Illinois Tool Works Inc.

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, press the star followed by the number one key again. 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. Erin Linehan, Vice President of Investor Relations, you may begin your conference.

Thank you, Audra. Good morning, and welcome to ITW's second quarter 2024 conference call. Today, I'm joined by our President and CEO, Chris O'Hare-Lahey, and Senior Vice President and CFO, Michael Larson. During today's call, we will discuss ITW's second quarter financial results and provide an update on our outlook for full year 2024. Slide two is a reminder that this presentation contains forward-looking statements. We refer you to the company's 2023 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 is now my pleasure to turn the call over to our President and CEO, Chris O'Hare-Lahey. Chris?

Thank you, Aaron, and good morning, everyone. As you saw in our press release this morning, during the second quarter, the short cycle demand environment continued to moderate across our portfolio. At the total company level, second quarter revenues came in approximately one percentage point, or $50 million below what they would have been had demand held at the level we were seeing exiting the first quarter. Second quarter organic revenue was down in three segments. with declines year-over-year in CapEx-related products such as welding, test and measurement, and construction. These declines were offset by revenue growth in four segments, resulting in overall flat organic growth year-over-year at the total company level, as compared to our end markets, which we believe were down in the low single digits. As usual, as the quarter progressed, the ITW team executed well on all the elements within our control. as evidenced by record second quarter operating margin, which improved by 140 basis points, 26.2%, supported by 140 basis points of benefit from enterprise initiatives. Operating income grew 4.5% to a second quarter record of $1.05 billion, and GAAP EPS came in at $2.54, up from $2.48 last year. As per our normal practice, we are adjusting our full year guidance in line with demand levels in our businesses as they exist today. Current run rates exiting Q2 projected through the remainder of the year results in about flat organic revenue for the full year. The moderating demand is partially offset by stronger margin performance, and we are raising our margin guidance to 26.5 to 27%. Factoring in both of these elements, lower market demand, and stronger margin performance, we are lowering the midpoint of our EPS guidance by 1% as we narrow the range to $10.30 to $10.40. While the combination of moderating manufacturing capex demand and lower automotive bill forecasts for the second half has us operating in a challenging near-term environment, we will continue to drive our usual high-quality execution on all the elements within our control. while remaining focused on managing and investing to maximize the company's growth and performance over the long term as we build above-market organic growth fueled by customer-backed innovation into a core ITW strength. In this regard, we are very encouraged by the progress we are making on customer-backed innovation in each of our divisions. In concluding my remarks, I want to thank all of our ITW colleagues around the world for their exceptional efforts and for their dedication to serving our customers with excellence and driving continuous progress on our path to ATW's full potential. I will now turn the call over to Michael to discuss our second quarter performance in more detail, as well as our updated full-year guidance. Michael.