ILLINOIS TOOL WORKS INC
For the period ended Sep 30, 2025. Filed Oct 24, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 24, 2025
ITW$280.95-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0000049826-25-000037
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-24.
0000049826-25-000057
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 203 previous paragraphs and 203 current paragraphs.
114 unchanged; 74 reworded; 15 added; 13 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
•Operating margin was 27.4% in the third quarter. The increase of 90 basis points was primarily due to benefits from the Company's enterprise initiatives of 140 basis points, partially offset by higher employee-related expenses, including higher health and welfare expenses.
Current report
•Diluted earnings per share (EPS) of $2.81 for the third quarter of 2025 decreased 28.1%, or increased 6.0% excluding the favorable impact of $1.26 from the third quarter 2024 sale of the Company's noncontrolling interest in Wilsonart. In the year-to-date period, EPS of $7.77 decreased 15.3%, or increased 2.0% excluding the favorable effect of the first quarter 2024 LIFO accounting method change of $0.30 and the favorable impact of $1.25 from the third quarter 2024 Wilsonart transaction. Additionally, the third quarter and year-to-date periods of 2025 included $0.09 from the third quarter discrete tax benefit previously discussed.
Current report
•Operating revenue increased in the third quarter and year-to-date periods due to higher organic revenue and the favorable effect of foreign currency translation.
Current report
•Operating margin was 21.8% in the third quarter. The increase of 240 basis points was primarily due to benefits from the Company's enterprise initiatives and favorable operating leverage of 90 basis points, partially offset by higher employee-related expenses, continued investment in the business and higher restructuring expenses of 20 basis points.
Current report
•Organic revenue increased 0.7% in the third quarter as equipment organic revenue decreased 0.5% and service organic revenue grew 2.7%. In the year-to-date period, organic revenue grew 0.9% as equipment organic revenue declined 0.2% and service organic revenue increased 2.8%.
Current report
The results of operations for the Test & Measurement and Electronics segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Current report
•Operating margin was 28.5% in the third quarter. The increase of 60 basis points was primarily due to benefits from the Company's enterprise initiatives, favorable price/cost of 50 basis points and product mix, partially offset by unfavorable operating leverage of 60 basis points and higher employee-related expenses.
Current report
•In the year-to-date period, operating margin of 27.6% increased 30 basis points primarily driven by benefits from the Company's enterprise initiatives and product mix, partially offset by higher employee-related expenses and unfavorable operating leverage of 30 basis points.
Current report
•In the year-to-date period, operating margin of 30.6% increased 100 basis points primarily driven by benefits from the Company's enterprise initiatives and lower restructuring expenses of 50 basis points, partially offset by unfavorable operating leverage of 110 basis points, unfavorable price/cost of 40 basis points and higher employee-related expenses.
Current report
•Operating revenue increased in the third quarter and year-to-date periods due to higher organic revenue and the favorable effect of foreign currency translation.
Current report
•Organic revenue increased 1.6% in the third quarter as equipment sales grew 14.2% and consumables decreased 1.8%. In the year-to-date period, organic revenue grew 0.9% as equipment sales increased 5.8% and consumables declined 0.5%. Product line simplification activities reduced organic revenue by 90 basis points in the third quarter and 110 basis points in the year-to-date period.
Current report
•Operating margin was 32.3% in the third quarter. The increase of 120 basis points was primarily due to benefits from the Company's enterprise initiatives, favorable price/cost of 40 basis points and favorable operating leverage of 20 basis points, partially offset by higher employee-related expenses and product mix.
Current report
•In the year-to-date period, operating margin of 32.0% increased 110 basis points primarily driven by benefits from the Company's enterprise initiatives, favorable price/cost of 30 basis points and favorable operating leverage of 20 basis points, partially offset by higher employee-related expenses and product mix.
Current report
•Other income (expense) was income of $12 million in the third quarter of 2025 versus $379 million in the prior year period, and $28 million in the year-to-date period of 2025 versus $421 million in the prior year period. On August 5, 2024, the Company entered into a purchase agreement with affiliates of CD&R for the sale of the Company's noncontrolling equity interest in Wilsonart. The transaction closed immediately after the execution of the purchase agreement. Proceeds from the transaction, net of transaction costs, were $395 million, resulting in a pre-tax gain of $363 million. Refer to Note 3. Sale of Noncontrolling Interest in Wilsonart International Holdings LLC in Item 1. Financial Statements for additional information regarding this transaction. Excluding the Wilsonart pre-tax gain, other income (expense) in the third quarter of 2025 decreased $4 million compared to the third quarter of 2024 and decreased $30 million in the year-to-date period primarily due to higher foreign currency transaction losses in 2025.
Current report
A reconciliation of the tax rate for the three and nine month periods ended September 30, 2024, 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:
Removed paragraphs (13)
Previous report
•Operating margin was 26.3% in the second quarter. The increase of 10 basis points was primarily due to benefits from the Company's enterprise initiatives of 130 basis points and lower restructuring expenses, partially offset by higher employee-related expenses, including higher health and welfare expenses.
Previous report
•Diluted earnings per share (EPS) of $2.58 for the second quarter of 2025 increased 1.6%. In the year-to-date period, EPS of $4.95 decreased 6.1%, or decreased 0.6% excluding the favorable effect of the first quarter 2024 LIFO accounting method change of $0.29.
Previous report
•Operating revenue increased in the second quarter due to higher organic revenue and the favorable effect of foreign currency translation. In the year-to-date period, operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation.
Previous report
•In the year-to-date period, operating margin of 20.3% increased 70 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable price/cost of 20 basis points, partially offset by higher employee-related expenses and continued investment in the business.
Previous report
•Organic revenue increased 0.8% in the second quarter as equipment organic revenue decreased 0.1% and service organic revenue grew 2.5%. In the year-to-date period, organic revenue grew 1.0% as equipment organic revenue declined 0.1% and service organic revenue increased 2.9%.
Previous report
The results of operations for the Test & Measurement and Electronics segment for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous report
•Operating margin was 33.1% in the second quarter. The increase of 20 basis points was primarily due to benefits from the Company's enterprise initiatives, favorable operating leverage of 40 basis points and favorable price/cost of 20 basis points, partially offset by higher employee-related expenses.
Previous report
•Operating margin was 27.7% in the second quarter. The decrease of 50 basis points was primarily due to unfavorable operating leverage of 80 basis points and higher employee-related expenses, partially offset by benefits from the Company's enterprise initiatives.
Previous report
•In the year-to-date period, operating margin of 27.1% increased 10 basis points primarily driven by benefits from the Company's enterprise initiatives, partially offset by higher employee-related expenses and unfavorable operating leverage of 20 basis points.
Previous report
•In the year-to-date period, operating margin of 30.0% increased 60 basis points primarily driven by benefits from the Company's enterprise initiatives and lower restructuring expenses of 60 basis points, partially offset by unfavorable operating leverage of 150 basis points, higher employee-related expenses and unfavorable price/cost of 30 basis points.
Previous report
•Organic revenue increased 0.3% in the second quarter as equipment sales grew 7.5% and consumables decreased 1.7%. In the year-to-date period, organic revenue grew 0.6% as equipment sales increased 2.0% and consumables grew 0.2%. Product line simplification activities reduced organic revenue by 120 basis points in both the second quarter and year-to-date periods.
Previous report
•In the year-to-date period, operating margin of 31.8% increased 100 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable price/cost of 30 basis points, partially offset by higher employee-related expenses and product mix.
Previous report
•Other income (expense) was income of $4 million in the second quarter of 2025 and $16 million in the year-to-date period, a decrease of $22 million compared to the second quarter of 2024 and a decrease of $26 million in the year-to-date period primarily due to foreign currency transaction losses in 2025 versus foreign currency transaction gains in 2024.
Reworded paragraphs (74)
Previous wording
During the first quarter of 2022, Russian military forces invaded Ukraine. In response, the United States and several other countries imposed economic and other sanctions on Russia. The Company has four immaterial Russian subsidiaries with total assets of approximately $37 million as of June 30, 2025. The revenue for these four subsidiaries for the three and six months ended June 30, 2025 was approximately $7 million and $12 million, respectively. These subsidiaries are not material to the Company’s results of operations or financial position.
Current wording
During the first quarter of 2022, Russian military forces invaded Ukraine. In response, the United States and several other countries imposed economic and other sanctions on Russia. The Company has four immaterial Russian subsidiaries with total assets of approximately $36 million as of September 30, 2025. The revenue for these four subsidiaries for the three and nine months ended September 30, 2025 was approximately $5 million and $17 million, respectively. These subsidiaries are not material to the Company’s results of operations or financial position.
Previous wording
On April 2, 2025, the United States government announced additional tariffs on goods imported to the U.S. from numerous countries. In response, certain countries retaliated with additional counter-tariffs or are working to negotiate with the U.S government regarding tariffs. Tariffs on goods from many countries were subsequently paused and are currently expected to be effective August 1, 2025. The Company believes it is well positioned to minimize the impact of these tariffs because its businesses generally manufacture products in the markets where they are sold and the Company expects to recover the increased cost of tariffs through price increases. However, current tariff policies have introduced additional uncertainty and may negatively impact overall demand from the Company's customers. The Company continues to assess the impact of the tariffs and actions that can be taken to moderate and/or minimize their effects on the Company.
Current wording
On April 2, 2025, the United States government announced additional tariffs on goods imported to the U.S. from numerous countries. In response, certain countries retaliated with additional counter-tariffs or are working to negotiate with the U.S government regarding tariffs. Tariffs on goods from many countries became effective on August 1, 2025. The Company believes it is well positioned to minimize the impact of these tariffs because its businesses generally manufacture products in the markets where they are sold and the Company expects to recover the increased cost of tariffs through price increases. However, current tariff policies have introduced additional uncertainty and may negatively impact overall demand from the Company's customers. The Company continues to assess the impact of the tariffs and actions that can be taken to moderate and/or minimize their effects on the Company.
Previous wording
In an uncertain external environment, the Company delivered solid financial results in the second quarter and year-to-date periods of 2025 primarily due to the continued successful execution of enterprise initiatives and continued focus on the highly differentiated ITW Business Model.
Current wording
In an uncertain external environment, the Company delivered solid financial results in the third quarter and year-to-date periods of 2025 primarily due to the continued successful execution of enterprise initiatives and continued focus on the highly differentiated ITW Business Model.
Previous wording
Refer to the "Results of Operations for Total Company" and the "Results of Operations by Segment" sections for discussion of changes in operating revenue for the second quarter and year-to-date periods of 2025 compared to 2024.
Current wording
Refer to the "Results of Operations for Total Company" and the "Results of Operations by Segment" sections for discussion of changes in operating revenue for the third quarter and year-to-date periods of 2025 compared to 2024.
Previous wording
Cost of revenue was $2.27 billion and $2.26 billion in the second quarter of 2025 and 2024, respectively, an increase of 0.4%, primarily due to higher revenue. Cost of revenue as a percent of operating revenue was lower in the second quarter of 2025 compared to 2024 primarily due to benefits from the Company's enterprise initiatives, partially offset by higher employee-related expenses. In the year-to-date period, Cost of revenue was $4.43 billion and $4.41 billion in 2025 and 2024, respectively, an increase of 0.6%. Excluding the first quarter 2024 LIFO accounting method change of $117 million, Cost of revenue decreased 2.0% in 2025 compared to 2024 primarily due to lower revenue and the effect of foreign currency translation. Cost of revenue, excluding the first quarter 2024 LIFO accounting method change, as a percent of operating revenue was lower in the year-to-date period of 2025 compared to 2024 primarily due to benefits from the Company's enterprise initiatives, partially offset by unfavorable operating leverage.
Current wording
Cost of revenue was $2.25 billion and $2.23 billion in the third quarter of 2025 and 2024, respectively, an increase of 1.0%, primarily due to higher revenue. Cost of revenue as a percent of operating revenue was lower in the third quarter of 2025 compared to 2024 primarily due to benefits from the Company's enterprise initiatives, partially offset by higher employee-related expenses. In the year-to-date period, Cost of revenue was $6.69 billion and $6.64 billion in 2025 and 2024, respectively, an increase of 0.7%. Excluding the first quarter 2024 LIFO accounting method change of $117 million, Cost of revenue decreased 1.0% in 2025 compared to 2024 primarily due to lower revenue and the effect of foreign currency translation. Cost of revenue, excluding the first quarter 2024 LIFO accounting method change, as a percent of operating revenue was lower in the year-to-date period of 2025 compared to 2024 primarily due to benefits from the Company's enterprise initiatives, partially offset by higher employee-related expenses.
Previous wording
Selling, administrative, and research and development expenses were $693 million and $686 million in the second quarter of 2025 and 2024, respectively, and $1.40 billion and $1.36 billion in the year-to-date period of 2025 and 2024, respectively. Selling, administrative, and research and development expenses as a percent of operating revenue were higher in the second quarter and year-to-date periods of 2025 compared to the respective 2024 periods primarily due to higher employee-related expenses, partially offset by benefits from the Company's enterprise initiatives.
Current wording
Selling, administrative, and research and development expenses were $676 million and $658 million in the third quarter of 2025 and 2024, respectively, and $2.08 billion and $2.02 billion in the year-to-date period of 2025 and 2024, respectively. Selling, administrative, and research and development expenses as a percent of operating revenue were flat in the third quarter as benefits from the Company's enterprise initiatives were offset by higher employee-related expenses. Selling, administrative, and research and development expenses as a percent of operating revenue were higher in the year-to-date period of 2025 compared to 2024 primarily due to higher employee-related expenses, partially offset by benefits from the Company's enterprise initiatives.
Previous wording
Amortization and impairment of intangible assets was lower in the second quarter and year-to-date periods of 2025 compared to 2024 primarily due to fully amortized intangible assets.
Current wording
Amortization and impairment of intangible assets was lower in the third quarter and year-to-date periods of 2025 compared to 2024 primarily due to fully amortized intangible assets.
Previous wording
Refer to the "Results of Operations for Total Company" and the "Results of Operation by Segment" sections for additional discussion of operating results for the second quarter and year-to-date periods of 2025 compared to 2024.
Current wording
Refer to the "Results of Operations for Total Company" and the "Results of Operation by Segment" sections for additional discussion of operating results for the third quarter and year-to-date periods of 2025 compared to 2024.
Previous wording
The Company's consolidated results of operations for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The Company's consolidated results of operations for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous wording
•Operating revenue increased in the second quarter due to the favorable effect of foreign currency translation and higher organic revenue. In the year-to-date period, operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation.
Current wording
•Operating revenue increased in the third quarter due to the favorable effect of foreign currency translation and higher organic revenue. In the year-to-date period, operating revenue declined due to lower organic revenue, partially offset by the favorable effect of foreign currency translation.
Previous wording
•Organic revenue decreased 0.4% in the second quarter and 1.0% in the year-to-date period as a decline in the Construction Products, Polymers and Fluids and Test & Measurement and Electronics segments was partially offset by growth in the Automotive OEM, Welding, Food Equipment and Specialty Products segments. Product line simplification activities reduced organic revenue by 70 basis points and 60 basis points in the second quarter and year-to-date periods, respectively.
Current wording
•Organic revenue increased 0.7% in the third quarter as growth in the Automotive OEM, Welding, Specialty Products and Food Equipment segments was partially offset by a decline in the Polymers & Fluids, Construction Products and Test & Measurement and Electronics segments. In the year-to-date period, organic revenue declined 0.4% as a decrease in the Construction Products, Test & Measurement and Electronics and Polymers & Fluids segments was partially offset by growth in the Automotive OEM, Welding, Food Equipment and Specialty Products segments. Product line simplification activities reduced organic revenue by 70 basis points and 60 basis points in the third quarter and year-to-date periods, respectively.
Previous wording
◦North American organic revenue decreased 1.8% in the second quarter and declined 2.5% in the year-to-date period as a decline in the Automotive OEM, Test & Measurement and Electronics, Construction Products and Polymers & Fluids segments was partially offset by growth in the Food Equipment and Specialty Products segments. Organic revenue for the Welding segment grew 1.2% in the second quarter and declined 0.6% in the year-to-date period.
Current wording
◦North American organic revenue was flat in the third quarter as an increase in the Welding, Automotive OEM and Food Equipment segments was offset by a decline in the Polymers & Fluids, Test & Measurement and Electronics, Construction Products and Specialty Products segments. In the year-to-date period, organic revenue declined 1.7% as a decrease in the Test & Measurement and Electronics, Construction Products, Automotive OEM and Polymers & Fluids segments was partially offset by growth in the Food Equipment, Specialty Products and Welding segments.
Previous wording
◦Europe, Middle East and Africa organic revenue declined 2.6% in the second quarter as a decrease in four segments was partially offset by growth in the Automotive OEM, Welding and Specialty Products segments. In the year-to-date period, organic revenue decreased 2.8% as a decline in six segments was partially offset by an increase in the Welding segment.
Current wording
◦Europe, Middle East and Africa organic revenue declined 1.2% in the third quarter as a decrease in Test & Measurement and Electronics, Polymers & Fluids, Construction Products and Food Equipment segments was partially offset by an increase in the Specialty Products, Automotive OEM and Welding segments. In the year-to-date period, organic revenue decreased 2.3% as a decline in five segments was partially offset by an increase in the Welding and Specialty Products segments.
Previous wording
◦Asia Pacific organic revenue increased 9.0% in the second quarter and grew 7.9% in the year-to-date period primarily due to growth in the Automotive OEM segment. Organic revenue in China grew 14.9% in the second quarter and increased 13.4% in the year-to-date period as growth in the Automotive OEM, Test & Measurement and Electronics, Welding and Polymers and Fluids segments was partially offset by a decrease in the Food Equipment and Construction Products segments. Organic revenue for the Specialty Products segment decreased 14.2% in the second quarter and grew 8.3% in the year-to-date period.
Current wording
◦Asia Pacific organic revenue increased 6.7% in the third quarter and 7.5% in the year-to-date period primarily due to growth in the Automotive OEM segment. Organic revenue in China grew 10.1% in the third quarter and 12.2% in the year-to-date period as growth in the Automotive OEM, Test & Measurement and Electronics, Welding and Polymers and Fluids segments was partially offset by a decrease in the Food Equipment and Construction Products segments. Organic revenue for the Specialty Products segment decreased 1.8% in the third quarter and grew 4.5% in the year-to-date period.
Previous wording
•Operating income of $1.1 billion increased 1.2% in the second quarter compared to the prior year. In the year-to-date period, operating income of $2.0 billion declined 7.4%, or declined 2.2% excluding the $117 million favorable impact of the first quarter 2024 LIFO accounting method change discussed previously.
Current wording
•Operating income of $1.1 billion increased 5.7% in the third quarter compared to the prior year. In the year-to-date period, operating income of $3.1 billion declined 3.2%, or increased 0.5% excluding the $117 million favorable impact of the first quarter 2024 LIFO accounting method change.
Previous wording
•In the year-to-date period, operating margin of 25.6% decreased 170 basis points. Excluding the 150 basis points of favorable impact from the first quarter 2024 LIFO accounting method change, operating margin decreased 20 basis points compared to the prior year primarily driven by higher employee-related expenses, including higher health and welfare expenses, and unfavorable operating leverage of 20 basis points, partially offset by benefits from the Company's enterprise initiatives of 120 basis points.
Current wording
•In the year-to-date period, operating margin of 26.2% decreased 80 basis points. Excluding the 100 basis points of favorable impact from the first quarter 2024 LIFO accounting method change, operating margin increased 20 basis points compared to the prior year primarily driven by benefits from the Company's enterprise initiatives of 130 basis points, partially offset by higher employee-related expenses, including higher health and welfare expenses.
Previous wording
•The Company's effective tax rate for the second quarter of 2025 and 2024 was 24.4% in both periods, respectively, and 23.1% and 24.0% for the year-to-date periods of 2025 and 2024, respectively. The effective tax rates for 2025 and 2024 included discrete tax benefits related to excess tax benefits from stock-based compensation of $1 million for both the second quarter of 2025 and 2024 and $5 million and $10 million for the year-to-date period of 2025 and 2024, respectively. Additionally, the effective tax rate for the year-to-date period of 2025 included a discrete tax benefit of $21 million in the first quarter of 2025 related to the reversal of a valuation allowance on net operating loss carryforwards.
Current wording
•The Company's effective tax rate for the third quarter of 2025 and 2024 was 21.8% and 14.9%, respectively, and 22.7% and 20.4% for the year-to-date periods of 2025 and 2024, respectively. The effective tax rates for the third quarter and year-to-date periods of 2025 benefited from a discrete tax benefit of $43 million related to the estimated U.S. federal tax liability for 2024, partially offset by a $16 million discrete tax expense related primarily to the resolution of a foreign tax audit. Additionally, the effective tax rate for the year-to-date period of 2025 included a discrete tax benefit of $21 million in the first quarter of 2025 related to the reversal of a valuation allowance on net operating loss carryforwards. The effective tax rates for the third quarter and year-to-date periods of 2024 benefited from discrete income tax benefits in the third quarter of 2024 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. Refer to Note 3. Sale of Noncontrolling Interest in Wilsonart International Holdings LLC in Item 1. Financial Statements for more information regarding the Wilsonart transaction. Additionally, the effective tax rates for 2025 and 2024 included discrete tax benefits related to excess tax benefits from stock-based compensation of $2 million and $1 million for the third quarter of 2025 and 2024, respectively, and $7 million and $11 million for the year-to-date periods of 2025 and 2024, respectively.
Previous wording
•The Company repurchased approximately 1.5 million and 3.0 million shares of its common stock in the second quarter and year-to-date periods of 2025, respectively, for approximately $375 million and $750 million, respectively.
Current wording
•The Company repurchased approximately 1.5 million and 4.5 million shares of its common stock in the third quarter and year-to-date periods of 2025, respectively, for approximately $375 million and $1.1 billion, respectively.
Previous wording
Total operating revenue and operating income for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
Total operating revenue and operating income for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous wording
Segments are allocated a fixed overhead charge based on the segment's revenue. Expenses not charged to the segments are reported separately as Unallocated. Because the Unallocated category includes a variety of items, it is subject to fluctuations on a quarterly and annual basis. Unallocated in the three and six months ended June 30, 2025 included higher employee-related expenses, including higher health and welfare expenses, as compared to the prior year. Unallocated in the six months ended June 30, 2024 included the favorable pre-tax cumulative effect of the LIFO accounting method change of $117 million in the first quarter of 2024. Refer to Note 1. Significant Accounting Policies in Item 1. Financial Statements for additional information regarding this change in accounting method.
Current wording
Segments are allocated a fixed overhead charge based on the segment's revenue. Expenses not charged to the segments are reported separately as Unallocated. Because the Unallocated category includes a variety of items, it is subject to fluctuations on a quarterly and annual basis. Unallocated in the nine months ended September 30, 2025 included higher employee-related expenses, including higher health and welfare expenses, as compared to the prior year. Unallocated in the nine months ended September 30, 2024 included the favorable pre-tax cumulative effect of the LIFO accounting method change of $117 million in the first quarter of 2024. Refer to Note 1. Significant Accounting Policies in Item 1. Financial Statements for additional information regarding this change in accounting method.
Previous wording
The results of operations for the Automotive OEM segment for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The results of operations for the Automotive OEM segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous wording
•Organic revenue increased 2.4% in the second quarter and grew 0.6% in the year-to-date period compared to worldwide auto builds which grew 3% in the second quarter and year-to-date periods. Product line simplification activities reduced organic revenue by 140 basis points in the second quarter and 120 basis points in the year-to-date period.
Current wording
•Organic revenue increased 5.0% in the third quarter and 2.0% in the year-to-date period compared to worldwide auto builds which grew 4% in the third quarter and year-to-date periods. Product line simplification activities reduced organic revenue by 140 basis points in the third quarter and 130 basis points in the year-to-date period.
Previous wording
◦North American organic revenue decreased 6.7% and 6.1% in the second quarter and year-to-date periods, respectively, compared to North American auto builds which decreased 3% in the second quarter and declined 4% in the year-to-date period, primarily due to product line simplification activities. Auto builds for the Detroit 3, where the Company has higher content, declined 6% in the second quarter and decreased 8% in the year-to-date period.
Current wording
◦North American organic revenue increased 3.1% and declined 3.2% in the third quarter and year-to-date periods, respectively, compared to North American auto builds which increased 5% in the third quarter and declined 1% in the year-to-date period, primarily due to product line simplification activities.
Previous wording
◦European organic revenue grew 1.0% in the second quarter and decreased 2.8% in the year-to-date period compared to European auto builds which decreased 2% in the second quarter and declined 3% in the year-to-date period. The business outperformed the market primarily due to market penetration gains.
Current wording
◦European organic revenue grew 2.0% in the third quarter and decreased 1.4% in the year-to-date period compared to European auto builds which increased 1% in the third quarter and declined 2% in the year-to-date period. The business outperformed the market primarily due to market penetration gains.
Previous wording
◦Asia Pacific organic revenue increased 17.0% and 14.6% in the second quarter and year-to-date periods, respectively. China organic revenue grew 21.6% and increased 17.9% in the second quarter and year-to-date periods, respectively, including growth in the electric vehicles market, versus China auto builds which grew 9% in the second quarter and increased 12% in the year-to-date period. The business outperformed the market primarily due to market penetration gains.
Current wording
◦Asia Pacific organic revenue increased 10.7% and 13.2% in the third quarter and year-to-date periods, respectively. China organic revenue grew 10.1% and 15.1% in the third quarter and year-to-date periods, respectively, including growth in the electric vehicles market, versus China auto builds which grew 10% in the third quarter and increased 12% in the year-to-date period. Auto builds of foreign automotive manufacturers in China decreased 2% and 4% in the third quarter and year-to-date periods, respectively. The business outperformed the market primarily due to market penetration gains.
Previous wording
•Operating margin was 21.3% in the second quarter. The increase of 190 basis points was primarily due to benefits from the Company's enterprise initiatives, favorable operating leverage of 40 basis points, lower restructuring expenses of 40 basis points and favorable price/cost of 20 basis points, partially offset by higher employee-related expenses and continued investment in the business.
Current wording
•In the year-to-date period, operating margin of 20.8% increased 130 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable operating leverage of 40 basis points, partially offset by higher employee-related expenses, continued investment in the business and higher restructuring expenses of 20 basis points.
Previous wording
The results of operations for the Food Equipment segment for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The results of operations for the Food Equipment segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous wording
•Operating revenue increased in the second quarter due to the favorable effect of foreign currency translation and higher organic revenue. In the year-to-date period, operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation.
Current wording
•Operating revenue increased in the third quarter due to the favorable effect of foreign currency translation and higher organic revenue. In the year-to-date period, operating revenue grew due to higher organic revenue and the favorable effect of foreign currency translation.
Previous wording
◦North American organic revenue increased 4.5% in the second quarter. Equipment organic revenue increased 3.8% primarily due to higher demand in the institutional, independent restaurant, quick serve restaurant and food retail end markets. Service organic revenue grew 5.7%. In the year-to-date period, North American organic revenue grew 2.7%. Equipment organic revenue grew 1.5% primarily due to higher demand in the institutional end market, partially offset by a decline in the full service and food retail end markets. Service organic revenue increased 4.7%.
Current wording
◦North American organic revenue increased 1.9% in the third quarter. Equipment organic revenue increased 0.8% primarily due to higher demand in the institutional, independent restaurant and quick serve restaurant end markets, partially offset by lower demand in the food retail end market. Service organic revenue grew 3.5%. In the year-to-date period, North American organic revenue grew 2.4%. Equipment organic revenue grew 1.2% primarily due to higher demand in the institutional end market, partially offset by a decline in the full service and food retail end markets. Service organic revenue increased 4.3%.
Previous wording
◦International organic revenue declined 4.7% in the second quarter. Equipment organic revenue decreased 6.0% primarily due to lower demand in the European cooking, warewash and refrigeration end markets and lower demand in Asia. Service organic revenue declined 2.4%. In the year-to-date period, international organic revenue decreased 1.6%. Equipment organic revenue declined 2.4% primarily driven by lower demand in the European cooking and refrigeration end markets and lower demand in Asia, partially offset by higher demand in the European warewash end market. Service organic revenue decreased 0.2%.
Current wording
◦International organic revenue declined 1.2% in the third quarter. Equipment organic revenue decreased 2.3% primarily due to lower demand in the European cooking and refrigeration end markets and lower demand in Asia, partially offset by growth in the European warewash end market. Service organic revenue grew 1.2%. In the year-to-date period, international organic revenue decreased 1.5%. Equipment organic revenue declined 2.3% primarily driven by lower demand in the European cooking and refrigeration end markets and lower demand in Asia, partially offset by higher demand in the European warewash end market. Service organic revenue increased 0.2%.
Previous wording
•Operating margin was 27.7% in the second quarter. The increase of 60 basis points was primarily due to benefits from the Company's enterprise initiatives, partially offset by higher employee-related expenses and additional investment in the business.
Current wording
•Operating margin was 29.2% in the third quarter. The increase of 80 basis points was primarily due to benefits from the Company's enterprise initiatives and favorable operating leverage of 10 basis points, partially offset by higher employee-related expenses and additional investment in the business.
Previous wording
•In the year-to-date period, operating margin of 27.1% increased 60 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable operating leverage of 20 basis points, partially offset by higher employee-related expenses and additional investment in the business.
Current wording
•In the year-to-date period, operating margin of 27.8% increased 60 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable operating leverage of 20 basis points, partially offset by higher employee-related expenses and additional investment in the business.
Previous wording
•Operating revenue increased in the second quarter due to the favorable effect of foreign currency translation, partially offset by lower organic revenue. In the year-to-date period, operating revenue declined primarily due to lower organic revenue, partially offset by the favorable effect of foreign currency translation.
Current wording
•Operating revenue increased in the third quarter due to the favorable effect of foreign currency translation, partially offset by lower organic revenue. In the year-to-date period, operating revenue declined due to lower organic revenue, partially offset by the favorable effect of foreign currency translation.
Previous wording
•Organic revenue decreased 0.7% and 3.1% in the second quarter and year-to-date periods, respectively, primarily due to lower demand in the MTS Test & Simulation business and in the general industrial end market, partially offset by higher demand in the semiconductor end market.
Current wording
•Organic revenue decreased 1.4% in the third quarter and 2.5% in the year-to-date period primarily due to lower demand in the MTS Test & Simulation business and in the general industrial end market, partially offset by higher demand in the semiconductor end market.
Previous wording
◦Organic revenue for the test and measurement businesses decreased 3.1% in the second quarter and declined 6.2% in the year-to-date period primarily driven by a decline in the MTS Test & Simulation business, partially offset by higher demand in the semiconductor end market, primarily in Asia Pacific and North America. The MTS Test & Simulation business had a challenging comparison to the prior year which had 5.2% and 14.0% growth in the second quarter and year-to-date periods of 2024, respectively.
Current wording
◦Organic revenue for the test and measurement businesses decreased 0.6% in the third quarter and declined 4.3% in the year-to-date period primarily driven by a decline in the MTS Test & Simulation business and in the general industrial end market, partially offset by higher demand in the semiconductor end market, primarily in Asia Pacific and North America.
Previous wording
◦Electronics organic revenue increased 4.0% in the second quarter and grew 3.4% in the year-to-date period primarily due to higher demand in Asia Pacific, primarily in the semiconductor end market. The electronics assembly businesses declined 0.1% in the second quarter and 0.7% in the year-to-date period primarily due to lower demand in North America, partially offset by higher demand in Asia Pacific. The other electronics businesses, which include the contamination control, static control and pressure sensitive adhesives businesses, grew 5.5% and 4.8% in the second quarter and year-to-date periods, respectively, due to higher demand in Asia Pacific and North America.
Current wording
◦Electronics organic revenue decreased 1.9% in the third quarter with lower demand across all major regions primarily due to lower demand in the semiconductor end market. In the year-to-date period, organic revenue grew 1.5% primarily due to higher demand in Asia Pacific and Europe, primarily in the semiconductor end market, partially offset by lower demand in North America. The electronics assembly businesses declined 9.2% in the third quarter and decreased 3.7% in the year-to-date period primarily due to lower demand in North America. The other electronics businesses, which include the contamination control, static control and pressure sensitive adhesives businesses, grew 1.0% in the third quarter primarily due to higher demand in North America. In the year-to-date period, organic revenue increased 3.5% with growth across all major regions.
Previous wording
•Operating margin was 22.8% in the second quarter. The decrease of 70 basis points was primarily due to higher employee-related expenses, product mix, unfavorable price/cost of 30 basis points and the unfavorable operating leverage of 20 basis points, partially offset by benefits from the Company's enterprise initiatives and lower intangible asset amortization expense.
Current wording
•Operating margin was 25.4% in the third quarter. The decrease of 30 basis points was primarily due to higher restructuring expenses of 50 basis points, unfavorable operating leverage of 30 basis points, higher employee-related expenses and product mix, partially offset by benefits from the Company's enterprise initiatives and lower intangible asset amortization expense.
Previous wording
•In the year-to-date period, operating margin of 22.1% decreased 130 basis points primarily driven by unfavorable operating leverage of 80 basis points, higher employee-related expenses, product mix, higher restructuring expenses of 20 basis points and the dilutive impact from an acquisition, partially offset by benefits from the Company's enterprise initiatives and lower intangible asset amortization expense.
Current wording
•In the year-to-date period, operating margin of 23.2% decreased 100 basis points primarily driven by unfavorable operating leverage of 80 basis points, higher employee-related expenses, higher restructuring expenses of 30 basis points and product mix, partially offset by benefits from the Company's enterprise initiatives and lower intangible asset amortization expense.
Previous wording
The results of operations for the Welding segment for the second quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The results of operations for the Welding segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Previous wording
•Operating revenue grew in the second quarter due to higher organic revenue and the favorable effect of foreign currency translation. In the year-to-date period, operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation.
Current wording
•Operating revenue grew in the third quarter due to higher organic revenue and the favorable effect of foreign currency translation. In the year-to-date period, operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation.
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Previous report — wording carried elsewhere
•Operating revenue increased in the second quarter due to the favorable effect of foreign currency translation, partially offset by lower organic revenue. In the year-to-date period, operating revenue declined due to lower organic revenue and the unfavorable effect of foreign currency translation.
Previous report — wording carried elsewhere
The Company believes cash generated by operations and liquidity provided by the Company's commercial paper program will continue to be sufficient to fund cash requirements in the U.S.