2020 Annual Report

Non-GAAP Reconciliations

Reconciliation of Reported (GAAP)
to Adjusted (non-GAAP) Financial Measures1
(Dollar amounts in millions, except per share data)
2020 2019 2018 2017 2016 2015
Non-GAAP adjustments, Continuing Operations
Goodwill impairment
$25
$-
$-
$1
$4
$4
Restructuring-related charges 9 15 16 - - -
Note impairment 8 - 16 - - -
Stock write-off for prior year divestiture 4 - - - - -
ECS transaction costs - 1 7 - - -
Gain from sale of real estate - - - (23) - -
Pension settlement charge - - - 15 - 12
Impairment charges - - - 4 - 2
Gain/loss from sale of businesses - - - 3 (27) -
Benefit from litigation settlement proceeds - - - - (7) -
Litigation accrual - - - - - 6
Non-GAAP adjustments, pre-tax 46 16 39 - (30) 23
Income tax impact (5) (2) (7) - 12 (9)
Special tax items - - (2) 42 - -
Non-GAAP adjustments, after tax
$41
$14
$30
$42
$(18)
$15
Diluted shares outstanding 135.9 135.4 135.2 137.3 140.0 142.9
EPS impact of non-GAAP adjustments
$0.31
$0.10
$0.22
$0.32
$(0.13)
$0.09
Adjusted EBIT, EBITDA, Margin, and EPS
Trade sales from continuing operations
$4,280
$4,753
$4,270
$3,944
$3,750
$3,917
EBIT (earnings before interest and taxes)
$401
$513
$437
$468
$522
$487
Non-GAAP adjustments, pre-tax and excluding interest2 46 16 36 - (30) 23
Adjusted EBIT
$446
$529
$473
$468
$492
$510
EBIT margin 9.4% 10.8% 10.2% 11.9% 13.9% 12.4%
Adjusted EBIT margin 10.4% 11.1% 11.9% 11.1% 13.1% 13.0%
EBIT
$401
$513
$437
$468
$522
$487
Depreciation 119 118 104 95 87 84
Amortization 70 74 32 31 29 30
EBITDA 590 705 573 594 637 600
Non-GAAP adjustments, pre-tax and excluding interest2 46 16 36 - (30) 23
Adjusted EBITDA
$636
$721
$609
$594
$607
$623
EBITDA margin 13.8% 14.8% 13.4% 15.1% 17.0% 15.3%
Adjusted EBITDA margin 14.9% 15.2% 14.3% 15.1% 16.2% 15.9%
Diluted EPS from continuing operations
$1.82
$2.47
$2.26
$2.14
$2.62
$2.27
EPS impact of non-GAAP adjustments 0.31 0.10 0.22 0.32 (0.13) 0.09
Adjusted EPS from continuing operations
$2.13
$2.57
$2.48
$2.46
$2.49
$2.36
Dividend Payout Ratio
Diluted EPS from continuing operations
$1.82
$2.47
$2.26
$2.14
$2.62
$2.27
EPS impact of non-GAAP adjustments 0.31 0.10 0.22 0.32 (0.13) 0.09
Adjusted EPS from continuing operations
$2.13
$2.57
$2.48
$2.46
$2.49
$2.36
Annual dividend per share
$1.60
$1.58
$1.50
$1.42
$1.34
$1.26
Dividend payout % of diluted EPS from cont. ops. 88% 64% 66% 66% 51% 56%
Dividend payout % of adjusted EPS from cont. ops. 75% 61% 60% 58% 54% 53%
Net Debt to Adjusted EBITDA
Current maturities of long-term debt
$51
$51
$1
$154
$4
$3
Long-term debt 1,849 2,067 1,168 1,098 956 942
Total debt
$1,900
$2,118
$1,169
$1,252
$960
$945
Less: cash and cash equivalents (349) (248) (268) (526) (282) (253)
Net debt
$1,551
$1,870
$901
$726
$678
$692
Adjusted EBITDA
$636
$721
$609
$594
$607
$623
Net debt to adjusted EBITDA 2.4x 2.6x 1.5x 1.2x 1.1x 1.1x
Return on Invested Capital
EBIT
$401
$513
$437
$468
$522
$487
Non-GAAP adjustments, pre-tax and excluding interest2 46 16 36 - (30) 23
Adjusted EBIT
$446
$529
$473
$468
$492
$510
 Less: taxes 95 (117) (98) (104) (117) (141)
NOPAT (net operating profit after tax)
$352
$412
$375
$364
$375
$369
Total debt
$1,900
$2,118
$1,169
$1,252
$960
$945
Operating lease liabilities3 165 161 - - - -
Equity 1,390 1,313 1,158 1,191 1,094 1,098
Less: cash and cash equivalents (349) (248) (268) (526) (282) (253)
Invested capital
$3,106
$3,343
$2,059
$1,917
$1,772
$1,790
Average invested capital
$3,225
$2,701
$1,988
$1,844
$1,781
$1,788
ROIC (Return on invested capital) 10.9% 15.3% 18.9% 19.7% 21.1% 20.6%
  • 1 Calculations impacted by rounding.
  • 2 2018 excludes $3 million of financing-related charges for the ECS acquisition included in interest expense.
  • 3 New lease accounting rules adopted January 1, 2019. Prior year data is not available.