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 second 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 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.

Thanks, Rob. Good morning, and welcome to ITW's second quarter 2023 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'll discuss ITW's second quarter financial results and provide an update on our full year 2023 outlook. Slide two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2022 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 our chairman and CEO, Scott Santee.

Thanks, Karen, and good morning, everyone. As you saw from our earnings release this morning, the ITW team delivered another quarter of strong operational execution and financial performance. Quarterly operating income grew 9% and exceeded $1 billion for the first time in ITW's history. Operating margin expanded 170 basis points year on year to 24.8%, a second quarter record, with a 130 basis point contribution from enterprise initiatives. Operating margins for the company are now solidly above 2019 levels, and with a normalizing price-cost environment, we are back to making progress toward our 2030 goal of 30%. With regard to revenues, organic growth was 3%. A stable underlying demand in many of ITW's industrial end markets was partially offset by inventory reductions at our end customers and channel partners in response to stabilizing supply chain performance. We estimate that this impacted organic growth by a point to a point and a half in the quarter. Gap EPS of 248 was also a Q2 record for the company, and excluding one-off tax items in both years, EPS grew 9%. Looking ahead, while customer and channel inventory normalization will continue to be a factor for the next several quarters at least, we expect stable underlying demand and continued strong margin and profitability performance through the balance of the year. As a result, we are raising our full year 2023 EPS guidance by 10 cents at the midpoint. I'll now turn the call over to Michael to discuss our Q2 performance and full year guidance in more detail. Michael.