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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 30, 2025
_________________________

ILLINOIS TOOL WORKS INC.
(Exact name of registrant as specified in its charter)
Delaware 1-4797 36-1258310
(State or other jurisdiction of incorporation) (Commission File No.) (I.R.S. Employer Identification No.)
155 Harlem Avenue Glenview IL 60025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 847-724-7500

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock ITW New York Stock Exchange
0.625% Euro Notes due 2027 ITW27 New York Stock Exchange
3.250% Euro Notes due 2028 ITW28 New York Stock Exchange
2.125% Euro Notes due 2030 ITW30 New York Stock Exchange
1.00% Euro Notes due 2031 ITW31 New York Stock Exchange
3.375% Euro Notes due 2032 ITW32 New York Stock Exchange
3.00% Euro Notes due 2034 ITW34 New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02    Results of Operations and Financial Condition

On July 30, 2025, Illinois Tool Works Inc. (the "Company") announced its 2025 second quarter results of operations in the press release furnished as Exhibit 99.1.

Non-GAAP Financial Measures

The Company uses free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. The Company believes this non-GAAP financial measure, along with free cash flow to net income conversion rate, are useful to investors in evaluating the Company’s financial performance and measures the Company's ability to generate cash internally to fund Company initiatives. Free cash flow represents net cash provided by operating activities less additions to plant and equipment. Free cash flow is a measurement that is not the same as net cash flow from operating activities per the statement of cash flows and may not be consistent with similarly titled measures used by other companies. A reconciliation of free cash flow to net cash provided by operating activities is included in the press release furnished as Exhibit 99.1.

The Company uses after-tax return on average invested capital ("After-tax ROIC") to measure the effectiveness of its operations' use of invested capital to generate profits. After-tax ROIC is not defined under U.S. generally accepted accounting principles ("GAAP"). After-tax ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company's ability to generate returns from cash invested in its operations and may be different than the method used by other companies to calculate After-tax ROIC. The Company defines After-tax ROIC as operating income after taxes divided by average invested capital, which is annualized when presented in interim periods. Operating income after taxes is a non-GAAP measure consisting of net income before interest expense and other income (expense), on an after-tax basis, which are excluded as they do not represent returns generated by the Company's operations. For comparability, the Company also excluded the discrete tax benefit of $21 million in the first quarter of 2025 from net income and the effective tax rate for the six months ended June 30, 2025. Additionally, for comparability, the Company also excluded the net discrete tax benefit of $121 million in the third quarter of 2024 from net income and the effective tax rate for the twelve months ended December 31, 2024. Total invested capital represents the net assets of the Company, other than cash and equivalents and outstanding debt which do not represent capital investment in the Company's operations. The most comparable GAAP measure to operating income after taxes is net income. Calculations of net income to average invested capital and After-tax ROIC are included in the press release furnished as Exhibit 99.1.

The Company presented diluted net income per share for the twelve months ended December 31, 2024 excluding the cumulative effect of a change in inventory accounting method and the impact of the sale of the Company's noncontrolling interest in Wilsonart International Holdings LLC. The Company believes these non-GAAP measures enhance investors' understanding of the Company's underlying financial performance and improves comparability with other periods. A reconciliation of this non-GAAP measure to diluted net income per share is included in the press release furnished as Exhibit 99.1.


Item 9.01    Financial Statements and Exhibits
(d) Exhibits
Exhibit Number Exhibit Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ILLINOIS TOOL WORKS INC.
Dated: July 30, 2025
By: /s/ Michael M. Larsen
Michael M. Larsen
Senior Vice President & Chief Financial Officer


EX-99.1 2 a20250630-2q25ex991pressre.htm EX-99.1 Document

Exhibit 99.1

ITW Reports Second Quarter 2025 Results

•Revenue of $4.1 billion, an increase of 1% with flat organic growth
•Operating margin of 26.3% as enterprise initiatives contributed 130 bps
•GAAP EPS of $2.58, a new Q2 record
•Raising full year 2025 GAAP EPS guidance by $0.10; narrowing the range to $10.35 to $10.55 per share

GLENVIEW, IL., July 30, 2025 - Illinois Tool Works Inc. (NYSE: ITW) today reported its second quarter 2025 results and updated guidance for full year 2025.

“The ITW team outpaced underlying end market growth and delivered solid financial performance in the second quarter, achieving EPS of $2.58, operating income of $1.1 billion, and operating margin of 26.3 percent, all second-quarter records. Our results are a direct outcome of the strength of the ITW Business Model, the quality of our diversified and resilient portfolio, and the unwavering dedication of our global ITW colleagues to serving our customers and executing our strategy with excellence,” said Christopher A. O’Herlihy, President and Chief Executive Officer.

“I am very encouraged by the meaningful strategic progress we made in the first half of the year, diligently executing our Next Phase growth priorities to make consistent above-market organic growth powered by Customer-Back Innovation a defining ITW strength. Looking ahead, we are raising our full year guidance, confident in our ability to successfully navigate an uncertain environment and deliver differentiated performance through 2025 and beyond.”

Second Quarter 2025 Results
Second quarter revenue of $4.1 billion increased by one percent as organic growth was essentially flat. Foreign currency translation impact increased revenue by one percent.

GAAP EPS of $2.58 increased two percent. Operating margin expanded 10 basis points to 26.3 percent as enterprise initiatives contributed 130 basis points. Operating cash flow was $550 million, and free cash flow was $449 million with a conversion of 59 percent to net income. During the quarter, the company repurchased $375 million of its own shares, and the effective tax rate was 24.4 percent.

2025 Guidance
ITW is raising its full year GAAP EPS guidance range of $10.15 to $10.55 per share by $0.10 or one percent at the midpoint to a narrower range of $10.35 to $10.55 per share. The company is projecting revenue growth of one to three percent and organic growth of flat to two percent based on current levels of demand adjusted for on-going pricing actions that are projected to offset tariff cost impacts and current foreign exchange rates. Operating margin is projected to be in the range of 26 to 27 percent as enterprise initiatives are expected to contribute 100 basis points or more. Free cash flow is expected to exceed 100 percent of net income, and the company plans to repurchase approximately $1.5 billion of its own shares. The projected effective tax rate is approximately 24 percent.

Non-GAAP Measures
This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.

Forward-looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the potential impact of tariffs, the Company’s projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted earnings per share, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, and the Company’s 2025 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated.


Important risks that could cause actual results to differ materially from the Company’s expectations include those that are detailed in ITW’s Form 10-K for 2024 and subsequent reports filed with the SEC.

About Illinois Tool Works
ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $15.9 billion in 2024. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 44,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF INCOME (UNAUDITED)

Three Months Ended Six Months Ended
June 30, June 30,
In millions except per share amounts 2025 2024 2025 2024
Operating Revenue $ 4,053  $ 4,027  $ 7,892  $ 8,000 
Cost of revenue 2,271  2,262  4,432  4,407 
Selling, administrative, and research and development expenses 693  686  1,399  1,362 
Amortization and impairment of intangible assets 21  25  42  50 
Operating Income 1,068  1,054  2,019  2,181 
Interest expense (74) (75) (142) (146)
Other income (expense) 4  26  16  42 
Income Before Taxes 998  1,005  1,893  2,077 
Income Taxes 243  246  438  499 
Net Income $ 755  $ 759  $ 1,455  $ 1,578 
Net Income Per Share:
Basic
 $ 2.58  $ 2.55  $ 4.97  $ 5.29 
Diluted
 $ 2.58  $ 2.54  $ 4.95  $ 5.27 
Cash Dividends Per Share:
Paid
 $ 1.50  $ 1.40  $ 3.00  $ 2.80 
Declared
 $ 1.50  $ 1.40  $ 3.00  $ 2.80 
Shares of Common Stock Outstanding During the Period:
Average
 292.3  297.6  292.9  298.3 
Average assuming dilution
 292.9  298.5  293.7  299.3 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)

In millions June 30, 2025 December 31, 2024
Assets    
Current Assets:    
Cash and equivalents $ 788  $ 948 
Trade receivables 3,320  2,991 
Inventories 1,710  1,605 
Prepaid expenses and other current assets 416  312 
Total current assets 6,234  5,856 
Net plant and equipment 2,177  2,036 
Goodwill 5,038  4,839 
Intangible assets 558  592 
Deferred income taxes 564  369 
Other assets 1,477  1,375 
  $ 16,048  $ 15,067 
Liabilities and Stockholders' Equity    
Current Liabilities:    
Short-term debt $ 1,242  $ 1,555 
Accounts payable 613  519 
Accrued expenses 1,544  1,576 
Cash dividends payable 437  441 
Income taxes payable 96  217 
Total current liabilities 3,932  4,308 
Noncurrent Liabilities:    
Long-term debt 7,695  6,308 
Deferred income taxes 144  119 
Other liabilities 1,066  1,015 
Total noncurrent liabilities 8,905  7,442 
Stockholders' Equity:    
Common stock 6  6 
Additional paid-in-capital 1,725  1,669 
Retained earnings 29,471  28,893 
Common stock held in treasury (26,124) (25,375)
Accumulated other comprehensive income (loss) (1,868) (1,877)
Noncontrolling interest 1  1 
Total stockholders' equity 3,211  3,317 
$ 16,048  $ 15,067 



ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Three Months Ended June 30, 2025
Dollars in millions Total Revenue Operating Income Operating Margin
Automotive OEM $ 845  $ 180  21.3  %
Food Equipment 680  189  27.7  %
Test & Measurement and Electronics 686  157  22.8  %
Welding 479  159  33.1  %
Polymers & Fluids 438  121  27.7  %
Construction Products 473  145  30.8  %
Specialty Products 455  148  32.6  %
Intersegment (3) —  —  %
Total Segments 4,053  1,099  27.1  %
Unallocated —  (31) —  %
Total Company $ 4,053  $ 1,068  26.3  %
Six Months Ended June 30, 2025
Dollars in millions Total Revenue Operating Income Operating Margin
Automotive OEM $ 1,631  $ 331  20.3  %
Food Equipment 1,307  355  27.1  %
Test & Measurement and Electronics 1,338  296  22.1  %
Welding 951  312  32.8  %
Polymers & Fluids 867  235  27.1  %
Construction Products 916  275  30.0  %
Specialty Products 890  283  31.8  %
Intersegment (8) —  —  %
Total Segments 7,892  2,087  26.4  %
Unallocated —  (68) —  %
Total Company $ 7,892  $ 2,019  25.6  %


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

Q2 2025 vs. Q2 2024 Favorable/(Unfavorable)
Operating Revenue Automotive OEM Food Equipment Test & Measurement and Electronics Welding Polymers & Fluids Construction Products Specialty Products Total ITW
Organic 2.4  % 0.8  % (0.7) % 2.8  % (3.7) % (6.9) % 0.3  % (0.4) %
Acquisitions/
Divestitures		 —  % —  % —  % —  % —  % —  % —  % —  %
Translation 1.4  % 1.3  % 1.9  % 0.1  % 0.3  % 0.8  % 0.8  % 1.1  %
Operating Revenue 3.8  % 2.1  % 1.2  % 2.9  % (3.4) % (6.1) % 1.1  % 0.7  %
Q2 2025 vs. Q2 2024 Favorable/(Unfavorable)
Change in Operating Margin Automotive OEM Food Equipment Test & Measurement and Electronics Welding Polymers & Fluids Construction Products Specialty Products Total ITW
Operating Leverage 40 bps 10 bps (20) bps 40 bps (80) bps (150) bps — (10) bps
Changes in Variable Margin & OH Costs 110 bps 40 bps (50) bps (30) bps 30 bps 160 bps 40 bps (10) bps
Total Organic 150 bps 50 bps (70) bps 10 bps (50) bps 10 bps 40 bps (20) bps
Acquisitions/
Divestitures		 — — — — — — — —
Restructuring/Other  40 bps  10 bps —  10 bps —  130 bps  30 bps  30 bps
Total Operating Margin Change 190 bps 60 bps (70) bps 20 bps (50) bps 140 bps 70 bps 10 bps
Total Operating Margin % * 21.3% 27.7% 22.8% 33.1% 27.7% 30.8% 32.6% 26.3%
* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets  20 bps  30 bps  130 bps  10 bps  150 bps  10 bps  10 bps  60 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.05) on GAAP earnings per share for the second quarter of 2025.




ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)

H1 2025 vs. H1 2024 Favorable/(Unfavorable)
Operating Revenue Automotive OEM Food Equipment Test & Measurement and Electronics Welding Polymers & Fluids Construction Products Specialty Products Total ITW
Organic 0.6  % 1.0  % (3.1) % 1.4  % (1.1) % (7.2) % 0.6  % (1.0) %
Acquisitions/
Divestitures		 —  % —  % 0.1  % —  % —  % —  % —  % —  %
Translation (0.5) % (0.3) % 0.4  % (0.4) % (1.0) % (0.4) % (0.5) % (0.3) %
Operating Revenue 0.1  % 0.7  % (2.6) % 1.0  % (2.1) % (7.6) % 0.1  % (1.3) %
H1 2025 vs. H1 2024 Favorable/(Unfavorable)
Change in Operating Margin Automotive OEM Food Equipment Test & Measurement and Electronics Welding Polymers & Fluids Construction Products Specialty Products Total ITW
Operating Leverage 10 bps 20 bps (80) bps 20 bps (20) bps (150) bps 10 bps (20) bps
Changes in Variable Margin & OH Costs 80 bps 30 bps (10) bps (40) bps 30 bps 150 bps 90 bps (150) bps
Total Organic 90 bps 50 bps (90) bps (20) bps 10 bps — 100 bps (170) bps
Acquisitions/
Divestitures		 — — (20) bps — — — — —
Restructuring/Other  (20) bps  10 bps  (20) bps  20 bps —  60 bps — —
Total Operating Margin Change 70 bps 60 bps (130) bps — 10 bps 60 bps 100 bps (170) bps
Total Operating Margin % * 20.3% 27.1% 22.1% 32.8% 27.1% 30.0% 31.8% 25.6%
* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets  30 bps  30 bps  140 bps  10 bps  150 bps  10 bps  20 bps  50 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.11) on GAAP earnings per share for the first half of 2025.


ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
Dollars in millions 2025 2024 2025 2024
Numerator:
Net Income $ 755  $ 759  $ 1,455  $ 1,578 
Discrete tax benefit related to the first quarter 2025 —  —  (21) — 
Interest expense, net of tax (1)
 56  57  108  111 
Other (income) expense, net of tax (1)
 (3) (20) (12) (32)
Operating income after taxes $ 808  $ 796  $ 1,530  $ 1,657 
Denominator:
Invested capital:
Cash and equivalents $ 788  $ 862  $ 788  $ 862 
Trade receivables 3,320  3,250  3,320  3,250 
Inventories 1,710  1,819  1,710  1,819 
Net plant and equipment 2,177  2,011  2,177  2,011 
Goodwill and intangible assets 5,596  5,551  5,596  5,551 
Accounts payable and accrued expenses (2,157) (2,191) (2,157) (2,191)
Debt (8,937) (8,473) (8,937) (8,473)
Other, net 714  133  714  133 
Total net assets (stockholders' equity) 3,211  2,962  3,211  2,962 
Cash and equivalents (788) (862) (788) (862)
Debt 8,937  8,473  8,937  8,473 
Total invested capital $ 11,360  $ 10,573  $ 11,360  $ 10,573 
Average invested capital (2)
 $ 10,996  $ 10,480  $ 10,741  $ 10,357 
Net income to average invested capital (3)
 27.4  % 29.0  % 27.1  % 30.5  %
After-tax return on average invested capital (3)
 29.4  % 30.4  % 28.5  % 32.0  %

(1)    Effective tax rate used for interest expense and other (income) expense for the three months ended June 30, 2025 and 2024 was 24.4% in both periods. Effective tax rate used for interest expense and other (income) expense for the six months ended June 30, 2025 and 2024 was 24.2% and 24.0%, respectively.

(2)    Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within each of the periods presented.

(3)    Returns for the three months ended June 30, 2025 and 2024 were converted to an annual rate by multiplying the calculated return by 4. Returns for the six months ended June 30, 2025 and 2024 were converted to an annual rate by multiplying the calculated return by 2.

After-tax ROIC for the six months ended June 30, 2024 included 170 basis points of favorable impact related to the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses ($117 million pre-tax, or $88 million after-tax) in the first quarter of 2024.








A reconciliation of the tax rate for the six month period ended June 30, 2025, excluding the first quarter 2025 discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards, is as follows:

Six Months Ended
June 30, 2025
Dollars in millions Income Taxes Tax Rate
As reported $ 438  23.1  %
Discrete tax benefit related to the first quarter 2025 21  1.1  %
As adjusted $ 459  24.2  %


AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

Twelve Months Ended
Dollars in millions December 31, 2024
Numerator:
Net income $ 3,488 
Net discrete tax benefit related to the third quarter 2024 (121)
Interest expense, net of tax (1)
 215 
Other (income) expense, net of tax (1)
 (336)
Operating income after taxes $ 3,246 
Denominator:
Invested capital:
Cash and equivalents $ 948 
Trade receivables 2,991 
Inventories 1,605 
Net plant and equipment 2,036 
Goodwill and intangible assets 5,431 
Accounts payable and accrued expenses (2,095)
Debt (7,863)
Other, net 264 
Total net assets (stockholders' equity) 3,317 
Cash and equivalents (948)
Debt 7,863 
Total invested capital $ 10,232 
Average invested capital (2)
 $ 10,419 
Net income to average invested capital 33.5  %
After-tax return on average invested capital 31.2  %

(1)    Effective tax rate used for interest expense and other (income) expense for the year ended December 31, 2024 was 23.8%.

(2)    Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within the period presented.



A reconciliation of the 2024 effective tax rate excluding the third quarter 2024 net discrete tax benefit of $121 million, which included favorable discrete tax benefits of $107 million related to the utilization of capital loss carryforwards upon the sale of Wilsonart and $87 million related to a reorganization of the Company's intellectual property, partially offset by a $73 million discrete tax expense related to the remeasurement of unrecognized tax benefits associated with various intercompany transactions, is as follows:
Twelve Months Ended
December 31, 2024
Dollars in millions Income Taxes Tax Rate
As reported $ 934  21.1  %
Net discrete tax benefit related to the third quarter 2024 121  2.7  %
As adjusted $ 1,055  23.8  %


FREE CASH FLOW (UNAUDITED)

Three Months Ended Six Months Ended
June 30, June 30,
Dollars in millions 2025 2024 2025 2024
Net cash provided by operating activities $ 550  $ 687  $ 1,142  $ 1,276 
Less: Additions to plant and equipment (101) (116) (197) (211)
Free cash flow $ 449  $ 571  $ 945  $ 1,065 
Net income $ 755  $ 759  $ 1,455  $ 1,578 
Net cash provided by operating activities to net income conversion rate 73  % 91  % 78  % 81  %
Free cash flow to net income conversion rate 59  % 75  % 65  % 67  %


ADJUSTED NET INCOME PER SHARE - DILUTED (UNAUDITED)

Twelve Months Ended
December 31, 2024
As reported $ 11.71 
Cumulative effect of change in inventory accounting method, net of tax (1)
 (0.30)
Impact of sale of noncontrolling interest in Wilsonart (2)
 (1.26)
As adjusted $ 10.15 

(1)    Represents the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses in the first quarter of 2024 ($117 million pre-tax, or $88 million after-tax).

(2)    Includes the $363 million pre-tax gain on the sale of noncontrolling interest in Wilsonart and related taxes in the third quarter of 2024.