Non-GAAP Reconciliations

Reconciliation of Reported (GAAP)
to Adjusted (non-GAAP) Financial Measures
(Dollar amounts in millions, except per share data)
2016 2015 2014 2013 2012 2011
Non-GAAP adjustments, Continuing Operations            
Gain from sale of businesses $(27) $ - $ - $ - $ - $ -
Benefit from litigation settlement proceeds (7) - - - - -
Impairment charges 4 6 - 67 - -
Pension lump-sum buyout charge - 12 - - - -
Litigation accrual - 6 54 - - -
Acquisition-related bargain purchase gain - - - (9) - -
Restructuring-related charges - - - - - 15
Non-GAAP adjustments, pre-tax (30) 23 54 58 - 15
Income tax impact 12 (9) (21) (21) - (5)
Unusual tax items - - - - (27) -
Non-GAAP adjustments, after tax $(18) $15 $33 $37 $(27) $10
Diluted shares outstanding 140.0 142.9 143.2 147.2 146.0 147.0
EPS impact of non-GAAP adjustments $(0.13) $0.09 $0.23 $0.25 $(0.18) $0.07
Adjusted EBIT, Margin, and EPS            
EBIT (earnings before interest and taxes) $522 $487 $332 $275 $324 $266
Non-GAAP adjustments, pre-tax (30) 23 54 58 - 15
Adjusted EBIT $492 $510 $386 $333 $324 $281
Net sales from continuing operations $3,750 $3,917 $3,782 $3,477 $3,415 $3,303
EBIT margin 13.9% 12.4% 8.8% 7.9% 9.5% 8.1%
Adjusted EBIT margin 13.1% 13.0% 10.2% 9.6% 9.5% 8.5%
Diluted EPS from continuing operations $2.62 $2.27 $1.55 $1.25 $1.57 $1.15
EPS impact of non-GAAP adjustments (0.13) 0.09 0.23 0.25 (0.18) 0.07
Adjusted EPS from continuing operations $2.49 $2.36 $1.78 $1.50 $1.39 $1.22
Dividend Payout Ratio            
Diluted EPS from continuing operations $2.62 $2.27 $1.55 $1.25 $1.57 $1.15
EPS impact of non-GAAP adjustments (0.13) 0.09 0.23 0.25 (0.18) 0.07
Adjusted EPS from continuing operations $2.49 $2.36 $1.78 $1.50 $1.39 $1.22
Annual dividend per share $1.34 $1.26 $1.22 $1.18 $1.14 $1.10
Dividend payout % of diluted EPS from cont. ops. 51% 56% 79% 94% 73% 96%
Dividend payout % of adjusted EPS from cont. ops. 54% 53% 69% 79% 82% 90%
Return on Equity            
Net earnings from continuing operations $367 $328 $225 $186 $231 $173
Non-GAAP adjustments, after tax (18) 15 33 37 (27) 10
Adjusted net earnings $349 $343 $258 $223 $204 $183
Average shareholders equity $1,096 $1,126 $1,277 $1,421 $1,375 $1,416
Return on average equity 33.5% 29.1% 17.6% 13.1% 16.8% 12.2%
Adjusted return on average equity 31.8% 30.4% 20.2% 15.7% 14.8% 12.9%
Net Debt to Net Capital            
Current maturities of long-term debt $4 $3 $202 $181 $202 $3
Long-term debt 956 942 762 685 850 831
Total debt 960 945 964 866 1,052 834
Cash and cash equivalents (282) (253) (333) (273) (359) (236)
Net Debt $678 $692 $631 $593 $693 $598
Long-term debt $956 $942 $762 $685 $850 $831
Deferred income taxes 54 38 42 63 70 58
Other long-term liabilities 173 185 185 128 158 130
Equity 1,094 1,098 1,155 1,399 1,442 1,308
Total capital 2,277 2,263 2,144 2,275 2,520 2,327
Current maturities of long-term debt 4 3 202 181 202 3
Cash and cash equivalents (282) (253) (333) (273) (359) (236)
Net capital $1,999 $2,013 $2,013 $2,183 $2,363 $2,094
Long-term debt to total capital 42.0% 41.6% 35.5% 30.1% 33.7% 35.7%
Net debt to net capital 33.9% 34.4% 31.3% 27.2% 29.3% 28.6%