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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 2, 2022
_________________________

ILLINOIS TOOL WORKS INC.
(Exact name of registrant as specified in its charter)
Delaware1-479736-1258310
(State or other jurisdiction of incorporation)(Commission File No.)(I.R.S. Employer Identification No.)
155 Harlem AvenueGlenviewIL60025
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 847-724-7500

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockITWNew York Stock Exchange
1.25% Euro Notes due 2023ITW23New York Stock Exchange
0.250% Euro Notes due 2024ITW24ANew York Stock Exchange
0.625% Euro Notes due 2027ITW27New York Stock Exchange
2.125% Euro Notes due 2030ITW30New York Stock Exchange
1.00% Euro Notes due 2031ITW31New York Stock Exchange
3.00% Euro Notes due 2034ITW34New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition

On August 2, 2022, Illinois Tool Works Inc. (the "Company") announced its 2022 second quarter results of operations in the press release furnished as Exhibit 99.1.

Non-GAAP Financial Measures

The Company uses free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. The Company believes this non-GAAP financial measure, along with free cash flow to net income conversion rate, are useful to investors in evaluating the Company’s financial performance and measures the Company's ability to generate cash internally to fund Company initiatives. Free cash flow represents net cash provided by operating activities less additions to plant and equipment. Free cash flow is a measurement that is not the same as net cash flow from operating activities per the statement of cash flows and may not be consistent with similarly titled measures used by other companies. A reconciliation of free cash flow to net cash provided by operating activities is included in the press release furnished as Exhibit 99.1.

The Company uses after-tax return on average invested capital ("After-tax ROIC") to measure the effectiveness of its operations' use of invested capital to generate profits. After-tax ROIC is not defined under U.S. generally accepted accounting principles ("GAAP"). After-tax ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company's ability to generate returns from cash invested in its operations and may be different than the method used by other companies to calculate After-tax ROIC. The Company defines After-tax ROIC as operating income after taxes divided by average invested capital, which is annualized when presented in interim periods. Operating income after taxes is a non-GAAP measure consisting of net income before interest expense and other income (expense), on an after-tax basis, which are excluded as they do not represent returns generated by the Company's operations. For comparability, the Company also excluded the discrete tax benefit of $51 million in the second quarter of 2022 from net income and the effective tax rate for the three and six months ended June 30, 2022. Additionally, for comparability, the Company excluded the discrete tax benefit of $112 million in the second quarter of 2021 from net income and the effective tax rate for the three and six months ended June 30, 2021. For comparability, the Company also excluded the discrete tax benefit of $21 million in the third quarter of 2021 and the discrete tax benefit of $112 million in the second quarter of 2021 from net income and the effective tax rate for the year ended December 31, 2021. Total invested capital represents the net assets of the Company, other than cash and equivalents and outstanding debt which do not represent capital investment in the Company's operations. The most comparable GAAP measure to operating income after taxes is net income. Calculations of net income to average invested capital and After-tax ROIC are included in the press release furnished as Exhibit 99.1.

Item 9.01    Financial Statements and Exhibits

(d)Exhibits
Exhibit NumberExhibit Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ILLINOIS TOOL WORKS INC.
Dated:August 2, 2022
By: /s/ Michael M. Larsen
Michael M. Larsen
Senior Vice President & Chief Financial Officer



Exhibit 99.1

ITW Reports Second Quarter 2022 Results

•Total revenue of $4.0 billion; organic growth of 10%
•GAAP EPS of $2.37 included $(0.15) of EPS headwind from foreign currency translation impact and higher restructuring expenses
•Operating margin of 23.1% included 200 bps of operating leverage offset by (160) bps of price/cost impact and (100) bps of headwind from the MTS acquisition and higher restructuring expenses
•Maintaining full-year 2022 guidance including organic revenue growth of 7% to 10% and record GAAP EPS of $9.00 to $9.40 per share

GLENVIEW, IL., August 2, 2022 - Illinois Tool Works Inc. (NYSE: ITW) today reported its second quarter 2022 results.

“In the current environment, our teams around the world continue to do an exceptional job of demonstrating the power and resilience of the ITW Business Model as evidenced by the more than 10 percent organic growth and 23 percent plus operating margin that they delivered in the second quarter,” said E. Scott Santi, Chairman and Chief Executive Officer. “Across the company we continue to leverage our 80/20 front-to-back driven operational capabilities to support our customers and execute our “Win the Recovery” strategy to accelerate profitable market penetration and organic growth across our portfolio. Looking ahead at the remainder of 2022, based on our first half results and current levels of demand, we are maintaining our current guidance for full-year 2022, including organic growth of 8.5 percent and record GAAP EPS of $9.20 at their respective mid-points. While the near-term environment has its challenges, we remain focused on delivering differentiated service to our customers, top-tier financial performance for our shareholders, and continued progress on our path to ITW’s full potential performance.”

Second Quarter 2022 Results
Second quarter revenue of $4.0 billion increased nine percent with organic revenue growth of 10 percent. The acquisition of MTS contributed three percent to revenue. Unfavorable foreign currency translation reduced revenue by four percent. Six of seven segments delivered positive organic growth in the quarter, led by Food Equipment up 25 percent, Welding up 22 percent, Construction Products up 15 percent, Polymers & Fluids up 10 percent, Automotive OEM up six percent, and Test & Measurement and Electronics up one percent due to a difficult year-over-year comparison. Specialty Products organic revenue was down less than two percent. On a geographic basis, organic growth was 14 percent in North America, 6 percent in Europe, and 3 percent in Asia Pacific.

GAAP EPS was $2.37 and included $(0.05) of higher restructuring expenses related to 80/20 front-to-back projects, $(0.10) of unfavorable foreign currency translation, and a $0.16 one-time tax benefit related to the routine resolution of a U.S. tax audit. As a reminder, GAAP EPS of $2.45 in the second quarter of 2021 included a $0.35 one-time tax benefit. Operating margin was 24.1 percent excluding margin dilution impacts of (50) basis points each from the MTS acquisition and higher restructuring expenses. Enterprise initiatives contributed 90 basis points. Price/cost margin dilution impact moderated in the second quarter to (160) basis points compared to (250) basis points in the first quarter of 2022. Operating cash flow was $501 million, and free cash flow was $420 million with a conversion rate of 57 percent. The reported tax rate for the second quarter was 18.3 percent and excluding the one-time tax benefit, the effective tax rate was 23.9 percent.

2022 Guidance
ITW is maintaining its full-year GAAP EPS guidance of $9.00 to $9.40 per share. Based on current levels of demand, the company is projecting full-year revenue growth in the range of six to nine percent, with organic growth of seven to ten percent. At current foreign exchange rates, currency translation is projected to reduce revenue by four percent and EPS by approximately $(0.35). The acquisition of MTS is expected to add three percent to revenue. Operating margin is forecasted to be in the range of 24 to 25 percent, with enterprise initiatives contributing approximately 100 basis points and price/cost margin dilution impact of (100) basis points. Price is projected to exceed input cost inflation on a dollar-for-dollar basis. The expected free cash flow conversion rate is unchanged at 85 to 95 percent of net income, and the company is on pace to repurchase $1.5 billion of its own shares. The projected effective tax rate is 22 to 23 percent.



Non-GAAP Measures
This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information.

Forward-looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the duration and potential effects of the COVID-19 pandemic and global supply chain challenges, related government actions and the company’s strategy in response thereto on the company’s business, expected impact of inflation including raw material inflation, enterprise initiatives, future financial and operating performance, free cash flow and free cash flow conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, diluted income per share, restructuring expenses and related benefits, expected dividend payments, expected repatriation of overseas cash, after-tax return on invested capital, effective tax rates, exchange rates, expected access to liquidity sources, expected capital allocation, expected timing and amount of share repurchases, end market economic and regulatory conditions, potential acquisitions and divestitures and related impact on financial results, including statements with respect to the impact of the 2021 acquisition of the MTS Test & Simulation business, and the company’s 2022 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those anticipated. Such factors include those contained in ITW's Form 10-K for 2021 and subsequent reports filed with the SEC.

About Illinois Tool Works
ITW (NYSE: ITW) is a Fortune 200 global multi-industrial manufacturing leader with revenues totaling $14.5 billion in 2021. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 45,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF INCOME (UNAUDITED)

Three Months EndedSix Months Ended
June 30,June 30,
In millions except per share amounts2022202120222021
Operating Revenue$4,011 $3,676 $7,950 $7,220 
Cost of revenue2,392 2,163 4,749 4,202 
Selling, administrative, and research and development expenses659 588 1,311 1,154 
Amortization and impairment of intangible assets34 32 69 66 
Operating Income926 893 1,821 1,798 
Interest expense(47)(52)(95)(104)
Other income (expense)24 22 38 34 
Income Before Taxes903 863 1,764 1,728 
Income Taxes165 88 364 282 
Net Income$738 $775 $1,400 $1,446 
Net Income Per Share:
Basic$2.37 $2.46 $4.49 $4.58 
Diluted$2.37 $2.45 $4.48 $4.56 
Cash Dividends Per Share:
Paid$1.22 $1.14 $2.44 $2.28 
Declared$1.22 $1.14 $2.44 $2.28 
Shares of Common Stock Outstanding During the Period:
Average310.6 315.6 311.5 316.1 
Average assuming dilution311.5 316.9 312.6 317.4 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)

In millionsJune 30, 2022December 31, 2021
Assets
Current Assets:
Cash and equivalents$879 $1,527 
Trade receivables3,109 2,840 
Inventories1,975 1,694 
Prepaid expenses and other current assets305 313 
Assets held for sale103 — 
Total current assets6,371 6,374 
Net plant and equipment1,736 1,809 
Goodwill4,870 4,965 
Intangible assets832 972 
Deferred income taxes498 552 
Other assets1,359 1,405 
 $15,666 $16,077 
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt$1,525 $778 
Accounts payable679 585 
Accrued expenses1,562 1,648 
Cash dividends payable378 382 
Income taxes payable120 77 
Liabilities held for sale30 — 
Total current liabilities4,294 3,470 
Noncurrent Liabilities:
Long-term debt6,115 6,909 
Deferred income taxes632 654 
Noncurrent income taxes payable274 365 
Other liabilities972 1,053 
Total noncurrent liabilities7,993 8,981 
Stockholders' Equity:
Common stock6 6 
Additional paid-in-capital1,464 1,432 
Retained earnings24,967 24,325 
Common stock held in treasury(21,382)(20,636)
Accumulated other comprehensive income (loss)(1,677)(1,502)
Noncontrolling interest1 1 
Total stockholders' equity3,379 3,626 
 $15,666 $16,077 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Three Months Ended June 30, 2022
Dollars in millionsTotal RevenueOperating IncomeOperating Margin
Automotive OEM$711 $101 14.3 %
Food Equipment614 152 24.7 %
Test & Measurement and Electronics696 157 22.5 %
Welding486 142 29.3 %
Polymers & Fluids496 125 25.1 %
Construction Products565 156 27.6 %
Specialty Products447 121 26.9 %
Intersegment(4)— — %
Total Segments4,011 954 23.8 %
Unallocated— (28)— %
Total Company$4,011 $926 23.1 %

Six Months Ended June 30, 2022
Dollars in millionsTotal RevenueOperating IncomeOperating Margin
Automotive OEM$1,471 $239 16.3 %
Food Equipment1,180 278 23.6 %
Test & Measurement and Electronics1,381 306 22.2 %
Welding936 281 30.0 %
Polymers & Fluids977 243 24.8 %
Construction Products1,116 292 26.2 %
Specialty Products899 241 26.8 %
Intersegment(10)— — %
Total Segments7,950 1,880 23.6 %
Unallocated— (59)— %
Total Company$7,950 $1,821 22.9 %


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Q2 2022 vs. Q2 2021 Favorable/(Unfavorable)
Operating RevenueAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Organic6.1 %25.0 %0.9 %22.1 %10.2 %15.1 %(1.7)%10.4 %
Acquisitions/Divestitures— %— %17.8 %— %— %— %— %2.9 %
Translation(5.5)%(5.4)%(3.8)%(1.3)%(3.5)%(6.0)%(3.3)%(4.2)%
Operating
Revenue		0.6 %19.6 %14.9 %20.8 %6.7 %9.1 %(5.0)%9.1 %

Q2 2022 vs. Q2 2021 Favorable/(Unfavorable)
Change in Operating MarginAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Operating Leverage 120 bps  480 bps  20 bps  290 bps  170 bps  220 bps  (20) bps  200 bps
Changes in Variable Margin & OH Costs (300) bps  (200) bps  (260) bps  (220) bps  (400) bps  (220) bps — (220) bps
Total Organic (180) bps  280 bps  (240) bps  70 bps  (230) bps — (20) bps  (20) bps
Acquisitions/
Divestitures		—— (330) bps ———— (50) bps
Restructuring/Other (270) bps  (10) bps  10 bps  10 bps  10 bps — (10) bps  (50) bps
Total Operating Margin Change (450) bps  270 bps  (560) bps  80 bps  (220) bps — (30) bps  (120) bps
Total Operating Margin % *14.3%24.7%22.5%29.3%25.1%27.6%26.9%23.1%
*Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets 40 bps  50 bps  200 bps  10 bps  210 bps  20 bps  60 bps 90 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.08) on GAAP earnings per share for the second quarter of 2022.



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

1H 2022 vs. 1H 2021 Favorable/(Unfavorable)
Operating RevenueAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Organic2.5 %26.5 %4.3 %17.5 %11.5 %18.1 %(0.6)%10.5 %
Acquisitions/
Divestitures		— %— %17.9 %— %— %— %— %2.9 %
Translation(3.8)%(4.2)%(3.0)%(1.0)%(3.0)%(5.0)%(2.5)%(3.3)%
Operating
Revenue		(1.3)%22.3 %19.2 %16.5 %8.5 %13.1 %(3.1)%10.1 %

1H 2022 vs. 1H 2021 Favorable/(Unfavorable)
Change in Operating MarginAutomotive OEMFood EquipmentTest & Measurement and ElectronicsWeldingPolymers & FluidsConstruction ProductsSpecialty ProductsTotal ITW
Operating Leverage 40 bps  520 bps  100 bps  230 bps  200 bps  260 bps  (10) bps  200 bps
Changes in Variable Margin & OH Costs (390) bps  (310) bps  (340) bps  (170) bps  (380) bps  (410) bps  (60) bps  (300) bps
Total Organic (350) bps  210 bps  (240) bps  60 bps  (180) bps  (150) bps  (70) bps  (100) bps
Acquisitions/Divestitures—— (370) bps ———— (60) bps
Restructuring/Other (180) bps  (10) bps  10 bps —— 10 bps  10 bps  (40) bps
Total Operating Margin Change (530) bps  200 bps  (600) bps  60 bps  (180) bps  (140) bps  (60) bps  (200) bps
Total Operating Margin % *16.3%23.6%22.2%30.0%24.8%26.2%26.8%22.9%
*Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets 30 bps  50 bps  200 bps  10 bps  220 bps  10 bps  60 bps  90 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.17) on GAAP earnings per share for the first half of 2022.





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

Three Months EndedSix Months Ended
June 30,June 30,
Dollars in millions2022202120222021
Numerator:
Net Income$738 $775 $1,400 $1,446 
Discrete tax benefit related to the second quarter 2022(51)— (51)— 
Discrete tax benefit related to the second quarter 2021— (112)— (112)
Interest expense, net of tax (1)
36 41 73 81 
Other (income) expense, net of tax (1)
(18)(17)(29)(26)
Operating income after taxes$705 $687 $1,393 $1,389 
Denominator:
Invested capital: 
Cash and equivalents$879 $2,058 $879 $2,058 
Trade receivables3,109 2,786 3,109 2,786 
Inventories1,975 1,400 1,975 1,400 
Net assets held for sale73 — 73 — 
Net plant and equipment1,736 1,767 1,736 1,767 
Goodwill and intangible assets5,702 5,374 5,702 5,374 
Accounts payable and accrued expenses(2,241)(1,933)(2,241)(1,933)
Debt(7,640)(7,648)(7,640)(7,648)
Other, net(214)(283)(214)(283)
Total net assets (stockholders' equity)3,379 3,521 3,379 3,521 
Cash and equivalents(879)(2,058)(879)(2,058)
Debt7,640 7,648 7,640 7,648 
Total invested capital$10,140 $9,111 $10,140 $9,111 
Average invested capital (2)
$10,143 $8,926 $10,024 $8,864 
Net income to average invested capital (3)
29.1 %34.8 %27.9 %32.6 %
After-tax return on average invested capital (3)
27.8 %30.8 %27.8 %31.3 %

(1) Effective tax rate used for interest expense and other (income) expense for the three months ended June 30, 2022 and 2021 was 23.9% and 23.0%, respectively. Effective tax rate used for interest expense and other (income) expense for the six months ended June 30, 2022 and 2021 was 23.5% and 22.7%, respectively.

(2) Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within each of the periods presented.

(3) Returns for the three months ended June 30, 2022 and 2021 were converted to an annual rate by multiplying the calculated return by 4. Returns for the six months ended June 30, 2022 and 2021 were converted to an annual rate by multiplying the calculated return by 2.



A reconciliation of the tax rate for the three and six months ended June 30, 2022, excluding the second quarter 2022 discrete tax benefit of $51 million related to the resolution of a U.S. tax audit, is as follows:

Three Months EndedSix Months Ended
June 30, 2022June 30, 2022
Dollars in millionsIncome TaxesTax RateIncome TaxesTax Rate
As reported$165 18.3 %$364 20.7 %
Discrete tax benefit related to the second quarter 202251 5.6 %51 2.8 %
As adjusted$216 23.9 %$415 23.5 %

A reconciliation of the tax rate for the three and six months ended June 30, 2021, excluding the second quarter 2021 discrete tax benefit of $112 million related to a change in the U.K. income tax rate, is as follows:

Three Months EndedSix Months Ended
June 30, 2021June 30, 2021
Dollars in millionsIncome TaxesTax RateIncome TaxesTax Rate
As reported$88 10.1 %$282 16.3 %
Discrete tax benefit related to the second quarter 2021112 12.9 %112 6.4 %
As adjusted$200 23.0 %$394 22.7 %




AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

Twelve Months Ended
Dollars in millionsDecember 31, 2021
Numerator:
Net income$2,694 
Discrete tax benefit related to the third quarter 2021(21)
Discrete tax benefit related to the second quarter 2021(112)
Interest expense, net of tax (1)
157 
Other (income) expense, net of tax (1)
(40)
Operating income after taxes$2,678 
Denominator:
Invested capital:
Cash and equivalents$1,527 
Trade receivables2,840 
Inventories1,694 
Net plant and equipment1,809 
Goodwill and intangible assets5,937 
Accounts payable and accrued expenses(2,233)
Debt(7,687)
Other, net(261)
Total net assets (stockholders' equity)3,626 
Cash and equivalents(1,527)
Debt7,687 
Total invested capital$9,786 
Average invested capital (2)
$9,087 
Net income to average invested capital29.6 %
After-tax return on average invested capital29.5 %

(1)    Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2021 was 23.0%.

(2)    Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within the period presented.

A reconciliation of the 2021 effective tax rate excluding the third quarter 2021 discrete tax benefit of $21 million related to the utilization of capital losses and the second quarter 2021 discrete tax benefit of $112 million related to a change in the U.K. income tax rate, is as follows:

Twelve Months Ended
December 31, 2021
Dollars in millionsIncome TaxesTax Rate
As reported$632 19.0 %
Discrete tax benefit related to the third quarter 202121 0.6 %
Discrete tax benefit related to the second quarter 2021112 3.4 %
As adjusted$765 23.0 %


FREE CASH FLOW (UNAUDITED)

Three Months EndedSix Months Ended
June 30,June 30,
Dollars in millions2022202120222021
Net cash provided by operating activities$501 $555 $824 $1,164 
Less: Additions to plant and equipment(81)(78)(155)(146)
Free cash flow$420 $477 $669 $1,018 
Net Income$738 $775 $1,400 $1,446 
Net cash provided by operating activities to net income conversion rate68 %72 %59 %80 %
Free cash flow to net income conversion rate57 %62 %48 %70 %