Non-GAAP Reconciliations

Reconciliation of Reported (GAAP)
to Adjusted (non-GAAP) Financial Measures
(Dollar amounts in millions, except per share data)
2017 2016 2015 2014 2013 2012
Non-GAAP Adjustments, Continuing Operations            
Gain from sale of real estate $(23) $ - $ - $ - $ - $ -
Pension settlement charge 15 - 12 - - -
Impairment charges 5 4 6 - 67 -
Gain/loss from sale of businesses 3 (27) - - - -
Benefit from litigation settlement proceeds - (7) - - - -
Litigation accrual - - 6 54 - -
Acquisition-related bargain purchase gain - - - - (9) -
Non-GAAP adjustments, pre-tax - (30) 23 54 58 -
Income tax impact - 12 (9) (21) (21) -
Special tax items 42 - - - - (27)
Non-GAAP adjustments, after tax $42 $(18) $15 $33 $37 $(27)
Diluted shares outstanding 137.3 140.0 142.9 143.2 147.2 146.0
EPS impact of non-GAAP adjustments $0.32 $(0.13) $0.09 $0.23 $0.25 $(0.18)
Adjusted EBIT, Margin, and EPS            
EBIT (earnings before interest and taxes) $468 $522 $487 $332 $275 $324
Non-GAAP adjustments, pre-tax - (30) 23 54 58 -
Adjusted EBIT $468 $492 $510 $386 $333 $324
Net sales from continuing operations $3,944 $3,750 $3,917 $3,782 $3,477 $3,415
EBIT margin 11.9% 13.9% 12.4% 8.8% 7.9% 9.5%
Adjusted EBIT margin 11.9% 13.1% 13.0% 10.2% 9.6% 9.5%
Diluted EPS from continuing operations $2.14 $2.62 $2.27 $1.55 $1.25 $1.57
EPS impact of non-GAAP adjustments 0.32 (0.13) 0.09 0.23 0.25 (0.18)
Adjusted EPS from continuing operations $2.46 $2.49 $2.36 $1.78 $1.50 $1.39
Dividend Payout Ratio            
Diluted EPS from continuing operations $2.14 $2.62 $2.27 $1.55 $1.25 $1.57
EPS impact of non-GAAP adjustments 0.32 (0.13) 0.09 0.23 0.25 (0.18)
Adjusted EPS from continuing operations $2.46 $2.49 $2.36 $1.78 $1.50 $1.39
Annual dividend per share $1.42 $1.34 $1.26 $1.22 $1.18 $1.14
Dividend payout % of diluted EPS from cont. ops. 66% 51% 56% 79% 94% 73%
Dividend payout % of adjusted EPS from cont. ops. 58% 54% 53% 69% 79% 82%
Return on Equity            
Net earnings from continuing operations $294 $367 $328 $225 $186 $231
Non-GAAP adjustments, after tax 42 (18) 15 33 37 (27)
Adjusted net earnings $336 $349 $343 $258 $223 $204
Average shareholders equity $1,142 $1,096 $1,126 $1,277 $1,421 $1,375
Return on average equity 25.7% 33.5% 29.1% 17.6% 13.1% 16.8%
Adjusted return on average equity 29.4% 31.8% 30.4% 20.2% 15.7% 14.8%
Net Debt to Net Capital            
Current maturities of long-term debt $154 $4 $3 $202 $181 $202
Long-term debt 1,098 956 942 762 685 850
Total debt 1,252 960 945 964 866 1,052
Cash and cash equivalents (526) (282) (253) (333) (273) (359)
Net debt $726 $678 $692 $631 $593 $693
Long-term debt $1,098 $956 $942 $762 $685 $850
Deferred income taxes 83 54 38 42 63 70
Other long-term liabilities 203 173 185 185 128 158
Equity 1,191 1,094 1,098 1,155 1,399 1,442
Total capital 2,575 2,277 2,263 2,144 2,275 2,520
Current maturities of long-term debt 154 4 3 202 181 202
Cash and cash equivalents (526) (282) (253) (333) (273) (359)
Net capital $2,203 $1,999 $2,013 $2,013 $2,183 $2,363
Long-term debt to total capital 42.6% 42.0% 41.6% 35.5% 30.1% 33.7%
Net debt to net capital 33.0% 33.9% 34.4% 31.3% 27.2% 29.3%