Illinois Tool Works Inc.

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

Thank you, Tamika. Good morning and welcome to ITW's fourth quarter 2024 conference call. I'm joined by our President and CEO, Chris O'Herlihy, and Senior Vice President and CFO, Michael Larson. During today's call, we will discuss ITW's fourth quarter and full year 2024 financial results and provide guidance for full year 2025. Slide two is a reminder that this presentation contains forward-looking statements. Please refer 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 gap 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 president and CEO, Chris O'Hare-Lehie. Chris?

Thank you, Erin, and good morning, everyone. As you saw in our press release this morning, in Q4, ITW delivered a solid finish to the year. We outperformed our underlying end markets with organic growth turning positive, excluding product line simplification, and we continue to execute well in controlling the controllables to expand operating margins and free cash flow to record levels. GAAP EPS improved 7% to $2.54. In end markets that we believe were down in the low to mid single digits, fourth quarter organic revenue declined half a point, which is a point better than the 1.4% decline in Q3. Excluding the impact of product line simplification, Primarily due to strategic repositioning for growth in our specialty product segment, organic revenue growth was positive 0.4%. Overall demand was steady in Q4, with some improvement relative to demand levels going into the quarter, as revenue came in approximately two percentage points, or $70 million, above what they would have been had demand held at the levels we were seeing exiting the third quarter. In addition to outperforming our end markets, the ITW team did a solid job executing operationally, resulting in operating income of 1.03 billion, an increase of 4%, despite total revenues that were down more than 1%. Record operating margin of 26.2% was an increase of 140 basis points, with 120 basis point contribution from enterprise initiatives. As a result of strong working capital management, primarily around inventory, free cash flow increased 10%. with a conversion to net income of 133 percent. Looking back on 2024, the ITW team delivered another year of solid operational and financial performance, achieving record financial results, including EPS, margins, and returns, as we consistently outperformed underlying end markets, particularly evident in segments such as automotive OEM and construction products, and made continued progress on our next phase key strategic priorities. In 2025, we will build on this momentum and remain laser-focused on building above-market organic growth fueled by customer-backed innovation into a defining ITW strength, on par with our world-class financial and operational capabilities, and deliver differentiated performance in whatever environment we face. We still have some work ahead of us as we position the company to deliver 3% plus CPI yield by 2030. but we are pleased with achieving 2% in 2024, more than double our historical pre-COVID levels. Furthermore, I'm particularly encouraged by the progress we're making on a key leading indicator of CBI yield, patent filings, which increased by 18% in 2024. Turning to our guidance, we are very well positioned to continue to execute at a very high level again in 2025 on both the top and bottom line. Per our usual revenue guidance approach, our organic growth projection of 1% to 3%, excluding TLS, reflects current levels of demand adjusted for seasonality. Although there are certainly some positive signals in our businesses, the current reality is that we are not yet seeing these reflected in orders. Having said that, we are very well positioned to capitalize on an improving demand environment if it should materialize. Our EPS guidance midpoint of $10.35 reflects the fact that we are faced with non-operational headwinds, including a foreign currency translation impact of 30 cents. Our expected operating margin improvement of 100 basis points is powered by another solid contribution from enterprise initiatives independent of volume. In concluding my remarks this morning, I again want to wish to extend my sincere gratitude to our global colleagues for their unwavering dedication to serving our customers and executing our strategy with excellence. Now I'll turn the call over to Michael to provide more detail on the quarter and full year performance, as well as our guidance for 2025. Michael. Thank you, Chris, and good morning, everyone.