Summary
Illinois Tool Works Inc. (ITW) filed an 8-K on July 23, 2018, to announce its second quarter 2018 financial results, as detailed in a press release furnished with the filing. The report emphasizes the company's use of non-GAAP financial measures, including adjusted metrics that exclude the impact of the 2017 Tax Cuts and Jobs Act and a specific legal settlement, to provide a clearer view of underlying operational performance and facilitate peer comparison. Key non-GAAP measures highlighted include free cash flow and adjusted after-tax return on average invested capital (ROIC). Free cash flow is defined as operating cash flow less capital expenditures, representing cash available for dividends, share repurchases, acquisitions, and debt repayment. Adjusted ROIC is presented to measure operational efficiency in capital utilization, with the prior year's calculation excluding the aforementioned legal settlement for enhanced comparability. Investors are directed to the furnished press release for detailed reconciliations of these non-GAAP measures.
Key Highlights
- 1ITW announced its second quarter 2018 financial results via a press release furnished with the 8-K filing.
- 2The company utilizes non-GAAP financial measures to present a more insightful view of its operational performance.
- 3Adjusted financial metrics are provided, excluding the impacts of the Tax Cuts and Jobs Act of 2017 and a 2017 legal settlement.
- 4Free cash flow (FCF) is presented as a key non-GAAP measure, defined as operating cash flow less capital expenditures.
- 5Adjusted after-tax Return on Average Invested Capital (ROIC) is used to evaluate the effectiveness of capital deployment.
- 6The company believes these non-GAAP measures aid investors in understanding underlying performance and comparing ITW to its peers.
- 7Detailed reconciliations for non-GAAP measures are available in the furnished press release (Exhibit 99.1).