduled maturities of long-term debt, including current maturities of long-term debt, for the future years ending December 31 are as follows:

In millions
2016	$	1
2017	649
2018	—
2019	1,346
2020	4
2021 and future years	4,897
	$	6,897

Pension and Other Postretirement Benefits—The Company has both funded and unfunded defined benefit pension and other postretirement benefit plans, predominately in the U.S.

The U.S. primary pension plan provides benefits based on years of service and final average salary. The U.S. primary postretirement health care plan is contributory with the participants’ contributions adjusted annually. The U.S. primary postretirement life insurance plan is noncontributory.

Beginning January 1, 2007, the U.S. primary pension and other postretirement benefit plans were closed to new participants. Newly hired employees and employees from acquired businesses that are not participating in these plans are eligible for additional Company contributions under the existing U.S. primary defined contribution retirement plans. The Company’s expense related to defined contribution plans was $77 million in 2015, $78 million in 2014, and $72 million in 2013.

In addition to the U.S. plans, the Company also has defined benefit pension plans in certain other countries, mainly the United Kingdom, Germany, Canada and Switzerland.

Summarized information regarding the Company’s significant defined benefit pension and other postretirement benefit plans related to both continuing and discontinued operations is as follows:

		Pension												Other Postretirement Benefits
In millions		2015				2014				2013				2015				2014				2013
Components of net periodic benefit cost:
Service cost		$	70			$	80			$	87			$	11			$	10			$	12
Interest cost		92				103				100				24				24				24
Expected return on plan assets		(151		)		(159		)		(157		)		(25		)		(25		)		(22		)
Amortization of actuarial (gain) loss		60				48				65				(1		)		(4		)		1
Amortization of prior service cost		1				1				—				1				1				1
Settlement/curtailment (gain) loss		—				1				49				—				(9		)		—
		$	72			$	74			$	144			$	10			$	(3	)		$	16

Net periodic benefit cost was included in the statement of income as follows:

		Pension												Other Postretirement Benefits
In millions		2015				2014				2013				2015				2014				2013
Income from continuing operations		$	72			$	69			$	131			$	10			$	6			$	14
Income from discontinued operations		—				5				13				—				(9		)		2
		$	72			$	74			$	144			$	10			$	(3	)		$	16

The pension settlement charges in 2013 included $45 million tied primarily to higher lump sum pension payments resulting from the exit of Decorative Surfaces employees from the Company's U.S. primary pension plan. These charges were included in Income from continuing operations. Refer to the Other Assets note for further details regarding the Decorative Surfaces transaction.

In addition, the Company recognized a $9 million curtailment gain on the U.S. primary postretirement plan in the second quarter of 2014 and a $2 million curtailment charge on the U.S. primary pension plan in the third quarter of 2013 related to the Company's sale of the Industrial Packaging business and the reclassification of the Industrial Packaging business to discontinued operations, respectively. These curtailments were included in Income from discontinued operations.

During 2014, the Society of Actuaries released a new mortality table, referred to as RP-2014, which is believed to better reflect mortality improvements. The Company used the RP-2014 mortality table to measure its U.S. pension and other postretirement obligations as of December 31, 2014 which resulted in additional actuarial losses of $76 million for pension and $46 million for other postretirement benefits. In 2015, the Company used the updated MP-2015 mortality improvement scale to measure its U.S. pension and other postretirement obligations as of December 31, 2015, which did not have a significant impact.

The following tables provide a rollforward of the plan benefit obligations, plan assets and a reconciliation of funded status for the years ended December 31, 2015 and 2014 for continuing and discontinued operations:

		Pension								Other Postretirement Benefits
In millions		2015				2014				2015				2014
Change in benefit obligation:
Benefit obligation at January 1		$	2,607			$	2,545			$	591			$	519
Service cost		70				80				11				10
Interest cost		92				103				24				24
Plan participants’ contributions		3				3				13				13
Amendments		1				(5		)		—				—
Actuarial (gain) loss		(82		)		240				(43		)		97
Acquisitions and divestitures		—				(97		)		—				(18		)
Benefits paid		(169		)		(192		)		(46		)		(46		)
Medicare subsidy received		—				—				2				2
Settlement/curtailment (gain) loss		—				(2		)		—				(10		)
Foreign currency translation		(60		)		(68		)		—				—
Benefit obligation at December 31		$	2,462			$	2,607			$	552			$	591

		Pension								Other Postretirement Benefits
In millions		2015				2014				2015				2014
Change in plan assets:
Fair value of plan assets at January 1		$	2,557			$	2,487			$	372			$	370
Actual return on plan assets		16				264				(3		)		28
Company contributions		97				127				6				7
Plan participants’ contributions		3				3				13				13
Acquisitions/divestitures		—				(65		)		—				—
Benefits paid		(169		)		(192		)		(46		)		(46		)
Foreign currency translation		(63		)		(67		)		—				—
Fair value of plan assets at December 31		$	2,441			$	2,557			$	342			$	372
Funded status		$	(21	)		$	(50	)		$	(210	)		$	(219	)
Other immaterial plans		(50		)		(52		)		(5		)		(5		)
Net liability at December 31		$	(71	)		$	(102	)		$	(215	)		$	(224	)
The amounts recognized in the statement of financial position as of December 31 consist of:
Other assets		$	191			$	165			$	—			$	—
Accrued expenses		(11		)		(10		)		(4		)		(4		)
Other noncurrent liabilities		(251		)		(257		)		(211		)		(220		)
Net liability at end of year		$	(71	)		$	(102	)		$	(215	)		$	(224	)
The pre-tax amounts recognized in accumulated other comprehensive income consist of:
Net actuarial (gain) loss		$	631			$	638			$	(20	)		$	(6	)
Prior service cost		—				1				(1		)		(1		)
		$	631			$	639			$	(21	)		$	(7	)
Accumulated benefit obligation		$	2,297			$	2,361
Plans with accumulated benefit obligation in excess of plan assets as of December 31:
Projected benefit obligation		$	164			$	168
Accumulated benefit obligation		$	152			$	154
Fair value of plan assets		$	25			$	26

Assumptions

The weighted-average assumptions used in the valuations of pension and other postretirement benefits were as follows:

	Pension									Other Postretirement Benefits
	2015			2014			2013			2015			2014			2013
Assumptions used to determine benefit obligations at December 31:
Discount rate	3.95	%		3.70	%		4.32	%		4.55	%		4.15	%		4.95	%
Rate of compensation increases	3.72	%		3.72	%		3.72	%		—	%		—	%		—	%
Assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.70	%		4.32	%		3.85	%		4.15	%		4.95	%		4.15	%
Expected return on plan assets	6.54	%		7.02	%		7.28	%		7.00	%		7.00	%		7.00	%
Rate of compensation increases	3.72	%		3.72	%		3.86	%		—	%		—	%		—	%

The expected long-term rates of return for pension and other postretirement benefit plans were developed using historical asset class returns while factoring in current market conditions such as inflation, interest rates and asset class performance. Assumed health care cost trend rates have an effect on the amounts reported for the postretirement health care benefit plans. The assumed health care cost trend rates used to determine the postretirement benefit obligation at December 31 were as follows:

	2015			2014			2013
Health care cost trend rate assumed for the next year	6.00	%		8.00	%		8.00	%
Ultimate trend rate	4.50	%		4.50	%		5.00	%
Year the rate reaches the ultimate trend rate	2021			2022			2020

A one percentage-point change in assumed health care cost trend rates would have the following impact:

In millions		1 Percentage-Point Increase				1 Percentage-Point Decrease
Change in service cost and interest cost for 2015		$	—			$	(1	)
Change in postretirement benefit obligation at December 31, 2015		$	7			$	(14	)

Plan Assets

The Company’s overall investment strategy for the assets in the pension funds is to achieve a balance between the goals of growing plan assets and keeping risk at a reasonable level over a long-term investment horizon. In order to reduce unnecessary risk, the pension funds are diversified across several asset classes, securities and investment managers. The target allocations for plan assets are 30% to 50% equity securities, 45% to 60% fixed income securities and 0% to 10% in other types of investments. The Company does not use derivatives for the purpose of speculation, leverage, circumventing investment guidelines or taking risks that are inconsistent with specified guidelines.

The assets in the Company’s postretirement health care plan are primarily invested in life insurance policies. The Company’s overall investment strategy for the assets in the postretirement health care fund is to invest in assets that provide a reasonable tax exempt rate of return while preserving capital.

The following tables present the fair value of the Company’s pension and other postretirement benefit plan assets at December 31, 2015 and 2014, by asset category and valuation methodology. Level 1 assets are valued using unadjusted quoted prices for identical assets in active markets. Level 2 assets are valued using quoted prices or other observable inputs for similar assets. Level 3 assets are valued using unobservable inputs, but reflect the assumptions market participants would be expected to use in pricing the assets. Each financial instrument’s categorization is based on the lowest level of input that is significant to the fair value measurement.

		2015
In millions		Total				Level 1				Level 2				Level 3
Pension Plan Assets:
Cash and equivalents		$	53			$	53			$	—			$	—
Equity securities:
Domestic		1				1				—				—
Foreign		62				62				—				—
Fixed income securities:
Government securities		285				—				285				—
Corporate debt securities		483				—				483				—
Investment contracts with insurance companies		1				—				—				1
Commingled funds:
Mutual funds		145				145				—				—
Collective trust funds		1,347
Partnerships/private equity interests		66
Other		(2		)		—				(2		)		—
		$	2,441			$	261			$	766			$	1
Other Postretirement Benefit Plan Assets:
Cash and equivalents		$	8			$	8			$	—			$	—
Life insurance policies		334
		$	342			$	8			$	—			$	—

		2014
In millions		Total				Level 1				Level 2				Level 3
Pension Plan Assets:
Cash and equivalents		$	164			$	164			$	—			$	—
Equity securities:
Domestic		1				1				—				—
Foreign		72				72				—				—
Fixed income securities:
Government securities		286				—				286				—
Corporate debt securities		378				—				378				—
Mortgage-backed securities		8				—				8				—
Investment contracts with insurance companies		1				—				—				1
Commingled funds:
Mutual funds		317				317				—				—
Collective trust funds		1,252
Partnerships/private equity interests		77
Other		1				—				—				1
		$	2,557			$	554			$	672			$	2
Other Postretirement Benefit Plan Assets:
Cash and equivalents		$	11			$	11			$	—			$	—
Life insurance policies		361
		$	372			$	11			$	—			$	—

Cash and equivalents include cash on hand and instruments with original maturities of three months or less and are valued at cost, which approximates fair value. Equity securities primarily include common and preferred equity securities covering a wide range of industries and geographies that are traded in active markets and are valued based on quoted prices. Fixed income securities primarily consist of U.S. and foreign government bills, notes and bonds, corporate debt securities, asset-

backed securities and investment contracts. The majority of the assets in this category are valued by evaluating bid prices provided by independent financial data services. For securities where market data is not readily available, unobservable market data is used to value the security. Mutual funds are traded in active markets and are valued based on quoted prices. The underlying investments include small-cap equity, international equity and long- and short-term fixed income instruments. Other primarily includes derivative instruments such as interest rate swaps used by fixed income investment managers to offset interest rate sensitivity.

In May 2015, the FASB issued authoritative guidance removing investments measured at net asset value from the fair value hierarchy disclosures as a practical expedient. The Company early adopted this guidance in the fourth quarter of 2015 and applied it retrospectively to all periods presented. Adoption of this guidance resulted in the removal of $1.7 billion of pension and other postretirement plan assets from the Company's fair value hierarchy disclosures as of December 31, 2014. These investments include collective trust funds, partnerships/private equity interests and life insurance policies. Collective trust funds are private funds that are valued at net asset value based on the value of the underlying investments which can be redeemed on a daily basis. The underlying investments include both passively and actively managed U.S. and foreign large- and mid-cap equity funds and short-term investment funds. Partnerships/private equity interests are investments in partnerships where the benefit plan is a limited partner. The investments are valued by the investment managers on a periodic basis using pricing models that use market, income and cost valuation methods. Distributions are received from these funds on a periodic basis through the liquidation of the underlying assets of the fund. Life insurance policies are used to fund other postretirement benefits in order to obtain favorable tax treatment and are valued based on the cash surrender value of the underlying policies. The Company has selected the funds which these assets are invested in and may elect to withdraw funds with proper notice to the insurance company or maintain the policies and receive death benefits as determined by the contracts.

Cash Flows

The Company generally funds its pension and other postretirement benefit plans as required by law or to the extent such contributions are tax deductible. The Company expects to contribute approximately $73 million to its pension plans and $5 million to its other postretirement benefit plans in 2016.

The Company’s portion of the benefit payments that are expected to be paid during the years ending December 31 is as follows:

In millions		Pension				Other Postretirement Benefits
2016		$	173			$	35
2017		176				37
2018		178				38
2019		180				39
2020		178				39
Years 2021-2025		872				199

Other Noncurrent Liabilities at December 31, 2015 and 2014 consisted of the following:

In millions		2015				2014
Pension benefit obligation		$	251			$	257
Postretirement benefit obligation		211				220
Other		519				525
		$	981			$	1,002

Commitments and Contingencies—The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, including those involving environmental, product liability (including toxic tort) and general liability claims. The Company accrues for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, the Company’s estimates of the outcomes of these matters and its experience in contesting, litigating and settling other similar matters. The Company believes resolution of these matters, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position, liquidity or future operations.

Preferred Stock, without par value, of which 0.3 million shares are authorized and unissued, is issuable in series. The Board of Directors is authorized to fix by resolution the designation and characteristics of each series of preferred stock. The Company has no present commitment to issue its preferred stock.

Common Stock, with a par value of $0.01, Additional Paid-In-Capital and Common Stock Held in Treasury transactions during 2015, 2014, and 2013 are shown below.

		Common Stock							Additional Paid-In- Capital				Common Stock Held in Treasury
In millions		Shares			Amount				Amount				Shares			Amount
Balance, December 31, 2012		549.6			$	5			$	1,012			(94.5	)		$	(4,722	)
During 2013-
Shares issued for stock options		0.4			1				9				4.0			198
Shares withheld for taxes		—			—				—				(0.2	)		(11		)
Shares issued for stock compensation and vesting of restricted stock		—			—				(28		)		0.6			28
Stock compensation expense		—			—				36				—			1
Noncontrolling interest		—			—				(8		)		—			—
Tax benefits related to stock options		—			—				23				—			—
Tax benefits related to defined contribution plans		—			—				2				—			—
Repurchases of common stock		—			—				—				(29.7	)		(2,170		)
Balance, December 31, 2013		550.0			6				1,046				(119.8	)		(6,676		)
During 2014-
Shares issued for stock options		—			—				—				3.0			148
Shares withheld for taxes		—			—				—				(0.1	)		(14		)
Shares issued for stock compensation and vesting of restricted stock		—			—				(26		)		0.5			26
Stock compensation expense		—			—				39				—			—
Tax benefits related to stock options		—			—				33				—			—
Tax benefits related to defined contribution plans		—			—				4				—			1
Repurchases of common stock		—			—				—				(50.4	)		(4,283		)
Balance, December 31, 2014		550.0			6				1,096				(166.8	)		(10,798		)
During 2015-
Shares issued for stock options		—			—				(2		)		1.2			61
Shares withheld for taxes		—			—				—				(0.1	)		(11		)
Shares issued for stock compensation and vesting of restricted stock		—			—				(19		)		0.4			19
Stock compensation expense		—			—				39				—			2
Noncontrolling interest		—			—				(2		)		—			—
Tax benefits related to stock options		—			—				20				—			—
Tax benefits related to defined contribution plans		—			—				3				—			—
Repurchases of common stock		—			—				—				(21.0	)		(2,002		)
Balance, December 31, 2015		550.0			$	6			$	1,135			(186.3	)		$	(12,729	)
Authorized, December 31, 2015		700.0

On May 6, 2011, the Company’s Board of Directors authorized a stock repurchase program, which provided for the repurchase of up to $4.0 billion of the Company’s common stock over an open-ended period of time (the "2011 Program"). Under the 2011 Program, the Company repurchased approximately 1.8 million shares of its common stock at an average price of $43.20 per share during 2011, approximately 35.5 million shares of its common stock at an average price of $56.93 per share during

2012 and approximately 26.4 million shares of its common stock at an average price of $71.89 per share during 2013. As of December 31, 2013, there were no authorized repurchases remaining under the 2011 Program.

On August 2, 2013, the Company’s Board of Directors authorized a new stock repurchase program, which provided for the repurchase of up to an additional $6.0 billion of the Company’s common stock over an open-ended period of time (the "2013 Program"). Under the 2013 Program, the Company repurchased approximately 3.3 million shares of its common stock at an average price of $81.62 per share during 2013, approximately 50.4 million shares of its common stock at an average price of $84.92 per share during 2014, and approximately 14.9 million shares of its common stock at an average price of $96.84 during 2015. As of December 31, 2015, there were no authorized repurchases remaining under the 2013 Program.

On February 13, 2015, the Company's Board of Directors authorized a new stock repurchase program, which provides for the repurchase of up to an additional $6.0 billion of the Company’s common stock over an open-ended period of time (the "2015 Program"). Under the 2015 Program, the Company repurchased approximately 6.1 million shares of its common stock at an average price of $91.78 per share during 2015. As of December 31, 2015, there was approximately $5.4 billion of authorized repurchases remaining under the 2015 Program.

Cash Dividends declared were $2.07 per share in 2015, $1.81 per share in 2014 and $1.60 per share in 2013. Cash dividends paid were $2.005 per share in 2015, $1.745 per share in 2014 and $1.18 per share in 2013. Cash dividends paid during 2013 do not include the dividend payment of $0.38 per share originally scheduled to be paid in January 2013, which was accelerated and paid in December 2012.

Accumulated Other Comprehensive Income (Loss)—In March 2013, new accounting guidance was issued which clarifies that an entity should release cumulative translation adjustments into net income when the entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity, which is consistent with the Company's prior accounting policy. The new guidance became effective for the Company on January 1, 2014 and did not have any impact on the Company's financial statements.

The changes in accumulated other comprehensive income (loss) during 2015, 2014 and 2013 were as follows:

In millions		2015				2014				2013
Beginning balance		$	(658	)		$	384			$	293
Foreign currency translation adjustments during the period		(800		)		(806		)		(200		)
Foreign currency translation adjustments reclassified to income		—				(133		)		7
Income taxes		(60		)		—				—
Total foreign currency translation adjustments		(860		)		(939		)		(193		)
Pension and other postretirement benefit adjustments during the period		(41		)		(224		)		327
Pension and other postretirement benefit adjustments reclassified to income		61				54				122
Income taxes		(6		)		67				(165		)
Total pension and other postretirement benefit adjustments		14				(103		)		284
Ending balance		$	(1,504	)		$	(658	)		$	384

Foreign currency translation adjustments reclassified to income are primarily related to the disposal of certain discontinued operations and were included in the related gain or loss upon disposal. Refer to the Discontinued Operations note for additional information regarding the sale of the Company's discontinued operations.

Pension and other postretirement benefit adjustments reclassified to income represent the amortization of actuarial losses and prior service cost, and settlement and curtailment charges recognized in net periodic benefit cost. Refer to the Pension and Other Postretirement Benefits note for the amounts included in net periodic benefit cost. Pension and other postretirement benefit adjustments reclassified to income also include the reclass of deferred losses of $6 million for each of the years ended December 31, 2014 and 2013 related to the disposal of certain discontinued operations. Refer to the Discontinued Operations note for additional information regarding the sale of the Company's discontinued operations.

The Company designated €1.0 billion of Euro notes issued in May 2014 and €1.0 billion of Euro notes issued in May 2015 as hedges of a portion of its net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. Changes in the value of this debt resulting from fluctuations in the Euro to U.S. Dollar exchange rate have been recorded as foreign currency translation adjustments within Accumulated other comprehensive income (loss). The cumulative unrealized gain recorded in Accumulated other comprehensive income (loss) related to the net investment hedge was $308 million and $158 million as of December 31, 2015 and December 31, 2014, respectively.

As of December 31, 2015 and 2014, the ending balance of Accumulated other comprehensive income (loss) consisted of cumulative translation adjustment losses of $1.1 billion and $265 million, respectively, and unrecognized pension and other postretirement benefits costs of $379 million and $393 million, respectively. The estimated unrecognized benefit cost that will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit cost in 2016 is $43 million for pension and other postretirement benefits.

Stock-Based Compensation—On May 8, 2015 (the "Effective Date"), the 2015 Long-Term Incentive Plan (the "2015 Plan") was approved by shareholders. As of the Effective Date, no additional awards will be granted to employees under the 2011 Long-Term Incentive Plan (the "2011 Plan"). The significant terms of stock options and restricted stock units ("RSUs") were not changed under the 2015 Plan. Stock options and RSUs have been issued to officers and other management employees under these plans. Stock options generally vest over a four-year period and have a maturity of ten years from the issuance date. RSUs generally "cliff" vest after a three-year period and include units with and without performance criteria. RSUs with performance criteria provide for full "cliff" vesting after three years if the Compensation Committee certifies that the performance goals have been met. Upon vesting, the holder will receive one share of common stock of the Company for each vested RSU.

Prior to February 2013, the Company generally issued new shares from its authorized but unissued share pool to cover the exercised options and vested RSUs. Commencing in February 2013, the Company began issuing shares from treasury stock. As of December 31, 2015, approximately 17 million shares of ITW common stock were reserved for issuance under these plans.

The Company records compensation expense for the grant date fair value of stock awards over the remaining service periods of those awards. The following table summarizes the Company’s stock-based compensation expense:

In millions		2015				2014				2013
Pre-tax compensation expense		$	35			$	34			$	30
Tax benefit		(12		)		(12		)		(10		)
Total stock-based compensation expense, net of tax		$	23			$	22			$	20

There was no pre-tax stock-based compensation expense included in income from discontinued operations in 2015. Pre-tax stock-based compensation expense included in Income from discontinued operations was $5 million in 2014 and $6 million in 2013.

The following table summarizes activity related to non-vested RSUs during 2015:

Shares in millions		Number of Shares			Weighted-Average Grant-Date Fair Value
Unvested, January 1, 2015		1.0			$60.68
Granted		0.3			92.44
Vested		(0.4	)		52.11
Canceled		(0.1	)		70.96
Unvested, December 31, 2015		0.8			73.58

The following table summarizes stock option activity for the year ended December 31, 2015:

In millions except exercise price and contractual terms		Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Under option, January 1, 2015		7.1			$56.25
Granted		0.6			98.26
Exercised		(1.2	)		49.41
Canceled or expired		(0.1	)		71.41
Under option, December 31, 2015		6.4			61.44		5.7		$201
Exercisable, December 31, 2015		4.5			54.19		4.7		$175

The fair value of RSUs is determined by reducing the closing market price on the date of the grant by the present value of projected dividends over the vesting period. Stock option exercise prices are equal to the common stock fair market value on the date of grant. The Company uses a binomial option pricing model to estimate the fair value of the stock options granted. The following summarizes the assumptions used in the models:

		2015		2014		2013
Risk-free interest rate		0.23-2.25%		0.16-2.83%		0.2-2.9%
Weighted-average volatility		23.0%		22.9%		21.1%
Dividend yield		2.11%		2.46%		2.72%
Expected years until exercise		6.9-8.0		6.7-7.9		6.6-7.6

Lattice-based option valuation models, such as the binomial option pricing model, incorporate ranges of assumptions for inputs. The risk-free rate of interest for periods within the contractual life of the option is based on a zero-coupon U.S. government instrument over the contractual term of the equity instrument. Expected volatility is based on implied volatility from traded options on the Company’s stock and historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise timing and employee termination rates within the valuation model. The weighted-average dividend yield is based on historical information. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. The ranges presented result from separate groups of employees assumed to exhibit different behavior.

The weighted-average grant-date fair value of stock options granted during 2015, 2014 and 2013 was $20.58, $15.14 and $10.06 per share, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 was $55 million, $115 million and $108 million, respectively. As of December 31, 2015, there was $12 million of total unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 1.7 years. Exercise of stock options during the years ended December 31, 2015, 2014 and 2013 resulted in cash receipts of $59 million, $148 million and $206 million, respectively. The total fair value of vested stock option awards during the years ended December 31, 2015, 2014 and 2013 was $13 million, $16 million and $16 million, respectively.

As of December 31, 2015, there was $18 million of total unrecognized compensation cost related to unvested RSUs. That cost is expected to be recognized over a weighted-average remaining contractual life of 1.5 years. The total fair value of vested RSU awards during the years ended December 31, 2015, 2014 and 2013 was $20 million, $27 million and $23 million, respectively.

Segment Information—The Company's operations are organized and managed based on similar product offerings and similar end markets, and are reported to senior management as the following seven segments: Automotive OEM; Test & Measurement and Electronics; Food Equipment; Polymers & Fluids; Welding; Construction Products; and Specialty Products.

The following is a description of the Company's seven segments:

Automotive OEM—This segment is a global, niche supplier to top tier OEMs, providing unique innovation to address pain points for sophisticated customers with complex problems. Businesses in this segment produce components and fasteners for automotive-related applications.

Test & Measurement and Electronics—This segment is a branded and innovative producer of test and measurement and electronic manufacturing and MRO solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics.

Food Equipment—This segment is a highly focused and branded industry-leader in commercial food equipment differentiated by innovation and integrated service offerings.

Polymers & Fluids—This segment is a highly branded supplier to niche markets that require value-added, differentiated products. Businesses in this segment produce adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance.

Welding—This segment is a branded value-added equipment and specialty consumable manufacturer with innovative and leading technology. Businesses in this segment produce arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications.

Construction Products—This segment is a branded supplier of innovative engineered fastening systems and solutions.

Specialty Products—This segment is focused on diversified niche market opportunities that deliver strong operating results with substantial patent protection producing beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.

Segments are allocated a fixed overhead charge based on the segment's revenue. Expenses not charged to the segments are reported separately as Unallocated. Because the Unallocated category includes a variety of items, it is subject to fluctuations on a quarterly and annual basis.

Segment information for 2015, 2014 and 2013 was as follows:

In millions		2015				2014				2013
Operating revenue:
Automotive OEM		$	2,529			$	2,590			$	2,396
Test & Measurement and Electronics		1,969				2,204				2,176
Food Equipment		2,096				2,177				2,047
Polymers & Fluids		1,712				1,927				1,993
Welding		1,650				1,850				1,837
Construction Products		1,587				1,707				1,717
Specialty Products		1,885				2,055				2,007
Intersegment revenue		(23		)		(26		)		(38		)
Total		$	13,405			$	14,484			$	14,135
Operating income:
Automotive OEM		$	613			$	600			$	490
Test & Measurement and Electronics		322				340				321
Food Equipment		498				453				385
Polymers & Fluids		335				357				335
Welding		415				479				464
Construction Products		316				289				238
Specialty Products		439				440				408
Total Segments		2,938				2,958				2,641
Unallocated		(71		)		(70		)		(127		)
Total		$	2,867			$	2,888			$	2,514
Depreciation and amortization and impairment of goodwill and intangible assets:
Automotive OEM		$	76			$	79			$	80
Test & Measurement and Electronics		110				115				119
Food Equipment		48				52				50
Polymers & Fluids		95				99				103
Welding		37				38				37
Construction Products		36				43				49
Specialty Products		75				81				84
Total Segments		477				507				522
Discontinued Operations		—				—				91
Total		$	477			$	507			$	613
Plant and equipment additions:
Automotive OEM		$	106			$	96			$	119
Test & Measurement and Electronics		32				56				39
Food Equipment		37				47				37
Polymers & Fluids		20				28				28
Welding		23				36				35
Construction Products		26				41				32
Specialty Products		40				54				47
Total Segments		284				358				337
Discontinued Operations		—				3				31
Total		$	284			$	361			$	368
Identifiable assets:
Automotive OEM		$	1,419			$	1,454			$	1,571
Test & Measurement and Electronics		2,448				2,615				2,772
Food Equipment		1,054				1,123				1,184
Polymers & Fluids		2,034				2,257				2,420
Welding		747				879				936
Construction Products		1,129				1,249				1,309
Specialty Products		1,659				1,798				1,939
Total Segments		10,490				11,375				12,131
Corporate		5,239				6,090				5,632
Assets held for sale		—				—				1,836
Total		$	15,729			$	17,465			$	19,599

Identifiable assets by segment are those assets that are specifically used in that segment. Corporate assets are principally cash and equivalents, investments and other general corporate assets.

Enterprise-wide information for 2015, 2014 and 2013 was as follows:

In millions		2015				2014				2013
Operating Revenue by Geographic Region:
United States		$	6,167			$	6,191			$	6,030
Canada/Mexico		928				993				973
Total North America		7,095				7,184				7,003
Europe, Middle East and Africa		3,725				4,319				4,162
Asia Pacific		2,197				2,427				2,366
South America		388				554				604
		$	13,405			$	14,484			$	14,135

Operating revenue by geographic region is based on the customers' locations. Long-lived assets in any single country outside of the U.S. did not exceed 10% of the Company's total long-lived assets. No single customer accounted for more than 5% of consolidated revenues in 2015, 2014 or 2013. Additionally, the Company has thousands of product lines within its businesses; therefore, providing operating revenue by product line is not practicable.

QUARTERLY AND COMMON STOCK DATA (UNAUDITED)

Quarterly Financial Data

The unaudited quarterly financial data included as supplementary data reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

		Three Months Ended
		March 31								June 30								September 30								December 31
In millions except per share amounts		2015				2014				2015				2014				2015				2014				2015				2014
Operating revenue		$	3,342			$	3,569			$	3,434			$	3,719			$	3,354			$	3,692			$	3,275			$	3,504
Cost of revenue		1,970				2,158				2,024				2,219				1,953				2,182				1,941				2,114
Operating income		697				667				730				763				761				772				679				686
Income from continuing operations		458				428				480				494				511				507				450				461
Income (loss) from discontinued operations		—				45				—				998				—				24				—				(11		)
Net income		458				473				480				1,492				511				531				450				450
Income per share from continuing operations:
Basic		1.22				1.01				1.31				1.22				1.40				1.29				1.24				1.19
Diluted		1.21				1.01				1.30				1.21				1.39				1.28				1.23				1.18
Net income per share:
Basic		1.22				1.12				1.31				3.69				1.40				1.35				1.24				1.17
Diluted		1.21				1.11				1.30				3.66				1.39				1.34				1.23				1.16

In the second quarter of 2014, the Company recorded an after-tax gain of $1.1 billion, or $2.82 per diluted share, related to the sale of the Industrial Packaging business, which was included in Income (loss) from discontinued operations.