ILLINOIS TOOL WORKS INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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.
Mar 31, 2026 · Filed May 7, 2026
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 2025-09-30; filed 2025-10-24.
0000049826-25-000057
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000049826-26-000028
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 188 current paragraphs.
92 unchanged; 64 reworded; 27 added; 47 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 26 previous and 18 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 (27)
Current report
•80/20 Front-to-Back defines how the Company operates. It is a unique set of proprietary tools and methodologies that ITW divisions utilize to structure and operate their businesses to (a) maximize the performance, execution, and value-add provided to their largest and most profitable customers (the "80"), and (b) minimize the costs, complexity, and distractions associated with serving less profitable accounts (the "20"). Through the application of the 80/20 Front-to-Back process, ITW divisions deliver best-in-class customer-facing execution, high-quality organic growth, and superior profitability and return on capital performance.
Current report
•Customer-Back Innovation ("CBI") drives the Company's approach to innovation and development. ITW innovates from the customer back, rather than from a centralized research and development center out. ITW divisions partner with their key customers to create unique solutions that solve difficult technical challenges and improve business performance. This disciplined, repeatable process directs innovation efforts toward high-growth markets with solid long-term fundamentals.
Current report
•ITW's Decentralized, Entrepreneurial Culture is the key to the Company's execution. Divisions are clear on the expectations of the ITW Business Model, strategy, and values. Within this framework, business teams are empowered to make decisions and customize their approach to maximize the relevance and impact of the ITW Business Model for their specific customers and end markets. This "flexibility within the framework" culture encourages an ownership mindset and accountability, enabling the Company to consistently deliver differentiated results.
Current report
ENTERPRISE STRATEGY: LEVERAGING THE ITW BUSINESS MODEL TO ITS FULL POTENTIAL
Current report
NEXT PHASE: 2024 - 2030
Current report
In the Next Phase of the Company's Enterprise Strategy, the ITW Business Model remains the Company's core competitive advantage and a powerful performance differentiator, uniquely positioning the Company to navigate a global operating environment characterized by increasing volatility and a rapid pace of change. The 80/20 Front-To-Back process provides the strategic clarity to deliver high-quality organic growth and superior customer service, profitability and returns on capital. Through Customer-Back Innovation, the Company innovates technical solutions to solve critical customer challenges with higher effectiveness and lower risk. The Company's decentralized entrepreneurial culture allows it to be a "fast adaptor," capable of reading and reacting to market shifts with agility. Furthermore, the Company's ability to execute and invest consistently through all phases of the business cycle has become a defining strength.
Current report
As the Company advances through this Next Phase, it is continuing to improve the quality of practice in its proprietary business model while pivoting decisively to build above-market organic growth, fueled by Customer-Back Innovation execution, into a core ITW strength. Achieving high-quality organic growth of four percent or more through the cycle is the Company's highest priority in the Next Phase. CBI successes, coupled with underlying market growth and share gains, are how the Company intends to achieve its high-quality organic growth.
Current report
Cost of revenue was $2.3 billion and $2.2 billion in the first quarter of 2026 and 2025, respectively, an increase of 4.4%, primarily due to higher revenue and higher employee-related expenses. Cost of revenue as a percent of operating revenue was lower in 2026 compared to 2025 as benefits from the Company's enterprise initiatives were essentially offset by higher employee-related expenses and higher revenue.
Current report
◦North American organic revenue grew 1.2% as growth in the Test & Measurement and Electronics, Welding and Polymers & Fluids segments was partially offset by a decrease in the Food Equipment, Specialty Products, Automotive OEM and Construction Products segments.
Current report
◦Asia Pacific organic revenue grew 2.4% primarily due to growth in the Test & Measurement and Electronics segment. Organic revenue in China decreased 1.8% as a decline in the Automotive OEM, Specialty Products,
Current report
•Operating income of $1.0 billion increased 7.2%.
Current report
•Organic revenue decreased 0.9% compared to worldwide auto builds which declined 3%. Product line simplification activities reduced organic revenue by 100 basis points.
Current report
•Organic revenue decreased 2.8% as equipment organic revenue declined 6.0% and service organic revenue grew 3.2%.
Current report
◦North American organic revenue decreased 4.7%. Equipment organic revenue declined 10.1% primarily due to lower demand in the institutional and food retail end markets, partially offset by higher demand in the noninstitutional end market, primarily in the quick serve restaurant end market. Service organic revenue grew 4.1%.
Current report
•Operating revenue grew due to higher organic and acquisition revenues and the favorable effect of foreign currency translation.
Current report
•Operating margin of 22.9% increased 150 basis points primarily due to positive operating leverage of 130 basis points, benefits from the Company's enterprise initiatives and lower restructuring expenses of 50 basis points, partially offset by the dilutive impact of 60 basis points from an acquisition and higher employee-related expenses.
Current report
•Organic revenue increased 6.0% as equipment and consumables grew 8.1% and 2.1%, respectively.
Current report
◦North American organic revenue increased 8.4% primarily due to growth in the industrial and commercial end markets of 7.2% and 5.6%, respectively, and growth in the aerospace end market.
Current report
◦International organic revenue declined 6.2% primarily due to lower demand in Asia Pacific and Middle East.
Current report
•Operating margin of 32.1% decreased 40 basis points primarily due to higher employee-related expenses, partially offset by positive operating leverage of 100 basis points and benefits from the Company's enterprise initiatives.
Current report
◦Organic revenue for the fluids businesses grew 0.3% primarily driven by higher demand in the European life sciences end market, partially offset by lower demand in North America.
Current report
◦Organic revenue for the polymers businesses grew 0.2% primarily due to an increase in Asia Pacific, partially offset by a decrease in Europe and in North America.
Current report
•Organic revenue decreased 1.3% primarily due to lower demand in Europe and Asia Pacific.
Current report
◦North American organic revenue was flat as growth in the United States residential end market of 0.7% was offset by a decline in the commercial end market of 1.4% and a decline in Canada of 6.7%.
Current report
•Organic revenue decreased 4.7% as equipment sales and consumables declined 3.0% and 5.2%, respectively. Product line simplification activities reduced organic revenue by 200 basis points.
Current report
◦North American organic revenue decreased 5.8% primarily driven by a decline in the appliance, ground support equipment, consumer packaging and strength films businesses, partially offset by growth in the filter medical business.
Current report
◦International organic revenue declined 2.3% primarily due to lower demand in the appliance businesses in Asia Pacific and Europe, partially offset by growth in the European ground support equipment, specialty films and filter medical businesses.
Removed paragraphs (47)
Previous report
•ITW's 80/20 Front-to-Back process is the operating system that is applied in every ITW business. Initially introduced as a manufacturing efficiency tool in the 1980s, ITW has continually refined, improved and expanded 80/20 into a proprietary, holistic business management process that generates significant value for the Company and its customers. Through the application of data driven insights generated by 80/20 practice, ITW focuses on its largest and best opportunities (the "80") and eliminates cost, complexity and distractions associated with the less profitable opportunities (the "20"). 80/20 enables ITW businesses to consistently achieve world-class operational excellence in product availability, quality, and innovation, while generating superior financial performance;
Previous report
•Customer-back Innovation has fueled decades of profitable growth at ITW. The Company's unique innovation approach is built on insight gathered from the 80/20 Front-to-Back process. Working from the customer back, ITW businesses position themselves as the go-to problem solver for their "80" customers. ITW's innovation efforts are focused on understanding customer needs, particularly those in "80" markets with solid long-term growth fundamentals, and creating unique solutions to address those needs. These customer insights and learnings drive innovation at ITW and have contributed to a portfolio of approximately 20,900 granted and pending patents;
Previous report
•ITW's Decentralized, Entrepreneurial Culture enables ITW businesses to be fast, focused, and responsive. ITW businesses have significant flexibility within the framework of the ITW Business Model to customize their approach in order to best serve their specific customers' needs. ITW colleagues recognize their unique responsibilities to execute the Company's strategy and values. As a result, the Company maintains a focused and simple organizational structure that, combined with outstanding execution, delivers best-in-class services and solutions adapted to each business' customers and end markets.
Previous report
ENTERPRISE STRATEGY: 2012 - 2023
Previous report
OUR NEXT PHASE: 2024 - 2030
Previous report
In the Next Phase of the Company’s evolution, the ITW Business Model and the Enterprise Strategy framework will be as formidable of a competitive advantage and performance differentiator as it has been over the last decade, if not more so. Volatility, risk and the pace of change in the global operating environment will continue to increase, and a decentralized entrepreneurial culture allows the Company to be a fast adaptor – to read, react, respond and evolve. The Company’s ability to consistently execute and invest through the ups and downs of the business cycle is now a defining competitive advantage.
Previous report
Throughout the Next Phase, the Company's focus is to build organic growth into a core ITW strength on par with the Company’s world-class financial performance and operational capabilities. Throughout this phase, the Company will sustain its foundational strengths built over the past decade, including the high-quality ITW Business Model practice. Customer-back Innovation ("CBI") is the most impactful driver to achieve high-quality organic growth through the cycle by establishing trusted problem solver relationships with key customers to effectively invent solutions that address customers' most critical pain points or tackle the biggest growth opportunities. CBI successes, coupled with underlying market growth and share gains, are how the Company intends to achieve its high-quality organic growth.
Previous report
ITW will continue to drive 80/20 Front-to-Back practice excellence in every division in the Company, every day. Driving strong operational excellence in the quality of 80/20 Front-to-Back practice across the Company, division by division, will produce further customer-facing performance improvement in a number of divisions and additional structural margin expansion at the enterprise level.
Previous report
During the first quarter of 2024, the Company changed the method used to determine the cost of inventory at certain U.S. businesses from LIFO to the FIFO method, as the Company believes the FIFO method is preferable because it provides a more consistent method for valuing inventory across the Company’s operations, improves comparability with peers, and better reflects the current value of inventories at the balance sheet date. The LIFO provision for the year ended December 31, 2023 was $6 million of expense, and was not material to the Company’s results of operations, financial position or cash flows. Therefore, the Company recorded the pre-tax cumulative effect of this change in accounting method of $117 million as a reduction of Cost of revenue 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 report
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was enacted in the United States. The provisions of the Act extend and modify certain provisions of the 2017 Tax Cuts and Jobs Act. While the provisions of the Act are not expected to have a material impact on the Company's operating results, financial position or cash flows for the twelve months ending December 31, 2025, the Company is assessing the potential impact of the Act on future periods.
Previous report
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 report
◦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 report
◦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 report
•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 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.
Previous report
•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 report
•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 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.
Previous report
•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 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.
Previous 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%.
Previous report
◦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 report
•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 report
•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 report
•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 report
•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.
Previous report
•Organic revenue increased 2.8% in the third quarter as equipment grew 5.5% and consumables declined 1.7%. In the year-to-date period, organic revenue grew 1.9% as equipment increased 3.6% and consumables decreased 0.9%.
Previous report
◦North American organic revenue increased 2.5% in the third quarter as the industrial end market grew 3.1%, partially offset by a decline of 2.3% in the commercial end market. In the year-to-date period, organic revenue grew 0.4% as the industrial end market increased 1.3%, partially offset by a decrease of 2.9% in the commercial end market.
Previous report
◦International organic revenue grew 4.0% in the third quarter and 9.6% in the year-to-date period primarily due to higher demand in Asia Pacific and the Middle East.
Previous report
•Operating margin was 32.6% in the third quarter. The increase of 30 basis points was primarily due to benefits from the Company's enterprise initiatives, favorable operating leverage of 50 basis points and favorable price/cost of 20 basis points, partially offset by higher employee-related expenses and higher restructuring expenses of 20 basis points.
Previous report
•In the year-to-date period, operating margin of 32.8% increased 20 basis points compared to the prior year primarily due to benefits from the Company's enterprise initiatives, favorable operating leverage of 30 basis points and favorable price/cost of 20 basis points, partially offset by higher employee-related expenses.
Previous report
•Operating revenue decreased in the third quarter due to lower organic revenue, partially offset by the favorable effect of foreign currency translation. In the year-to-date period, operating revenue declined due to lower organic revenue and the unfavorable effect of foreign currency translation.
Previous report
•Organic revenue decreased 3.1% in the third quarter and 1.8% in the year-to-date period. 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 report
◦Organic revenue for the polymers businesses decreased 4.9% in the third quarter due to lower demand in Europe and North America, partially offset by an increase in Asia Pacific. In the year-to-date period, organic revenue declined 1.7% as a decrease in North America and Europe was partially offset by an increase in South America and Asia Pacific.
Previous report
◦Organic revenue for the fluids businesses declined 0.4% in the third quarter primarily driven by lower demand in North America, partially offset by growth in Europe, primarily due to higher demand in the hygiene end market. In the year-to-date period, organic revenue decreased 1.0% primarily due to lower demand in North America, partially offset by growth in Europe, primarily due to higher demand in the hygiene end market.
Previous report
•Operating revenue decreased in the third quarter due to lower organic revenue, partially offset by the favorable effect of foreign currency translation. In the year-to-date period, operating revenue declined due to lower organic revenue.
Previous report
◦North American organic revenue decreased 1.1% in the third quarter and 5.8% in the year-to-date period primarily due to lower demand in the residential and commercial end markets. Organic revenue in the United States residential end market declined 0.2% and 6.8% in the third quarter and year-to-date periods, respectively. The commercial end market decreased 3.9% in the third quarter and 1.4% in the year-to-date period. Organic revenue in Canada declined 7.3% in the third quarter and 1.1% in the year-to-date period.
Previous report
•Operating margin was 31.6% in the third quarter. The increase of 140 basis points was primarily due to benefits from the Company's enterprise initiatives, partially offset by unfavorable price/cost of 50 basis points, unfavorable operating leverage of 40 basis points and higher employee-related expenses.
Previous 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.
Previous 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.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Reworded paragraphs (64)
Previous wording
Illinois Tool Works Inc. (the "Company" or "ITW") is a global manufacturer of a diversified range of industrial products and equipment. As of December 31, 2024, the Company had 86 divisions with approximately 44,000 people in 51 countries.
Current wording
Illinois Tool Works Inc. (the "Company" or "ITW") is a global manufacturer of a diversified range of industrial products and equipment. As of December 31, 2025, the Company had 88 divisions with approximately 43,000 people in 49 countries.
Previous wording
The powerful and highly differentiated ITW Business Model is the Company's core source of value creation. It is the Company's competitive advantage and defines how ITW creates value for its shareholders. The ITW Business Model is comprised of three unique elements:
Current wording
The powerful and highly differentiated ITW Business Model is the Company's core source of value creation. It serves as the Company's primary competitive advantage and defines the framework through which ITW generates sustainable value for its shareholders. The ITW Business Model is comprised of three unique elements:
Previous wording
In late 2012, ITW began its strategic framework transitioning the Company to fully leverage the unique and powerful set of capabilities and operating practices of the ITW Business Model. The Company undertook a complete review of its performance, focusing on its businesses delivering consistent above-market growth with best-in-class margins and returns, and developing a strategy to replicate that performance across its operations. ITW determined that solid and consistent above-market organic growth is the core growth engine to deliver world-class financial performance and compelling long-term returns for its shareholders.
Current wording
Since the initiation of the Enterprise Strategy in 2012, the entire organization has focused on utilizing the ITW Business Model to its full potential to deliver solid growth with best-in-class margins and returns. To execute the strategy, the Company undertook a complete review of its performance, focusing on its businesses that delivered consistent above-market growth with best-in-class margins and returns, and developed a framework to replicate that performance across its operations. ITW determined that high-quality above-market organic growth is the core growth engine to deliver world-class financial performance and compelling long-term returns for its shareholders.
Previous wording
•Business Structure Simplification was implemented to simplify and scale up ITW's operating structure to support increased engineering, marketing, and sales resources, and improve global reach and competitiveness, all of which were critical to driving accelerated organic growth. ITW now has 86 scaled-up divisions with significantly enhanced focus on growth investments, core customers and products, and customer-back innovation.
Current wording
•Business Structure Simplification was implemented to simplify and scale up ITW's operating structure to support increased engineering, marketing, and sales resources, and improve global reach and competitiveness, all of which were critical to driving accelerated organic growth. ITW now has 88 scaled-up divisions with significantly enhanced focus on growth investments, core customers and products, and Customer-Back Innovation.
Previous wording
Since implementing the Company's enterprise strategy in 2012, the Company has demonstrated the compelling performance potential of the ITW Business Model and superior 80/20 management, resulting in meaningful incremental improvement in margins and returns as evidenced by the Company's operating margin and after-tax return on invested capital. At the same time, these 80/20 initiatives may also result in restructuring initiatives that reduce costs and improve profitability and returns.
Current wording
Since implementing the Company's Enterprise Strategy in 2012, the Company has demonstrated the compelling performance potential of the ITW Business Model and superior 80/20 management, resulting in meaningful incremental improvement in margins and returns as evidenced by the Company's operating margin and after-tax return on invested capital.
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 $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.
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 net assets of approximately $38 million as of March 31, 2026. The revenue for these four subsidiaries for the three months ended March 31, 2026 was approximately $6 million. 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 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.
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 negotiated with the U.S. government regarding tariffs. Tariffs on goods from many countries became effective on August 1, 2025. On February 20, 2026, the U.S. Supreme Court invalidated many of the tariffs imposed under the International Emergency Economic Powers Act (the "IEEPA"), resulting in the termination of many tariffs imposed in 2025. Following this decision, a new temporary 10 percent global tariff was imposed under the Trade Act, which may remain in effect up to 150 days. The Company believes that it continues to be 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 any increased cost due to 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
On January 2, 2024, the Company completed the acquisition of one business in the Test & Measurement and Electronics segment for $57 million, net of cash acquired. On April 1, 2024, the Company completed the acquisition of one business in the Test & Measurement and Electronics segment for $59 million, net of cash acquired. The Company has completed the allocation of purchase price for both of these acquisitions. These acquisitions were not material, individually or in the aggregate, to the Company’s results of operations, financial position or cash flows. Refer to Note 2. Acquisitions in Item 1. Financial Statements for further information regarding these acquisitions.
Current wording
On October 1, 2025, the Company completed the acquisition of one business in the Test & Measurement and Electronics segment for $120 million, net of cash acquired, and subject to certain closing adjustments. The allocation of purchase price for this acquisition will be completed as soon as practicable, but no later than one year from the acquisition date. This acquisition was not material to the Company's results of operations, financial position or cash flows. Refer to Note 2. Acquisitions in Item 1. Financial Statements for further information regarding this acquisition.
Previous 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.
Current wording
In an uncertain external environment, the Company delivered solid financial results in the first quarter of 2026 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 third 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 first quarter of 2026 compared to 2025.
Previous 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.
Current wording
Selling, administrative, and research and development expenses were $722 million and $706 million in the first quarter of 2026 and 2025, respectively, an increase of 2.3%. Selling, administrative, and research and development expenses as a percent of operating revenue were lower in 2026 compared to 2025 primarily due to benefits from the Company's enterprise initiatives, partially offset by higher selling, advertising and research and development expenses.
Previous 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.
Current wording
Amortization and impairment of intangible assets was lower in the first quarter of 2026 compared to 2025 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 third 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 first quarter of 2026 compared to 2025.
Previous wording
The Company's consolidated results of operations for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The Company's consolidated results of operations for the first quarter of 2026 and 2025 were as follows:
Previous 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.
Current wording
•Operating revenue grew due to the favorable effect of foreign currency translation and higher organic and acquisition revenues.
Previous 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.
Current wording
•Organic revenue increased 0.4% as growth in the Test & Measurement and Electronics, Welding and Polymers & Fluids segments was partially offset by a decline in the Specialty Products, Food Equipment, Automotive OEM and Construction Products segments. Product line simplification activities reduced organic revenue by 60 basis points.
Previous 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.
Current wording
◦Europe, Middle East and Africa organic revenue decreased 2.2% as a decline in the Test & Measurement and Electronics, Construction Products and Welding segments was partially offset by growth in the Specialty Products, Polymers & Fluids, Food Equipment and Automotive OEM segments.
Previous wording
•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 wording
•Operating margin of 25.4% increased 60 basis points primarily due to benefits from the Company's enterprise initiatives of 120 basis points and lower restructuring expenses of 30 basis points, partially offset by higher employee-related expenses.
Previous wording
A reconciliation of the tax rate for the three and nine month periods ended September 30, 2025, excluding the third quarter 2025 net discrete tax benefit of $27 million, which included a favorable 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, and 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:
Current wording
•The Company's effective tax rate for the first quarter of 2026 and 2025 was 20.6% and 21.7%, respectively. The effective tax rate for the first quarter of 2026 included a discrete tax benefit of $34 million primarily related to the resolution of a U.S. tax audit. The effective tax rate for the first quarter of 2025 included a discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards. Additionally, the effective tax rates included discrete tax benefits related to excess tax benefits from stock-based compensation of $4 million for both the first quarter of 2026 and 2025.
Previous wording
•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 wording
•Diluted earnings per share ("EPS") of $2.66 for the first quarter of 2026 increased 11.8%.
Previous 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.
Current wording
•The Company repurchased approximately 1.4 million shares of its common stock in the first quarter of 2026 for approximately $375 million.
Previous wording
Total operating revenue and operating income for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
Total operating revenue and operating income for the first quarter of 2026 and 2025 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 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.
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.
Previous 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:
Current wording
The results of operations for the Automotive OEM segment for the first quarter of 2026 and 2025 were as follows:
Previous 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.
Current wording
◦North American organic revenue declined 4.9% compared to North American auto builds which decreased 2%, primarily due to product line simplification activities.
Previous 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.
Current wording
◦European organic revenue increased 0.1% compared to European auto builds which declined 1%. The business outperformed the market primarily due to market penetration gains.
Previous 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.
Current wording
◦Asia Pacific organic revenue grew 2.7%, primarily due to growth in India and South Korea, partially offset by a decline in China. Organic revenue in China decreased 3.2% compared to China auto builds which declined 10%. Auto builds of foreign automotive manufacturers in China decreased 18%. The business outperformed the market primarily due to market penetration gains including growth in the electric vehicles end market.
Previous 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.
Current wording
•Operating margin of 21.0% increased 170 basis points primarily due to benefits from the Company's enterprise initiatives and lower restructuring expenses of 80 basis points, partially offset by higher employee-related expenses, continued investment in the business and unfavorable operating leverage of 20 basis points.
Previous 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:
Current wording
The results of operations for the Food Equipment segment for the first quarter of 2026 and 2025 were as follows:
Previous 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%.
Current wording
◦International organic revenue grew 0.2%. Equipment organic revenue decreased 0.4% primarily due to lower demand in the European cooking and refrigeration end markets, partially offset by higher demand in the European warewash end market and higher demand in Asia. Service organic revenue grew 1.5%.
Previous wording
•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 wording
•Operating margin of 24.7% decreased 180 basis points primarily due to product mix, unfavorable operating leverage of 60 basis points and higher employee-related expenses, partially offset by benefits from the Company's enterprise initiatives and lower restructuring expenses of 20 basis points.
Previous wording
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 wording
The results of operations for the Test & Measurement and Electronics segment for the first quarter of 2026 and 2025 were as follows:
Previous wording
•On April 1, 2024, the Company completed the acquisition of one business in the Test & Measurement and Electronics segment for $59 million, net of cash acquired. Refer to Note 2. Acquisitions in Item 1. Financial Statements for additional information regarding this acquisition.
Current wording
•On October 1, 2025, the Company completed the acquisition of one business in the Test & Measurement and Electronics segmentfor $120 million, net of cash acquired. Refer to Note 2. Acquisitions in Item 1. Financial Statements for further information regarding this acquisition.
Previous 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.
Current wording
•Organic revenue increased 4.6% primarily due to higher demand in the semiconductor and electronics end markets, partially offset by lower demand in the general industrial end market.
Previous 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.
Current wording
◦Organic revenue for the test and measurement businesses increased 1.4% driven by higher demand in the semiconductor end market, primarily in North America and Asia Pacific, partially offset by a decline in the MTS Test & Simulation business.
Previous 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.
Current wording
◦Electronics organic revenue increased 10.3% primarily due to higher demand in the semiconductor end market. The electronics assembly businesses grew 24.7% primarily due to higher demand in North America and Asia Pacific. The other electronics businesses, which include the contamination control, static control and pressure sensitive adhesives businesses, grew 5.1% primarily due to higher demand in North America and Asia Pacific, partially offset by a decline in Europe.
Previous 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:
Current wording
The results of operations for the Welding segment for the first quarter of 2026 and 2025 were as follows:
Previous 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.
Current wording
•Operating revenue grew due to higher organic revenue and the favorable effect of foreign currency translation.
Previous wording
The results of operations for the Polymers & Fluids segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:
Current wording
The results of operations for the Polymers & Fluids segment for the first quarter of 2026 and 2025 were as follows:
Previous wording
•Organic revenue decreased 2.3% in the third quarter and 5.6% in the year-to-date period due to lower demand across all major regions. Product line simplification activities reduced organic revenue by 130 basis points in the third quarter and 100 basis points in the year-to-date period.
Current wording
•Organic revenue increased 1.7% due to higher demand across all major regions. Product line simplification activities reduced organic revenue by 70 basis points.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Construction Products and Food Equipment segments was partially offset by growth in the Test & Measurement and Electronics, Polymers & Fluids and Welding segments.
Current report — wording carried from elsewhere
•Operating revenue grew due to the favorable effect of foreign currency translation and higher organic revenue.
Current report — wording carried from elsewhere
•Operating revenue declined due to lower organic revenue, partially offset by the favorable effect of foreign currency translation.
Current report — wording carried from elsewhere
A reconciliation of the tax rate for the three month period ended March 31, 2026, excluding the first quarter 2026 discrete tax benefit of $34 million primarily related to the resolution of a U.S. tax audit, is as follows:
Current report — wording carried from elsewhere
A reconciliation of the tax rate for the three month period ended March 31, 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: