Illinois Tool Works Inc.

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the ITW third quarter earnings 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 the 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.

Okay, thank you, Rob. Good morning, and welcome to ITW's third quarter 2022 conference call. I'm joined by our Chairman and CEO, Scott Santee, and Senior Vice President and CFO, Michael Larson. During today's call, we will discuss ITW's third quarter financial results and our updated guidance for full year 2022. Slide two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2021 form 10K 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 our chairman and CEO, Scott Santee.

Thanks, Karen, and good morning, everyone. In what remains a very dynamic and challenging operating environment, we were pleased with our Q3 performance. On the top line, we delivered 13% revenue growth with 16% organic growth from our base businesses. While we did see some softening in channel inventory reduction actions in our businesses serving the construction, auto aftermarket, commercial welding, and appliance markets, five of our seven segments delivered double-digit organic growth, led by automotive OEM up 25% and food equipment up 23%. With regard to margins, we were glad to see our incremental margins in Q3 return to our normal 30% plus level for the first time in five quarters as the impact of volume growth, enterprise initiatives, pricing actions, and some moderation in the pace of input cost inflation drove incremental margin of 39% and a 130 basis point improvement in operating margin in our base businesses. We've lost roughly 250 basis points of margin due to price costs during this period of rapid inflation, which we fully expect to recover over time once the current inflationary environment stabilizes. And it was certainly good to see a nice, solid first step in that direction in Q3. On the bottom line, strong growth in margin performance resulted in gap EPS of $2.35, up 16% versus Q3 of last year, And that 16% growth includes 13 cents of negative impact from currency. Excluding currency, earnings per share were up 23%. Looking at our current performance, our decision to stay invested in our long-term strategy and in our people during the pandemic and the quality of our team's execution of our win-the-recovery strategy coming out of it are fueling the strong organic growth and financial performance that we are currently delivering. While the economic outlook is becoming increasingly uncertain, demand remains solid across the majority of our business portfolio, and as a result, the company is well-positioned to deliver a strong finish to what has been a very strong year. With that, I'll now turn the call over to Michael, who will provide more detail on the quarter and our updated guidance. Michael.