Summary
Illinois Tool Works Inc. (ITW) filed an 8-K on April 25, 2019, reporting its first-quarter 2019 results. The filing primarily serves to furnish a press release detailing the company's financial performance for the quarter ended March 31, 2019. Investors should note that the company highlighted its use of non-GAAP financial measures, specifically free cash flow and adjusted after-tax return on average invested capital (ROIC), to provide a more operational view of its performance. These metrics are defined and reconciled in the accompanying press release, with ITW emphasizing their utility in assessing cash generation available for shareholder returns and capital allocation, as well as the efficiency of capital deployment in its operations.
Key Highlights
- 1ITW announced its first-quarter 2019 financial results on April 25, 2019.
- 2The company furnished a press release containing its Q1 2019 operational results.
- 3ITW emphasized the use of Free Cash Flow as a key non-GAAP metric for investors.
- 4Free Cash Flow is defined as net cash from operations less additions to plant and equipment.
- 5The company also highlighted Adjusted After-Tax Return on Average Invested Capital (ROIC) as a performance indicator.
- 6ROIC measures the effectiveness of operations in generating profits from invested capital.
- 7Discreet tax benefits from prior periods were excluded for comparability in ROIC calculations.
Frequently Asked Questions
The main purpose of this 8-K filing is to officially report and furnish the press release announcing Illinois Tool Works Inc.'s (ITW) first-quarter 2019 financial results.
ITW emphasizes Free Cash Flow and Adjusted After-Tax Return on Average Invested Capital (ROIC) as key non-GAAP financial measures to provide investors with a clearer view of its operational performance and cash generation capabilities.
ITW defines Free Cash Flow as net cash provided by operating activities less additions to plant and equipment. They believe this metric is useful for investors to evaluate the company's ability to generate cash for dividends, share repurchases, acquisitions, and debt repayment.
The 'adjusted' ROIC means that ITW has excluded certain discrete tax benefits from prior periods ($14 million in Q1 2018 and $15 million in Q3 2018) to provide a more consistent and comparable measure of the operational effectiveness of its invested capital over time.