“Overall, we don't expect the tax dispute to have a bearing on our ability to deliver on our capital allocation agenda and drive long-term business growth.”

In context

“ate, we continue to expect our underlying effective tax rate to be 19.5% for 2023. All in, we are reiterating comparable earnings per share growth of 4% to 5% versus $2.48 in 2022. We expect to generate approximately $9.5 billion of free cash flow in 2023 through approximately $11.4 billion in cash from operations, less approximately $1.9 billion in capital investments. I would like to remind you that included in cash from operations are 2 discrete items related to, one, transition tax payments, which will take place in the second quarter; and two, payments associated with M&A transactions. Excluding these, our implied free cash flow conversion would be within our long-term guidance. This guidance does not include any payments related to our ongoing U.S. income tax dispute with the IRS. Overall, we don't expect the tax dispute to have a bearing on our ability to deliver on our capital allocation agenda and drive long-term business growth. There are some considerations to keep in mind as it pertains to our guidance. We expect price/mix to moderate through the year as we cycle our pricing initiatives from the prior year. The discrete gross margin benefits related to the phasing of inventory costs and cycling the timing of M&A integration expenses this quarter are unlikely to repeat. Given the ongoing backdrop of rising interest rates, we expect to see higher net interest expense given our effective exposure to floating rate debt. And finally, due to our reporting calendar, there will be one additional day in the fourth quarter. With a quarter of good results to start the year and our focus on driving top line-led growth in any macroeconomic environment, we are well positioned to compound quality value by delivering on 2023”