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Investor Presentation Investor Presentation September 3, 2026 Q3 Fiscal 2026
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Investor Presentation • September 3, 2026 • 2 Note on Forward-looking Statements and Non-GAAP Financial Measures This presentation contains forward-looking statements, which are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current assumptions and expectations of future events and often can be identified by words such as "achieve," "believe," "boost," "continue," "drive," "estimate," "expect," "future," "goal," "growth," "guidance," "improve," "may," "opportunity," "predict," "remain," "should," "target" and "would," variations of such words or the negative thereof, and similar expressions or future dates. Forward-looking statements in this presentation include our financial guidance, expectations regarding demand trends, our ability to manage challenges related to tariffs, timing of operating cash flow generation, and AMP. Forward-looking statements involve risks and uncertainties that could cause actual events and results to differ materially from those projected or implied. Such risks and uncertainties include: adverse worldwide economic conditions; the effect of abnormal weather patterns; customer, government and municipal revenue, budget spending levels and cash conservation efforts; loss of any substantial customer; inventory adjustments or changes in purchasing patterns by customers; fluctuations in the cost and availability of commodities, components, parts, and accessories; disruption at or in proximity to our facilities or certain third parties; the effect of recent acquisitions; impacts of our AMP initiative and any future restructuring activities or productivity or cost savings initiatives; geopolitical factors and government policies and actions with respect to global trade, tariffs, U.S. trade policy and trade agreements; and other risks and uncertainties described in our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q or current reports on Form 8-K, and other filings with the Securities and Exchange Commission. The risks described are not exhaustive. Forward-looking statements speak only as of the date of this presentation. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances occurring or existing after the date of this presentation. Actual results may differ materially from those expressed or implied in these forward-looking statements. This presentation also contains non-GAAP financial measures and more information about our use of such non-GAAP financial measures, as well as a reconciliation of the most directly comparable historical U.S. GAAP financial measures to the corresponding historical non-GAAP financial measures, which can be found in our related financial filings in the section titled “Non-GAAP Financial Measures.” Non-GAAP measures should be considered in addition to, not as a substitute for, GAAP results. All financial results contained within this presentation are based on most recent fiscal quarter and fiscal year-end figures.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 3Quarterly Update Appendix Quarterly Highlights: Q3 F26 Delivered third-quarter sales and earnings growth that beat expectations, primarily due to strong mowing season demand Deliberate actions to drive efficiency drove productivity improvements Returned $110 million to shareholders via dividends and share repurchases during the quarter
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 4Quarterly Update Appendix Current GuidancePrevious Guidance Up 6.3% to 6.6%Up 4% to 6.5%Net Sales Growth (%) Up 7.5% to 7.8%Up 5% to 7%Professional Segment Net Sales Growth (%) Up 1.5% to 1.8%FlatResidential Segment Net Sales Growth (%) HigherHigherAdjusted Gross Margin* (%) HigherHigherAdjusted Operating Earnings Margin* (%) 19.2% to 19.4%19.0% to 19.5%Professional Segment Earnings Margin (%) 7.4% to 7.7%7.0% to 8.5%Residential Segment Earnings Margin (%) $4.60 to $4.65$4.50 to $4.62Adjusted Diluted EPS* ($) ~$90M$90M to $100MCapital Expenditures ($) $130M to $135M$130M to $140MDepreciation & Amortization ($) ~$56M~$60MInterest Expense ($) ~22%~21.5%Adjusted Effective Tax Rate* (%) At least 120%At least 120%Free Cash Flow (FCF) Conversion* (%) Higher than F25Higher than F25Share Repurchases Raising Full-Year Guidance (All on a year-over-year basis unless noted) *Non-GAAP Measures: refer to the Appendix of this presentation for additional information
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 5Quarterly Update Appendix Up 3.9% to 5.1%Net Sales Growth (%) Up 4.8% to 5.9%Professional Segment Net Sales Growth (%) FlatResidential Segment Net Sales Growth (%) HigherAdjusted Operating Earnings Margin* (%) LowerProfessional Segment Earnings Margin (%) 7.5% to 7.9%Residential Segment Earnings Margin (%) ~22%Adjusted Effective Tax Rate* (%) $0.93 to $0.98Adjusted Diluted EPS* Growth (%) Q4 F26 Guidance (All on a year-over-year basis unless noted) *Non-GAAP Measures: refer to the Appendix of this presentation for additional information
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 6Quarterly Update Appendix Tariff Impact F26 Tariffs Mitigated Dollar for Dollar • U.S. Based Manufacturer • Primarily U.S. Supply Base • USMCA Qualification • Minimal China Exposure Competitive Advantages Mitigating Actions • Manufacturing & Portfolio Optimization • Strategic Sourcing Adjustments • Price Increases Estimated F26 Gross Tariff Headwinds of ~$120 Million* *Includes approximately $25 million impact of pre-existing tariffs already in place prior to F25. Tariff Costs by Year ($, millions) $25 $65 $120 F24* F25* F26* F26 Guidance assumes Tariff Refunds of ~$15M (down from ~$20M) $105M Net of Refunds
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 7Quarterly Update Appendix The Toro Company Golf, Sports Fields & Grounds: Specialized/precision equipment, large-area turf maintenance, smart irrigation systems, lighting Landscape Contractors: Turf maintenance, snow and ice management, irrigation, lighting, AI-powered software Homeowners: Turf maintenance for homeowners with urban, suburban & large acreage properties, battery-powered equipment, snow removal, irrigation Underground Construction: Infrastructure construction, trenchless rehab & replacement, locating & guiding Specialty Construction: Versatile equipment for contractors, rental equipment, electric indoor construction Agriculture: Micro irrigation systems, irrigation automation PURPOSE To help our customers enrich the beauty, productivity and sustainability of the land. VISION To be the most trusted leader in solutions for the outdoor environment. Every day. Everywhere. MISSION To deliver superior innovation and to deliver superior customer care. Built on Strong Relationships and Our Legacy of Excellence Industries We Serve
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 8Quarterly Update Appendix Innovative Solutions & Brand Portfolio • Over 110 years of innovation and deep customer relationships in 125+ countries. • Wide range of innovative solutions for professional and residential markets. • Innovations in gas, battery, electric, hybrid, smart-connected, and autonomous solutions. #1 or #2 in Our Key Markets Robust balance sheet enables continued investments Brand Leadership
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 9Quarterly Update Appendix We have a proven track record of executing on targets and are well positioned to create meaningful stockholder value over the next five years. InvestmentThesis Attractive end markets and customer-driven innovation. Deep expertise, leading market share, and best-in-class distribution & service networks create high barriers to entry. Steady replacement cycles drive future organic growth. Consistent financial performance and cash flow generation. Strategic investments and disciplined capital allocation. Expanded portfolio and reach in fast-growing industries, providing significant runway for future growth.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 10Quarterly Update Appendix +7.8% NET SALES CAGR* +10.7% ADJUSTED EPS CAGR*,** +22.8% AVERAGE ROIC*,** Our Enterprise Strategic Priorities *Calculation and statements refer to TTC results from F15 to F25; CAGR = Compound Annual Growth Rate **Non-GAAP Measures: refer to the Appendix of this presentation for additional information and reconciliation DRIVING PRODUCTIVITY AND OPERATIONAL EXCELLENCE EMPOWERING PEOPLE ACCELERATING PROFITABLE GROWTH A Foundation of Consistent Financial Results
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 11Quarterly Update Appendix F25 Financial Highlights • Continued strength in the professional segment, driven by underground construction and golf • Professional segment net sales of $3,624M, up 1.9% from $3,557M in F24 • Professional segment earnings margin of 19.4% up from 18.0% in F24 Professional Strength • Record *free cash flow of $578M, up from $471M in F24 • *Free cash flow conversion of 146%, up from 112% • Dividends per share increased 6% year-over-year • Share repurchases of $290M, up from $246M in F24 • Total of $441M returned to stockholders in F25 • ROIC* of 17.0%, up from 16.6% in F24 * Non-GAAP Measures: refer to the Appendix of this presentation for additional information and reconciliation Free Cash Flow Capital Allocation Return on Invested Capital
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 12Quarterly Update Appendix Program-to-Date F26 Goal $125M+ Annualized Savings Implemented $125M Productivity Initiative F26 Goal Increased $100M Original Goal Supply Base Design-to-Value Route-to-Market Operational Efficiency Focus Areas for Transformation
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 13Quarterly Update Appendix Near-Term Performance Expectations 3% to 5%Annual Net Sales Growth (%) 13% to 15%Adjusted Operating Earnings Margin (%) 8% to 10%Annual Adjusted Diluted EPS Growth (%) Over 100%Free Cash Flow (FCF) Conversion (%) Weather Conditions Seasonality Consumer Confidence Interest Rates Macro Conditions Infrastructure Spend Housing Market External Considerations Balanced portfolio reduces reliance on weather conditions.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 14Quarterly Update Appendix F25 Net Sales $4.51B 70% 30% 81% 19% F15 Net Sales $2.39B 36% 4% 24%6% 30% 29% 26% 22% 4% 19% Balanced portfolio reduces reliance on weather conditions. Operating Margins & Professional Growth Professional work runs nearly twice the operating margin of residential - a clear reason our focus remains on the professional market. Underground & Specialty Construction Golf Agricultural Micro Irrigation Landscape & Grounds Residential Professional Based on 10-year average F15 – F25 Residential 10% Professional 18.5% Balanced & Complementary Portfolio By Segment By End Market
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 15Quarterly Update Appendix F25 Net Sales 90% 10% 81% 19% U.S. Outside U.S. Equipment Irrigation By Geographic Market By Product Type Approximately half the landscape & grounds end market is sold to homeowners. Including the Residential segment,~ 33% of our products are sold to homeowners. Underground & Specialty Construction Golf Agricultural Micro Irrigation Landscape & Grounds Residential F25 Net Sales by End Market29% 26% 22% 19% Global Customer Base By Customer
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 16Quarterly Update Appendix Major Components of Cost of Sales Enhanced supply chain transparency Diversifying sourcing strategies and supplier relationships Strengthening compliance and trade programs Enhancing site/plant flexibility Advancing vertical integration strategy and priorities Leveraging total plant network resources and capabilities Continuity plans Sourcing Actions F25 Cost of Sales Steel Electrical Components Plastic & Rubber Labor, Depreciation and Other Materials Drive/Power Systems
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 17Quarterly Update Appendix Global Infrastructure Investment Infrastructure Investments & Strategic Expansion A leader in vacuum excavation trucks designed to safely excavate around critical infrastructure using a combination of high-pressure water or air, and a powerful vacuum system to minimize the risk of utility damage. • Complements specialized underground portfolio • Expands market reach • Positions us to capitalize on global infrastructure spending • Trusted partnership since 2022 Strategic Fit Tornado Infrastructure Equipment Significant growth in transportation, communication, broadband, electric grid, water quality, and data centers driving multi-year opportunities. Unprecedented government funding worldwide creating opportunity for robust long-term growth. We have the most comprehensive underground and specialty construction equipment and brand line up in the industry. Uniquely Positioned Recent Strategic Acquisition
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 18Quarterly Update Appendix Golf Global Market Momentum Golf continues its strong global rise, with 2025 setting the record for the most U.S. rounds played in a single year. International momentum is equally impressive, marked by a 44% increase in on-course golfers outside North America since 2016. We Are Competitively Positioned to Win #1 global market share leader Multi-year irrigation projects secured through 2028 and beyond 100+ Years of deep relationships & industry-leading innovation 23.8 23.8 24.2 24.3 24.8 25.1 25.6 26.6 28.1 29.1 8.2 8.3 9.3 9.9 12.1 12.4 15.5 17.8 19.1 19.0 32.0 32.1 33.5 34.2 36.9 37.5 41.1 45.0 47.2 48.1 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 U.S. Golf Participants, in Millions (Ages 6+) Total Off-Course only On-Course © National Golf Foundation 2026 Source(s): Physical Activity Council (PAC) activity survey and NGF’s Participation and Engagement Survey (PES) Off-course golf includes golf entertainment venues (Topgolf, Drive Shack, etc.), standalone driving ranges, and/or the thousands of businesses that now have simulators and screen golf setups. 549M Rounds Played Up 1% over 2024 4.0M Youth Golfers Up 9% over 2024 29.1M On-Course Participation Up 4% over 2024 2.2M Private Club Members Up 55% since 2019 U.S. Golf Participation At-a-Glance © National Golf Foundation Golf Industry 2025 - Key U.S. Statistics
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 19Quarterly Update Appendix Professional Segment Overview 70% OF TOTAL COMPANY NET SALES $1.64B NET SALES 18.8% SEGMENT EARNINGS MARGIN F15 81% OF TOTAL COMPANY NET SALES $3.62B NET SALES 19.4% SEGMENT EARNINGS MARGIN F25 79% 21% 2025 Geographic Net Sales Profile U.S. Outside U.S.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 20Quarterly Update Appendix Continuous Pipeline of New Product Introductions Investing in strategic technology to fuel customer-valued innovations Help customers increase productivity Address labor challenges Achieve sustainability goals
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 21Quarterly Update Appendix F15 F25 ResidentialSegment Overview 30% OF TOTAL COMPANY NET SALES $0.73B NET SALES 11.7% SEGMENT EARNINGS MARGIN 19% OF TOTAL COMPANY NET SALES $0.86B NET SALES 4.2% SEGMENT EARNINGS MARGIN 86% 14% 2025 Geographic Net Sales Profile U.S. Outside U.S.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 22Quarterly Update Appendix Residential Segment Strengths America’s #1 Walk Mower and Snow Blower Brand Powerful Brand Recognition Market Share Leader Strong Brands 8,000+ Mass Retailer Partnership Locations 4,000+ Independent Dealers Globally Expansive Channel Battery Power Professional Features Robotics Innovative Solutions
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 23Quarterly Update Appendix Well-Positioned for Future Growth With a Full Suite of Offerings for Homeowners Residential Products Designed for Urban, Suburban and Large Acreage Homeowners Zero Emission Solutions: 75+ Tools for Homeowners Fully Interchangeable Flex Force Battery System Zero Turn Mowers with Pro DNA Extensive Quality OEM Parts
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 24Quarterly Update Appendix SynergiesAcross Professional & Residential Segments Research & Development Complementary Product Categories Cross-segment innovation drives sales, profitability & brand reputation Driving market share gains, supply chain & operational efficiency and margin expansion Builds trust across segments, drives regular replacement cycles and creates consistent demand for parts. Brand Recognition and Loyalty Demand drivers across Professional and Residential segments coupled with leveraged R&D investments enables a long runway of profitable growth and attractive margins Extensive distribution and support channels solve customer problems and address unmet needs. Customer First + ++ • Typical turf equipment cycle is ~3 to 5 years for contractors • Typical lease duration for golf equipment is ~3 to 4 years • Typical residential equipment replacement is ~7 to 10 years Regular equipment replacement cycles drive predictable sales
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 25Quarterly Update Appendix 2021 autonomous technology accelerating acquisitions All of our solutions are engineered, field tested and refined to ensure the highest standards of performance, reliability and safety We don't just make products, we solve problems InnovationAcross the Portfolio • Zero exhaust emissions • Quiet operation • Easier maintenance • Addressing regulations Alternative Power & Electrification • Addressing labor shortages • Improving consistency Autonomous Solutions • Driving productivity • Loyal relationships • Data/Customer insights • Subscription services Smart Connected Products
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 26Quarterly Update Appendix $74 $77 $80 $84 $109 $124 $141 $156 $174 $173 $162 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 F15 F16 F17 F18 F19 F20 F21 F22 F23 F24 F25 LeadershipThrough Innovation *Bars reflect R&D expense in USD millions; Line reflects R&D expense as a percentage of net sales **Percentage of net sales from new products introduced over the prior three years Resonating with customers as evidenced by strong Vitality Index** Vitality Index** F15 F16 F17 F18 F19 F20 F21 F22 F23 F24 F25 35% Organic growth driven by prioritized R&D spend R&D Investment and % of Net Sales*
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 27Quarterly Update Appendix Our internal AI and large language models automate manual work, help predict outcomes, and boost productivity. AI-Driven Productivity & Innovation TTC’s AI TerrAIn strategy responsibly integrates AI into our process. Product development & testing Quality improvement & warranty automation Customer research, analysis & insights Trend identification Accelerating team productivity & decision making Employee productivity & efficiency
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 28Quarterly Update Appendix Product SustainabilityInitiatives Focus Areas • Design & innovation • Raw material extraction • Manufacturing • Distribution • Product use • End of life • Energy & emissions • Water • Supply chain •W a s t e • Sustainable buildings 2.16 1.78 1.24 1.35 0.90 F21 F22 F23 F24 F25 TRIR Actuals Goal 1.10 0.92 0.56 0.44 0.40 0.25 F21 F22 F23 F24 F25 LWDR Actuals Goal .37 18% Total Recordable Injury Rate 32% Lost Working Days Rate Reduced Total Recordable Injury Rate by over 50% Surpassing our F25 Sustainability People Goal People • Safety • Health & wellness • Acquisition & retention • Inclusion and belonging • Giving and community Process
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 29Quarterly Update Appendix $470.7 $578.3 F24 F25 112.4% 145.6% F24 F25 Strong Balance Sheet and Resilient Free Cash Flow Free Cash Flow Conversion* (Twelve months ended) Leverage Ratio* (Trailing Twelve Months) Target Range: 1.0x-2.0x Cash flow generation continues to be a source of strength, with free cash flow reaching a record high in F25. Free cash flow conversion on track for third consecutive year above 110% in F26. 1.3x Q3 F26 In millions Free Cash Flow* (Twelve months ended)
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 30Quarterly Update Appendix Capital expenditures supporting investments in new innovations and new technology that drive organic growth Strategic approach to acquisitions with disciplined process and proven track record Established dividend with increases commensurate with earnings growth Share repurchases to return value to stockholders and offset dilution over time Invested $51.1M to fund new product investments, advanced manufacturing technologies, and capacity for growth within existing manufacturing footprint Acquired Tornado in the attractive soft excavation space Returned $112.8M to stockholders via regular dividends, representing a per share payout increase of 3% year-over-year Returned $358.1M to stockholders via share repurchases Consistent Priorities F26 YTD Actions Capital Allocation Strategy Balanced approach to capital allocation has resulted in strategic investments driving significant growth and the return of more than $1.3B to stockholders from F21 to F25.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 31Quarterly Update Appendix Notable Acquisitions F97 Ditch Witch established The Toro Company as “The Underground Authority” F19 A leading brand in professional contractor snow and ice management F14 Versatile machines and attachments that offer maximum performance in complex landscapes F20 F26 Growing hydrovac industry complements Ditch Witch underground construction portfolio Market share leader in the landscape contractor industry
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AppendixAppendix June 4, 2026 Q2 Fiscal 2026
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 33Quarterly Update Appendix Our Portfolioof Brands
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 34Quarterly Update Appendix .Although the Toro Company has a global footprint, over 90% of our manufacturing hours are attributable to North America operations. Manufacturing Locations 34
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 35Quarterly Update Appendix Majority of US independent dealers and distributors take advantage of inventory floor plan financing programs to fund their purchases, as is customary in our industry TTC’s accounts receivable balance consists of sales to mass channel partners, irrigation customers, and many of our international dealers and distributors Red Iron offers financing for the majority of our domestic dealers and distributors of lawn care, snow and ice management, and golf and grounds solutions, as well as Toro-branded specialty construction products Third-party institutions also provide financing for a small portion of US dealers and distributors, some international channel partners, and the majority of our Ditch Witch underground construction distribution partners TTC’s 45% non-controlling ownership stake in the Red Iron JV allows us to recoup a portion of our floor planning costs, and in accordance with GAAP the JV income is reported within “other income” in our income statement AccountsReceivable & Floor Plan Financing
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 36Quarterly Update Appendix Historical Net Sales F25F24F23F22F21F20F19F18F17F16F15($ millions) $4,510.4$4,583.8$4,553.2$4,514.7$3,959.6$3,378.8$3,138.1$2,618.7$2,505.2$2,392.2$2,390.9Net Sales
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 37Quarterly Update Appendix Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as information supplemental and in addition to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. The non-GAAP financial measures included within this presentation, as applicable, consist of operating earnings, earnings before income taxes, the effective tax rate, and net earnings per diluted share, each as adjusted, as well as free cash flow, free cash flow conversion percentage, return on average invested capital, and leverage ratio. Management believes that the presentation of these non-GAAP measures provides useful information to investors and that these measures may assist investors in evaluating our core operational performance and liquidity. This Appendix includes a reconciliation of the historical non-GAAP financial measures used in the presentation to the most directly historical comparable GAAP financial measures. Reconciliations of forward-looking non-GAAP guidance to projected U.S. GAAP guidance is not provided because it would require an unreasonable effort to do so. Non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for, our financial measures prepared in accordance with U.S. GAAP. Investors should note that any non-GAAP financial measure we use may not be the same non-GAAP financial measure, and may not be calculated in the same manner, as that of other companies.
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 38Quarterly Update Appendix Adjusted Operating Earnings F25F24F23F22F21F20F19F18F17F16F15($ millions) $409.9$533.3$430.7$575.7$518.3$426.4$325.0$373.1$355.1$333.4$299.1Operating Earnings --$0.4$4.0-$6.2$62.4----Acquisition-related costs $48.1$27.2---$0.8$16.3----Management actions/ productivity initiative (AMP) $81.1-$156.3-($11.3)------Other* $539.1$560.5$587.4$579.7$507.0$433.4$403.7$373.1$355.1$333.4$299.1Adjusted Operating Earnings * Includes: Litigation settlement in F21; Restructuring Charges in F23; Non-cash impairment charges in F23 and F25
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 39Quarterly Update Appendix Adjusted Effective Tax Rate F25F24F23F22F21F20F19F18F17F16F15 16.3%18.3%17.7%19.8%18.0%19.0%14.9%27.0%24.2%30.1%30.7%Effective Tax Rate ------(0.3%)----Acquisition-related costs -(0.2%)----0.1%----Management actions/ productivity initiative (AMP) 0.1%0.7%1.2%0.4%1.6%1.9%4.3%3.9%5.6%--Tax impact of stock-based compensation 1.4%-1.5%---0.3%(8.8%)---Other* 17.8%18.8%20.4%20.2%19.6%20.9%19.3%22.1%29.8%30.1%30.7%Adjusted Effective Tax Rate * Includes: Impacts of U.S. Tax reform in F18 and F19; Non-cash impairment charges in F23 and F25
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 40Quarterly Update Appendix Adjusted EPS F25F24F23F22F21F20F19F18F17F16F15 $3.17$4.01$3.13$4.20$3.78$3.03$2.53$2.50$2.41$2.06$1.78GAAP EPS ---$0.03-$0.05$0.47----Acquisition-related costs $0.42$0.19$0.04--$0.01$0.13----Management actions/ productivity initiative (AMP) -($0.03)($0.05)($0.03)($0.08)($0.07)($0.12)($0.13)($0.18)--Tax impact of stock-based compensation $0.61-$1.09-($0.08)-($0.01)$0.30---Other* $4.20$4.17$4.21$4.20$3.62$3.02$3.00$2.67$2.23$2.06$1.78Adjusted EPS Adjusted for stock splits * Includes: Impacts of U.S. Tax reform in F18 and F19; Litigation settlement in F21; Non-cash impairment charges in F23 and F25
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 41Quarterly Update Appendix Free Cash Flow Generation F25F24F23F22F21F20F19F18F17F16F15($ millions) $662.0$569.9$306.8$297.2$555.5$539.4$337.4$364.8$360.7$384.3$249.6Operating Cash Flow ($83.7)($99.2)($142.4)($143.5)($104.0)($78.1)($92.9)($90.1)($58.3)($50.7)($56.4)Capital Expenditures1 $578.3$470.7$164.4$153.7$451.5$461.3$244.5$274.7$302.5$333.6$193.2FCF $397.2$418.9$329.7$443.3$409.9$329.7$274.0$271.9$267.7$231.0$201.6Net Earnings1 146%112%50%35%110%140%89%101%113%144%96%FCF Conversion* * - FCF Conversion = Free Cash Flow/Net Earnings 1 - Refer to SEC 10-K filing from each respective year for further detail about the figure used in this calculation
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 42Quarterly Update Appendix Return on Average Invested Capital (%)* F25F24F23F22F21F20F19F18F17F16F15($ millions) $443.1$455.0$467.5$462.6$407.6$343.3$325.8$290.6$249.3$233.7$207.2Adj. Op. Earnings* (1-Adj. Tax Rate) $2,607.0$2,748.2$2,653.8$2,367.5$1,962.6$1,910.3$1,437.0$944.0$935.4$910.1$852.7Average Quarterly Capital Utilized 17.0%16.6%17.6%19.5%20.8%18.0%22.7%30.8%26.7%25.7%24.3%ROIC ROIC Adjusted Operating Earnings*(1-Adjusted Effective Tax Rate) Avg. Quarterly Capital Utilized =
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Overview Portfolio Demand Drivers Segment Overview Competitive Advantage Financial Position 43Quarterly Update Appendix Leverage Ratio– Trailing Twelve Months Trailing Twelve MonthsQ3 F26Q2 F26Q1 F26Q4 F25($ millions) $962.0$962.0$1,016.8$1,071.7$921.5Gross Debt $462.2$106.9$183.4$86.9$85.0Earnings Before Income Taxes $5.5($0.2)$3.5$2.2-Acquisition-Related Costs $91.8$56.6$11.5$3.4$20.3Productivity Initiative $559.5$163.3$198.4$92.5$105.3Adjusted Earnings Before Income Taxes $56.0$13.8$14.8$14.2$13.2Interest Expense $145.5$28.4$36.8$33.2$47.1Depreciation and Amortization $761.0$205.5$250.0$139.9$165.6Adjusted EBITDA 1.3x Leverage Ratio