ITW Reports Third Quarter 2024 Results
Illinois Tool Works (ITW) reported Q3 2024 results with revenue of $4.0 billion, showing a 2% decrease as organic growth declined 1.4%. Operating margin remained stable at 26.5%, with enterprise initiatives contributing 130 basis points. The company reported GAAP EPS of $3.91, including a $1.26 divestiture gain from the Wilsonart sale. Excluding this gain, EPS grew 4% to $2.65. ITW raised its full-year GAAP EPS guidance to $11.63-$11.73 per share. The company maintained strong cash flow with $891 million in operating cash flow and $783 million in free cash flow. During Q3, ITW repurchased $375 million of shares and increased its dividend by 7% to $6.00 per share annually.
Illinois Tool Works (ITW) ha riportato i risultati del terzo trimestre del 2024 con un fatturato di 4,0 miliardi di dollari, mostrando una diminuzione del 2% a causa di una crescita organica in calo dell'1,4%. Il margine operativo è rimasto stabile al 26,5%, con le iniziative aziendali che hanno contribuito con 130 punti base. L'azienda ha riportato un EPS GAAP di $3,91, inclusi $1,26 di guadagno da dismissione dalla vendita di Wilsonart. Escludendo questo guadagno, l'EPS è cresciuto del 4% a $2,65. ITW ha alzato le sue previsioni di EPS GAAP per l'intero anno a $11,63-$11,73 per azione. L'azienda ha mantenuto un forte flusso di cassa con $891 milioni di flusso di cassa operativo e $783 milioni di flusso di cassa libero. Durante il terzo trimestre, ITW ha riacquistato azioni per $375 milioni e ha aumentato il suo dividendo del 7% a $6,00 per azione all'anno.
Illinois Tool Works (ITW) reportó los resultados del tercer trimestre de 2024 con ingresos de 4,0 mil millones de dólares, mostrando una disminución del 2% debido a un crecimiento orgánico a la baja del 1,4%. El margen operativo se mantuvo estable en 26,5%, con las iniciativas empresariales contribuyendo con 130 puntos base. La empresa reportó un EPS GAAP de $3,91, incluido una ganancia de desinversión de $1,26 de la venta de Wilsonart. Excluyendo esta ganancia, el EPS creció un 4% a $2,65. ITW elevó sus proyecciones de EPS GAAP para todo el año a $11,63-$11,73 por acción. La empresa mantuvo un fuerte flujo de efectivo con $891 millones en flujo de efectivo operativo y $783 millones en flujo de efectivo libre. Durante el tercer trimestre, ITW recompró acciones por $375 millones y aumentó su dividendo en un 7% a $6,00 por acción anualmente.
일리노이 툴 웍스(ITW)는 2024년 3분기 실적을 보고했으며, 매출은 40억 달러로, 유기적 성장이 1.4% 감소함에 따라 2% 감소했습니다. 운영 마진은 26.5%로 안정적으로 유지되었으며, 기업 이니셔티브가 130베이시스 포인트에 기여했습니다. 이 회사는 GAAP EPS $3.91을 보고했으며, 여기에는 윌슨아트 판매로 인한 $1.26의 divestiture 이익이 포함되어 있습니다. 이 이익을 제외하면, EPS는 4% 증가하여 $2.65에 도달했습니다. ITW는 연간 GAAP EPS 가이드를 주당 $11.63-$11.73로 상향 조정했습니다. 이 회사는 운영 현금 흐름으로 $8억 9천 1백만 달러와 자유 현금 흐름으로 $7억 8천 3백만 달러를 기록하며 강력한 현금 흐름을 유지했습니다. 3분기 동안, ITW는 $3억 7천 5백만 달러의 자사주 매입 및 연간 주당 $6.00로 7%의 배당금을 증가시켰습니다.
Illinois Tool Works (ITW) a publié les résultats du troisième trimestre 2024 avec un chiffre d'affaires de 4,0 milliards de dollars, montrant une baisse de 2 % due à un ralentissement de la croissance organique de 1,4 %. La marge opérationnelle est restée stable à 26,5 %, avec les initiatives d'entreprise contribuant à hauteur de 130 points de base. L'entreprise a signalé un BPA GAAP de 3,91 $, incluant un gain de cession de 1,26 $ de la vente de Wilsonart. En excluant ce gain, le BPA a augmenté de 4 % pour atteindre 2,65 $. ITW a relevé ses prévisions de BPA GAAP pour l'ensemble de l'année à 11,63 $-11,73 $ par action. L'entreprise a maintenu un fort flux de trésorerie avec 891 millions de dollars de flux de trésorerie opérationnel et 783 millions de dollars de flux de trésorerie libre. Au cours du troisième trimestre, ITW a racheté pour 375 millions de dollars d'actions et a augmenté son dividende de 7 % à 6,00 $ par action par an.
Illinois Tool Works (ITW) hat die Ergebnisse für das 3. Quartal 2024 mit einem Umsatz von 4,0 Milliarden Dollar veröffentlicht, was einen Rückgang von 2 % zeigt, da das organische Wachstum um 1,4 % nachgelassen hat. Die operative Marge blieb mit 26,5 % stabil, wobei Unternehmensinitiativen 130 Basispunkte beigetragen haben. Das Unternehmen berichtete von einem GAAP EPS von $3,91, einschließlich eines Veräußerngewinne von $1,26 aus dem Verkauf von Wilsonart. Ohne diesen Gewinn stieg das EPS um 4 % auf $2,65. ITW hob die Prognose für das GAAP EPS für das Gesamtjahr auf $11,63-$11,73 pro Aktie an. Das Unternehmen erzielte einen starken Cashflow mit $891 Millionen aus dem operativen Cashflow und $783 Millionen aus dem freien Cashflow. Im 3. Quartal kaufte ITW Aktien im Wert von $375 Millionen zurück und erhöhte die Dividende um 7 % auf $6,00 pro Aktie jährlich.
- Operating margin stable at 26.5% with 130 basis points improvement from enterprise initiatives
- EPS grew 4% to $2.65 (excluding divestiture gain)
- Strong free cash flow of $783 million with 102% conversion rate
- 7% dividend increase to $6.00 per share annually
- Raised full-year GAAP EPS guidance to $11.63-$11.73
- Revenue declined 1.6% to $4.0 billion
- Organic growth declined 1.4%
- Foreign currency translation reduced revenue by 0.4%
Insights
The Q3 results present a mixed but overall stable picture for ITW. Revenue declined slightly by
The standout metrics include strong free cash flow of
The results demonstrate ITW's resilience in challenging market conditions. While facing headwinds in organic growth, the company's enterprise initiatives and operational execution are effectively maintaining profitability. The
The lower projected tax rate of
- Revenue of
$4.0 billion , a decrease of2% as organic growth declined1% - 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 of4% - Raising full year GAAP EPS guidance by
$1.33 t o a range of$11.63 t o$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
“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
GAAP EPS increased 53 percent to
Operating income was
Operating cash flow was
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
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
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
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 ( | ||||||||||||||||
| 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 ( | ||||||||||||||||
| 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
(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 (
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
| 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
| 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
(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
| 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
| 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
FAQ
What was ITW's Q3 2024 revenue and how did it change year-over-year?
How much did ITW raise its full-year 2024 GAAP EPS guidance?
What was ITW's operating margin in Q3 2024?
How much did ITW's dividend increase in Q3 2024?
