Illinois Tool Works Inc.

Good morning. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. For those participating in the Q&A, you will have the opportunity to ask one question, and if needed, one follow-up question. Thank you. Karen Fletcher, Vice President of Investor Relations, you may begin your conference.

Thank you, Brett. Good morning, and welcome to ITW's fourth quarter 2021 conference call. With me today are Chairman and CEO Scott Santee and Senior Vice President and CFO Michael Larson. During today's call, we will discuss ITW's fourth quarter and full year 2021 financial results and provide guidance for full year 2022. Slide number two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2020 Form 10-K and subsequent reports filed with the SEC for more detail about important risks that could cause actual results to differ materially from our expectations. This presentation uses certain non-GAAP measures, and a reconciliation of those measures to the most directly comparable GAAP measures is contained in the press release. Please turn to slide three, and it's now my pleasure to turn the call over to Chairman and CEO Scott Santee.

Thanks, Karen, and good morning, everyone. In Q4, the ITW team delivered another quarter of excellent operational execution and strong financial performance. Six of our seven segments combined delivered 12% organic growth while our auto OEM segment continued to be impacted by near-term limitations on auto production due to component supply shortages, and as a result was down 16% in the quarter. At the enterprise level, we delivered organic growth of 5%, GAAP EBS of $1.93, operating margin of 22.7%, and free cash flow of $695 million, or 114% of net income. Throughout the entirety of 2021, our teams around the world did an exceptional job of delivering for our customers, while responding quickly and decisively to rapidly rising input costs and aggressively executing our win-the-recovery strategy to accelerate profitable market penetration and organic growth across our portfolio. As a result, for the full year, we generated organic growth of 12%, with each of our seven segments delivering organic growth ranging from 6% to 18%. And despite a seemingly constant barrage of input cost increases, we expanded operating margin by 120 basis points to 24.1%, with another 100 basis point contribution from enterprise initiatives. GAAP BPS was an all-time record at $8.51, an increase of 28% versus the prior year. And in 2021, we also raised our dividend by 7%. returned $2.5 billion to our shareholders in the form of dividends and share repurchases, and closed on a very high-quality acquisition in the MTS test and simulation business. Most importantly, we delivered these results while continuing to drive meaningful progress on our path to ITW's full potential through the execution of our long-term enterprise strategy. As you may recall, early in the pandemic, we made the decision to remain fully invested in our people and in our long-term strategy. The people that we retained and the marketing, innovation, and capacity investments that we continued to fund as a result of that decision are fueling the results that ITW is delivering today and have the company very well positioned to continue to accelerate organic growth, add high-quality bolt-on acquisitions, and sustain our best-in-class margins and returns in 2022 and beyond. I want to close by thanking all of our ITW colleagues around the world for their exceptional efforts and dedication. Their performance throughout 2021 provides another proof point that ITW is a company that has the enduring competitive advantages, the agility, and the resilience necessary to deliver top-tier performance in any environment. Now I'll turn the call over to Michael, who will provide more detail on our Q4 and full-year 2021 performance, as well as our 2022 guidance. Michael?