ITW Reports Third Quarter 2024 Results

GlobeNewswire Inc.

October 30, 2024 12:00PM GMT

  • Revenue of $4.0 billion, a decrease of 2% as organic growth declined 1%
  • Operating margin of 26.5% as enterprise initiatives contributed 130 basis points
  • GAAP EPS of $3.91 included a divestiture gain of $1.26; ex-gain EPS of $2.65, an increase of 4%
  • Raising full year GAAP EPS guidance by $1.33 to a range of $11.63 to $11.73 per share

GLENVIEW, Ill., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported its third quarter 2024 results.

“ITW delivered solid third quarter results, as our worldwide team continued to successfully navigate and overcome market challenges with strong operational execution as evidenced by operating margin of 26.5 percent, including 130 basis points contribution from enterprise initiatives, and EPS growth to $2.65 per share excluding a divesture gain,” said Christopher A. O’Herlihy, President and Chief Executive Officer. “All year, our focused execution and operational excellence have enabled the Company to effectively counter persistent market headwinds and achieve solid growth in margin and profitability while we continued to manage and invest in ITW to maximize growth and performance over the long term.”

“As we look ahead to the balance of the year and beyond, ITW remains well-positioned to continue to execute at a high level through these near-term end market macro challenges while we remain focused on driving continued progress on our long-term strategy to build above-market organic growth, fueled by customer-back innovation, into a core ITW strength,” O’Herlihy concluded.

Third Quarter 2024 Results
Third quarter revenue of $4.0 billion declined by 1.6 percent as organic growth declined by 1.4 percent. Foreign currency translation impact reduced revenue by 0.4 percent and acquisitions increased revenue by 0.2 percent.

GAAP EPS increased 53 percent to $3.91 per share and included a divestiture gain of $1.26 from the previously announced sale of the Company’s equity interest in Wilsonart International Holdings LLC (“Wilsonart”). Excluding this gain, EPS of $2.65 increased four percent.

Operating income was $1.05 billion and operating margin of 26.5 percent was flat with prior year. Enterprise initiatives contributed 130 basis points and six of seven segments expanded operating margin. Sequentially, operating margin improved 30 basis points from the second quarter of 2024.

Operating cash flow was $891 million, and free cash flow was $783 million, with a conversion rate to adjusted net income of 102 percent. During the quarter, the company repurchased $375 million of its own shares and raised its dividend seven percent to an annualized $6.00 per share. The effective tax rate for the third quarter was 14.9 percent.

Wilsonart Divestiture
On August 5, 2024, the company announced the sale of its noncontrolling equity interest in Wilsonart. Proceeds from the transaction, net of transaction costs, were $395 million, resulting in a pre-tax gain of $363 million. Income taxes on the gain were more than offset by a discrete tax benefit of $107 million related to the utilization of capital loss carryforwards which resulted in a favorable GAAP EPS impact of $1.26. The sale is not expected to have a material impact on the Company’s financial results in future quarters.

2024 Guidance
ITW is incorporating the impact of the divestiture gain and a lower projected effective tax rate for the full year of approximately 21.5 percent into its 2024 guidance and raising GAAP EPS by $1.33 from the previous range of $10.30 to $10.40 to a new range of $11.63 to $11.73 per share. Based on current levels of demand and foreign currency exchange rates, the Company is maintaining its previous guidance for revenue and organic growth to be approximately flat for 2024. Operating margin is projected to be in the range of 26.5 to 27 percent, an improvement of 165 basis points at the midpoint, with enterprise initiatives projected to contribute more than 100 basis points. Free cash flow is projected to be approximately 100 percent of adjusted net income and the company plans to repurchase approximately $1.5 billion of its own shares.

Non-GAAP Measures
This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.

Forward-looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding global supply chain challenges, expected impact of inflation including raw material inflation and rising interest rates, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted income per share, expected dividend payments, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, the impact of recent or potential acquisitions and/or divestitures, and the Company’s 2024 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the Company’s expectations include those that are detailed in ITW’s Form 10-K for 2023 and subsequent reports filed with the SEC.

About Illinois Tool Works

ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16.1 billion in 2023. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 45,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com

Investor Relations & Media Contact:   
Erin Linnihan
Tel: 224.661.7431
investorrelations@itw.com | mediarelations@itw.com

 

 

 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF INCOME (UNAUDITED)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

In millions except per share amounts

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Operating Revenue

$

3,966

 

 

$

4,031

 

 

$

11,966

 

 

$

12,124

 

Cost of revenue

 

2,230

 

 

 

2,319

 

 

 

6,637

 

 

 

7,004

 

Selling, administrative, and research and development expenses

 

658

 

 

 

615

 

 

 

2,020

 

 

 

1,980

 

Amortization and impairment of intangible assets

 

26

 

 

 

27

 

 

 

76

 

 

 

88

 

Operating Income

 

1,052

 

 

 

1,070

 

 

 

3,233

 

 

 

3,052

 

Interest expense

 

(69

)

 

 

(67

)

 

 

(215

)

 

 

(196

)

Other income (expense)

 

379

 

 

 

10

 

 

 

421

 

 

 

40

 

Income Before Taxes

 

1,362

 

 

 

1,013

 

 

 

3,439

 

 

 

2,896

 

Income Taxes

 

202

 

 

 

241

 

 

 

701

 

 

 

656

 

Net Income

$

1,160

 

 

$

772

 

 

$

2,738

 

 

$

2,240

 

 

 

 

 

 

 

 

 

Net Income Per Share:

 

 

 

 

 

 

 

Basic

$

3.92

 

 

$

2.55

 

 

$

9.20

 

 

$

7.38

 

Diluted

$

3.91

 

 

$

2.55

 

 

$

9.17

 

 

$

7.36

 

 

 

 

 

 

 

 

 

Cash Dividends Per Share:

 

 

 

 

 

 

 

Paid

$

1.40

 

 

$

1.31

 

 

$

4.20

 

 

$

3.93

 

Declared

$

1.50

 

 

$

1.40

 

 

$

4.30

 

 

$

4.02

 

 

 

 

 

 

 

 

 

Shares of Common Stock Outstanding During the Period:

 

 

 

 

 

 

 

Average

 

296.1

 

 

 

301.9

 

 

 

297.6

 

 

 

303.4

 

Average assuming dilution

 

297.0

 

 

 

303.0

 

 

 

298.5

 

 

 

304.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION (UNAUDITED)

 

 

 

 

In millions

September 30, 2024

 

December 31, 2023

Assets

 

 

 

Current Assets:

 

 

 

Cash and equivalents

$

947

 

 

$

1,065

 

Trade receivables

 

3,226

 

 

 

3,123

 

Inventories

 

1,817

 

 

 

1,707

 

Prepaid expenses and other current assets

 

314

 

 

 

340

 

Total current assets

 

6,304

 

 

 

6,235

 

 

 

 

 

Net plant and equipment

 

2,071

 

 

 

1,976

 

Goodwill

 

4,980

 

 

 

4,909

 

Intangible assets

 

617

 

 

 

657

 

Deferred income taxes

 

468

 

 

 

479

 

Other assets

 

1,384

 

 

 

1,262

 

 

$

15,824

 

 

$

15,518

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current Liabilities:

 

 

 

Short-term debt

$

1,768

 

 

$

1,825

 

Accounts payable

 

556

 

 

 

581

 

Accrued expenses

 

1,655

 

 

 

1,663

 

Cash dividends payable

 

443

 

 

 

419

 

Income taxes payable

 

205

 

 

 

187

 

Total current liabilities

 

4,627

 

 

 

4,675

 

 

 

 

 

Noncurrent Liabilities:

 

 

 

Long-term debt

 

6,578

 

 

 

6,339

 

Deferred income taxes

 

129

 

 

 

326

 

Noncurrent income taxes payable

 

 

 

 

151

 

Other liabilities

 

1,098

 

 

 

1,014

 

Total noncurrent liabilities

 

7,805

 

 

 

7,830

 

 

 

 

 

Stockholders' Equity:

 

 

 

Common stock

 

6

 

 

 

6

 

Additional paid-in-capital

 

1,651

 

 

 

1,588

 

Retained earnings

 

28,583

 

 

 

27,122

 

Common stock held in treasury

 

(25,000

)

 

 

(23,870

)

Accumulated other comprehensive income (loss)

 

(1,849

)

 

 

(1,834

)

Noncontrolling interest

 

1

 

 

 

1

 

Total stockholders' equity

 

3,392

 

 

 

3,013

 

 

$

15,824

 

 

$

15,518

 

 

 

 

 

 

 

 

 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)

Three Months Ended September 30,

2024

Dollars in millions

Total
Revenue

Operating
Income

Operating
Margin

Automotive OEM

$

772

 

$

150

 

19.4

%

Food Equipment

 

677

 

 

193

 

28.4

%

Test & Measurement and Electronics

 

697

 

 

179

 

25.7

%

Welding

 

462

 

 

149

 

32.3

%

Polymers & Fluids

 

448

 

 

125

 

27.9

%

Construction Products

 

479

 

 

145

 

30.2

%

Specialty Products

 

438

 

 

136

 

31.1

%

Intersegment

 

(7

)

 

 

%

Total Segments

 

3,966

 

 

1,077

 

27.1

%

Unallocated

 

 

 

(25

)

%

Total Company

$

3,966

 

$

1,052

 

26.5

%

Nine Months Ended September 30,

2024

Dollars in millions

Total
Revenue

Operating
Income

Operating
Margin

Automotive OEM

$

2,403

 

$

469

 

19.5

%

Food Equipment

 

1,975

 

 

537

 

27.2

%

Test & Measurement and Electronics

 

2,071

 

 

501

 

24.2

%

Welding

 

1,404

 

 

458

 

32.6

%

Polymers & Fluids

 

1,334

 

 

364

 

27.3

%

Construction Products

 

1,471

 

 

436

 

29.6

%

Specialty Products

 

1,327

 

 

410

 

30.9

%

Intersegment

 

(19

)

 

 

%

Total Segments

 

11,966

 

 

3,175

 

26.5

%

Unallocated

 

 

 

58

 

%

Total Company

$

11,966

 

$

3,233

 

27.0

%

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)

Q3 2024 vs. Q3 2023 Favorable/(Unfavorable)

Operating Revenue

Automotive
OEM

Food
Equipment

Test &
Measurement
and
Electronics

Welding

Polymers &
Fluids

Construction
Products

Specialty
Products

Total ITW

Organic

(3.0)

%

(0.3)

%

(1.5)

%

(1.0)

%

1.3 

%

(8.8)

%

6.0 

%

(1.4)

%

Acquisitions/

Divestitures

%

%

1.0 

%

%

%

%

%

0.2 

%

Translation

(0.3)

%

0.1 

%

0.3 

%

(0.3)

%

(3.2)

%

0.7 

%

(0.3)

%

(0.4)

%

Operating Revenue

(3.3)

%

(0.2)

%

(0.2)

%

(1.3)

%

(1.9)

%

(8.1)

%

5.7 

%

(1.6)

%

Q3 2024 vs. Q3 2023 Favorable/(Unfavorable)

Change in Operating Margin

Automotive
OEM

Food
Equipment

Test &
Measurement
and
Electronics

Welding

Polymers &
Fluids

Construction Products

Specialty
Products

Total ITW

Operating Leverage

(60) bps

(10) bps

(40) bps

(20) bps

20 bps

(170) bps

100 bps

(20) bps

Changes in Variable Margin & OH Costs

80 bps

150 bps

270 bps

90 bps

10 bps

250 bps

270 bps

40 bps

Total Organic

20 bps

140 bps

230 bps

70 bps

30 bps

80 bps

370 bps

20 bps

Acquisitions/

Divestitures

(50) bps

(10) bps

Restructuring/Other

30 bps

(30) bps

10 bps

(50) bps

(50) bps

(40) bps

(10) bps

Total Operating Margin Change

50 bps

110 bps

190 bps

70 bps

(20) bps

30 bps

330 bps

 

 

 

 

 

 

 

 

 

Total Operating Margin % *

19.4%

28.4%

25.7%

32.3%

27.9%

30.2%

31.1%

26.5%

 

 

 

 

 

 

 

 

 

* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets

30 bps

50 bps

170 bps

- bps

150 bps

10 bps

20 bps

70 bps **

** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.06) on GAAP earnings per share for the third quarter of 2024.

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

SEGMENT DATA (UNAUDITED)

YTD 2024 vs. YTD 2023 Favorable/(Unfavorable)

Operating Revenue

Automotive
OEM

Food
Equipment

Test &
Measurement
and
Electronics

Welding

Polymers &
Fluids

Construction
Products

Specialty
Products

Total ITW

Organic

0.3 

%

0.3 

%

(2.0)

%

(3.1)

%

1.0 

%

(6.5)

%

6.0 

%

(0.7)

%

Acquisitions/

Divestitures

%

%

0.9 

%

%

%

%

(0.7)

%

0.1 

%

Translation

(1.0)

%

0.1 

%

(0.3)

%

(0.1)

%

(3.2)

%

(0.1)

%

%

(0.7)

%

Operating Revenue

(0.7)

%

0.4 

%

(1.4)

%

(3.2)

%

(2.2)

%

(6.6)

%

5.3 

%

(1.3)

%

YTD 2024 vs. YTD 2023 Favorable/(Unfavorable)

Change in Operating Margin

Automotive
OEM

Food
Equipment

Test &
Measurement
and
Electronics

Welding

Polymers &
Fluids

Construction
Products

Specialty
Products

Total ITW

Operating Leverage

10 bps

(50) bps

(50) bps

20 bps

(130) bps

120 bps

(20) bps

Changes in Variable Margin & OH Costs

190 bps

140 bps

50 bps

90 bps

240 bps

290 bps

210 bps

Total Organic

190 bps

10 bps

90 bps

110 bps

110 bps

410 bps

190 bps

Acquisitions/

Divestitures

(50) bps

20 bps

(10) bps

Restructuring/Other

30 bps

(10) bps

10 bps

(40) bps

20 bps

Total Operating Margin Change

220 bps

40 bps

10 bps

110 bps

70 bps

450 bps

180 bps

 

 

 

 

 

 

 

 

 

Total Operating Margin % *

19.5%

27.2%

24.2%

32.6%

27.3%

29.6%

30.9%

27.0%

 

 

 

 

 

 

 

 

 

* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets

30 bps

40 bps

180 bps

10 bps

150 bps

20 bps

20 bps

70 bps **

** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.19) on GAAP earnings per share for the first nine months of 2024.

 

 

 

 

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

 

 

 

 

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

Dollars in millions

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Numerator:

 

 

 

 

 

 

 

Net Income

$

1,160

 

 

$

772

 

 

$

2,738

 

 

$

2,240

 

Net discrete tax benefit related to the third quarter 2024

 

(121

)

 

 

 

 

 

(121

)

 

 

 

Discrete tax benefit related to the second quarter 2023

 

 

 

 

 

 

 

 

 

 

(20

)

Interest expense, net of tax

(1)

 

53

 

 

 

51

 

 

 

164

 

 

 

150

 

Other (income) expense, net of tax

(1)

 

(288

)

 

 

(8

)

 

 

(320

)

 

 

(31

)

Operating income after taxes

$

804

 

 

$

815

 

 

$

2,461

 

 

$

2,339

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Invested capital:

 

 

 

 

 

 

 

Cash and equivalents

$

947

 

 

$

990

 

 

$

947

 

 

$

990

 

Trade receivables

 

3,226

 

 

 

3,163

 

 

 

3,226

 

 

 

3,163

 

Inventories

 

1,817

 

 

 

1,799

 

 

 

1,817

 

 

 

1,799

 

Net plant and equipment

 

2,071

 

 

 

1,904

 

 

 

2,071

 

 

 

1,904

 

Goodwill and intangible assets

 

5,597

 

 

 

5,510

 

 

 

5,597

 

 

 

5,510

 

Accounts payable and accrued expenses

 

(2,211

)

 

 

(2,168

)

 

 

(2,211

)

 

 

(2,168

)

Debt

 

(8,346

)

 

 

(8,066

)

 

 

(8,346

)

 

 

(8,066

)

Other, net

 

291

 

 

 

(128

)

 

 

291

 

 

 

(128

)

Total net assets (stockholders' equity)

 

3,392

 

 

 

3,004

 

 

 

3,392

 

 

 

3,004

 

Cash and equivalents

 

(947

)

 

 

(990

)

 

 

(947

)

 

 

(990

)

Debt

 

8,346

 

 

 

8,066

 

 

 

8,346

 

 

 

8,066

 

Total invested capital

$

10,791

 

 

$

10,080

 

 

$

10,791

 

 

$

10,080

 

 

 

 

 

 

 

 

 

Average invested capital

(2)

$

10,682

 

 

$

10,237

 

 

$

10,466

 

 

$

10,239

 

 

 

 

 

 

 

 

 

Net income to average invested capital

(3)

 

43.4

%

 

 

30.1

%

 

 

34.9

%

 

 

29.2

%

After-tax return on average invested capital

(3)

 

30.0

%

 

 

31.9

%

 

 

31.3

%

 

 

30.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Effective tax rate used for interest expense and other (income) expense for the three months ended September 30, 2024 and 2023 was 23.7% and 23.8%, respectively. Effective tax rate used for interest expense and other (income) expense for the nine months ended September 30, 2024 and 2023 was 23.9% and 23.4%, respectively.

(2)  Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within each of the periods presented.

(3)  Returns for the three months ended September 30, 2024 and 2023 were converted to an annual rate by multiplying the calculated return by 4. Returns for the nine months ended September 30, 2024 and 2023 were converted to an annual rate by dividing the calculated return by 3 and multiplying it by 4.

After-tax ROIC for the nine months ended September 30, 2024 included 110 basis points of favorable impact related to the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses ($117 million pre-tax, or $88 million after-tax) in the first quarter of 2024.

A reconciliation of the tax rate for the three and nine month periods ended September 30, 2024, excluding the third quarter 2024 net discrete tax benefit of $121 million, which included favorable discrete tax benefits of $107 million related to the utilization of capital loss carryforwards upon the sale of Wilsonart International Holdings LLC ("Wilsonart") and $87 million related to a reorganization of the Company's intellectual property, partially offset by a $73 million discrete tax expense related to the remeasurement of unrecognized tax benefits associated with various intercompany transactions, is as follows:

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30, 2024

 

September 30, 2024

Dollars in millions

Income Taxes

 

Tax Rate

 

Income Taxes

 

Tax Rate

As reported

$

202

 

14.9

%

 

$

701

 

20.4

%

Net discrete tax benefit related to the third quarter 2024

 

121

 

8.8

%

 

 

121

 

3.5

%

As adjusted

$

323

 

23.7

%

 

$

822

 

23.9

%

 

 

 

 

 

 

 

 

 

 

 

 

A reconciliation of the tax rate for the nine months ended September 30, 2023, excluding the second quarter 2023 discrete tax benefit of $20 million related to amended 2021 U.S. taxes, is as follows:

 

 

 

Nine Months Ended

 

September 30, 2023

Dollars in millions

Income Taxes

 

Tax Rate

As reported

$

656

 

22.7

%

Discrete tax benefit related to the second quarter 2023

 

20

 

0.7

%

As adjusted

$

676

 

23.4

%

 

 

 

 

 

 

 

 

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

 

 

 

Twelve Months Ended

Dollars in millions

December 31, 2023

Numerator:

 

Net income

$

2,957

 

Discrete tax benefit related to the second quarter 2023

 

(20

)

Interest expense, net of tax

(1)

 

204

 

Other (income) expense, net of tax

(1)

 

(38

)

Operating income after taxes

$

3,103

 

 

 

Denominator:

 

Invested capital:

 

Cash and equivalents

$

1,065

 

Trade receivables

 

3,123

 

Inventories

 

1,707

 

Net plant and equipment

 

1,976

 

Goodwill and intangible assets

 

5,566

 

Accounts payable and accrued expenses

 

(2,244

)

Debt

 

(8,164

)

Other, net

 

(16

)

Total net assets (stockholders' equity)

 

3,013

 

Cash and equivalents

 

(1,065

)

Debt

 

8,164

 

Total invested capital

$

10,112

 

 

 

Average invested capital

(2)

$

10,214

 

 

 

Net income to average invested capital

 

29.0

%

After-tax return on average invested capital

 

30.4

%

(1)  Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2023 was 23.2%.

(2)  Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within the period presented.

A reconciliation of the 2023 effective tax rate excluding the second quarter 2023 discrete tax benefit of $20 million related to amended 2021 U.S. taxes, is as follows:

 

 

 

Twelve Months Ended

 

December 31, 2023

Dollars in millions

Income Taxes

 

Tax Rate

As reported

$

866

 

22.6

%

Discrete tax benefit related to the second quarter 2023

 

20

 

0.6

%

As adjusted

$

886

 

23.2

%

 

 

 

 

 

 

 

 

 

 

FREE CASH FLOW (UNAUDITED)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

Dollars in millions

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

$

891

 

 

$

982

 

 

$

2,167

 

 

$

2,500

 

Less: Additions to plant and equipment

 

(108

)

 

 

(126

)

 

 

(319

)

 

 

(324

)

Free cash flow

$

783

 

 

$

856

 

 

$

1,848

 

 

$

2,176

 

 

 

 

 

 

 

 

 

Net income

$

1,160

 

 

$

772

 

 

$

2,738

 

 

$

2,240

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities to net income conversion rate

 

77

%

 

 

127

%

 

 

79

%

 

 

112

%

Free cash flow to net income conversion rate

 

68

%

(1

)

 

111

%

 

 

67

%

 

 

97

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Excluding the $363 million pre-tax gain on the sale of noncontrolling interest in Wilsonart and related taxes, and a discrete tax benefit of $87 million related to a reorganization of the Company's intellectual property, partially offset by a $73 million discrete tax expense related to the remeasurement of unrecognized tax benefits associated with various intercompany transactions, the free cash flow to net income conversion rate would have been 102% for the three months ended September 30, 2024.

 

 

ADJUSTED NET INCOME PER SHARE - DILUTED (UNAUDITED)

 

 

 

Three Months Ended

 

September 30, 2024

As reported

$

3.91

 

Impact of sale of noncontrolling interest in Wilsonart

(1)

 

(1.26

)

As adjusted

$

2.65

 

 

 

 

 

(1)  Includes the $363 million pre-tax gain on the sale of noncontrolling interest in Wilsonart and related taxes.