UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~September~~March 3031, ~~2025~~2026
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______________ to _______________

Commission File Number: 1-4797

ILLINOIS TOOL WORKS INC.

(Exact name of registrant as specified in its charter)

Delaware

36-1258310

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification Number)

155 Harlem Avenue

Glenview

60025

(Address of principal executive offices)

(Zip Code)

(Registrant's telephone number, including area code) 847-724-7500

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock	ITW	New York Stock Exchange
0.625% Euro Notes due 2027	ITW27	New York Stock Exchange
3.250% Euro Notes due 2028	ITW28	New York Stock Exchange
2.125% Euro Notes due 2030	ITW30	New York Stock Exchange
1.00% Euro Notes due 2031	ITW31	New York Stock Exchange
3.375% Euro Notes due 2032	ITW32	New York Stock Exchange
3.00% Euro Notes due 2034	ITW34	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of registrant's common stock, $0.01 par value, outstanding at ~~September~~March 3031, ~~2025~~2026: ~~290~~287.17 million

	Table of Contents
	PART I - Financial Information
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1917
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3832
Item 4.	Controls and Procedures	3832
	PART II - Other Information
Item 1.	Legal Proceedings	3933
Item 1A.	Risk Factors	3933
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3933
Item 5.	Other Information	39
Item 6.	Exhibits	34
Item 6.	Exhibits	40
Signatures		35
Signatures		41

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

Illinois Tool Works Inc. and Subsidiaries

Statement of Income (Unaudited)

Three Months Ended

~~Nine Months Ended~~

September 30,

March 31,

In millions except per share amounts

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Operating Revenue

4,~~059~~016

3,~~966~~839

~~11,951~~

~~11,966~~

Cost of revenue

2,~~253~~256

2,~~230~~161

~~6,685~~

~~6,637~~

Selling, administrative, and research and development expenses

~~676~~722

~~658~~706

~~2,075~~

~~2,020~~

Amortization and impairment of intangible assets

2621

Operating Income

1,~~112~~020

~~1,052~~951

~~3,131~~

~~3,233~~

Interest expense

(7573)

(6968)

~~(217)~~

~~(215)~~

Other income (expense)

1220

~~379~~12

~~421~~

Income Before Taxes

~~1,049~~967

~~1,362~~895

~~2,942~~

~~3,439~~

Income Taxes

~~228~~199

~~202~~195

~~666~~

~~701~~

Net Income

~~821~~768

~~1,160~~700

~~2,276~~

~~2,738~~

Net Income Per Share:

Basic

2.8266

32.9239

~~7.79~~

~~9.20~~

Diluted

2.8166

32.9138

~~7.77~~

~~9.17~~

Shares of Common Stock Outstanding During the Period:

Average

~~290~~288.83

~~296~~293.16

~~292.2~~

~~297.6~~

Average assuming dilution

~~291~~289.71

~~297~~294.05

~~293.0~~

~~298.5~~

The Notes to Financial Statements are an integral part of this statement.

Illinois Tool Works Inc. and Subsidiaries

Statement of Comprehensive Income (Unaudited)

Three Months Ended

~~Nine Months Ended~~

September 30,

March 31,

In millions

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Net Income

~~821~~768

~~1,160~~700

~~2,276~~

~~2,738~~

Foreign currency translation adjustments, net of tax

~~(8)~~24

73—

~~(20)~~

Pension and other postretirement benefit adjustments, net of tax

—1

3(1)

~~(1)~~

Other comprehensive income (loss)

~~(8)~~25

76(1)

~~(15)~~

Comprehensive Income

~~813~~793

~~1,236~~699

~~2,277~~

~~2,723~~

The Notes to Financial Statements are an integral part of this statement.

Illinois Tool Works Inc. and Subsidiaries

Statement of Financial Position (Unaudited)

In millions except per share amounts	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Assets
Current Assets:
Cash and equivalents	$	~~924~~827	$	~~948~~851
Trade receivables	3,~~255~~380		23,~~991~~227
Inventories	1,~~725~~726		1,~~605~~659
Prepaid expenses and other current assets	~~416~~402		~~312~~463
Total current assets	6,~~320~~335		56,~~856~~200
Net plant and equipment	2,~~203~~230		2,~~036~~230
Goodwill	5,~~028~~083		45,~~839~~098
Intangible assets	~~540~~574		~~592~~591
Deferred income taxes	~~573~~505		~~369~~519
Other assets	1,~~471~~537		1,~~375~~510
	$	16,~~135~~264	$	1516,~~067~~148
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt	$	12,~~267~~545	$	12,~~555~~286
Accounts payable	~~608~~609		~~519~~522
Accrued expenses	1,~~567~~534		1,~~576~~636
Cash dividends payable	~~467~~463		~~441~~465
Income taxes payable	~~223~~180		217
Total current liabilities	45,~~132~~331		45,~~308~~126
Noncurrent Liabilities:
Long-term debt	76,~~675~~603		6,~~308~~683
Deferred income taxes	~~149~~158		~~119~~154
Other liabilities	~~970~~942		~~1,015~~959
Total noncurrent liabilities	87,~~794~~703		7,~~442~~796
Stockholders' Equity:
Common stock (Authorized- 700.0 shares; par value of $0.01 per share):
Issued- 550.0 shares in 2025 and 2024Outstanding- 290.1 shares in 2025 and 294.0 shares in 2024	6		6
Issued- 550.0 shares in 2026 and 2025Outstanding- 287.7 shares in 2026 and 288.6 shares in 2025	6		6
Additional paid-in-capital	1,~~751~~817		1,~~669~~771
Retained earnings	2930,~~825~~454		2830,~~893~~150
Common stock held in treasury	(2627,~~498~~246)		(2526,~~375~~875)
Accumulated other comprehensive income (loss)	(1,~~876~~802)		(1,~~877~~827)
Noncontrolling interest	1		1
Total stockholders' equity	3,~~209~~230		3,~~317~~226
	$	16,~~135~~264	$	1516,~~067~~148

The Notes to Financial Statements are an integral part of this statement.

Illinois Tool Works Inc. and Subsidiaries

Statement of Changes in Stockholders' Equity (Unaudited)

In millions except per share amounts	Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held in Treasury		Accumulated Other Comprehensive Income (Loss)		Non-controllingInterest		Total
Three Months Ended September 30, 2025
Three Months Ended March 31, 2026
Balance at June 30, 2025	$	6	$	1,725	$	29,471	$	(26,124)	$	(1,868)	$	1	$	3,211
Balance at December 31, 2025	$	6	$	1,771	$	30,150	$	(26,875)	$	(1,827)	$	1	$	3,226
Net income	—		—		~~821~~768		—		—		—		~~821~~768
Common stock issued for stock-based compensation	—		928		—		56		—		—		1434
Stock-based compensation expense	—		1718		—		—		—		—		1718
Repurchases of common stock	—		—		—		(375)		—		—		(375)
Excise tax on repurchases of common stock	—		—		—		(42)		—		—		(42)
Dividends declared ($1.61 per share)	—		—		(~~467~~464)		—		—		—		(~~467~~464)
Other comprehensive income (loss)	—		—		—		—		~~(8)~~25		—		~~(8)~~25
Balance at September 30, 2025	$	6	$	1,751	$	29,825	$	(26,498)	$	(1,876)	$	1	$	3,209
Balance at March 31, 2026	$	6	$	1,817	$	30,454	$	(27,246)	$	(1,802)	$	1	$	3,230
Three Months Ended September 30, 2024
Three Months Ended March 31, 2025
Balance at June 30, 2024	$	6	$	1,636	$	27,866	$	(24,622)	$	(1,925)	$	1	$	2,962
Net income	—		—		1,160		—		—		—		1,160
Common stock issued for stock-based compensation	—		1		—		1		—		—		2
Stock-based compensation expense	—		14		—		—		—		—		14
Repurchases of common stock	—		—		—		(375)		—		—		(375)
Excise tax on repurchases of common stock	—		—		—		(4)		—		—		(4)
Dividends declared ($1.50 per share)	—		—		(443)		—		—		—		(443)
Other comprehensive income (loss)	—		—		—		—		76		—		76
Balance at September 30, 2024	$	6	$	1,651	$	28,583	$	(25,000)	$	(1,849)	$	1	$	3,392
Nine Months Ended September 30, 2025
Balance at December 31, 2024	$	6	$	1,669	$	28,893	$	(25,375)	$	(1,877)	$	1	$	3,317
Net income	—		—		~~2,276~~700		—		—		—		~~2,276~~700
Common stock issued for stock-based compensation	—		3020		—		127		—		—		4227
Stock-based compensation expense	—		5216		—		—		—		—		5216
Repurchases of common stock	—		—		—		(~~1,125~~375)		—		—		(~~1,125~~375)
Excise tax on repurchases of common stock	—		—		—		(103)		—		—		(103)
Dividends declared ($4.61 per share)	—		—		(1,344)		—		—		—		(1,344)
Dividends declared ($1.50 per share)	—		—		(439)		—		—		—		(439)
Other comprehensive income (loss)	—		—		—		—		(1)		—		(1)
Balance at September 30, 2025	$	6	$	1,751	$	29,825	$	(26,498)	$	(1,876)	$	1	$	3,209
Balance at March 31, 2025	$	6	$	1,705	$	29,154	$	(25,746)	$	(1,878)	$	1	$	3,242
Nine Months Ended September 30, 2024
Balance at December 31, 2023	$	6	$	1,588	$	27,122	$	(23,870)	$	(1,834)	$	1	$	3,013
Net income	—		—		2,738		—		—		—		2,738
Common stock issued for stock-based compensation	—		15		—		5		—		—		20
Stock-based compensation expense	—		48		—		—		—		—		48
Repurchases of common stock	—		—		—		(1,125)		—		—		(1,125)
Excise tax on repurchases of common stock	—		—		—		(10)		—		—		(10)
Dividends declared ($4.30 per share)	—		—		(1,277)		—		—		—		(1,277)
Other comprehensive income (loss)	—		—		—		—		(15)		—		(15)
Balance at September 30, 2024	$	6	$	1,651	$	28,583	$	(25,000)	$	(1,849)	$	1	$	3,392

The Notes to Financial Statements are an integral part of this statement.

Illinois Tool Works Inc. and Subsidiaries

Statement of Cash Flows (Unaudited)

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
In millions	~~2025~~2026		~~2024~~2025
Cash Provided by (Used for) Operating Activities:
Net income	$	~~2,276~~768	$	~~2,738~~700
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	~~234~~81		~~224~~74
Amortization and impairment of intangible assets	6018		7621
Change in deferred income taxes	~~(39)~~1		(~~166~~17)
Net provision for (recoveries of) uncollectible accounts	41		(2)
(Income) loss from investments	(1)		—1
(Gain) loss on sale of plant and equipment	2—		~~(1)~~—
Gain on sale of noncontrolling interest in Wilsonart International Holdings LLC	—		(363)
Stock-based compensation expense	18		16
Stock-based compensation expense	52		48
Other non-cash items, net	2		3
Cumulative effect of change in inventory accounting method	—		(117)
Other non-cash items, net	5		4
Change in assets and liabilities, net of acquisitions and divestitures:
(Increase) decrease in-
Trade receivables	(~~135~~165)		(93120)
Inventories	(4875)		22(37)
Prepaid expenses and other assets	(6012)		(2965)
Increase (decrease) in-
Accounts payable	6091		~~(29)~~64
Accrued expenses and other liabilities	(91100)		(51123)
Income taxes	(~~156~~6)		~~(94)~~72
Other, net	—		—1
Net cash provided by operating activities	~~2,163~~623		~~2,167~~592
Cash Provided by (Used for) Investing Activities:
Acquisition of businesses (excluding cash and equivalents)	1—		~~(115)~~2
Additions to plant and equipment	(~~314~~95)		(~~319~~96)
Proceeds from investments	6—		10—
Proceeds from sale of plant and equipment	72		103
Proceeds from sale of operations and affiliates	1		—
Other, net	(6)		(1)
Proceeds from sale of noncontrolling interest in Wilsonart International Holdings LLC	—		395
Net cash provided by (used for) investing activities	(99)		(92)
Other, net	(1)		(8)
Net cash provided by (used for) investing activities	(300)		(27)
Cash Provided by (Used for) Financing Activities:
Cash dividends paid	(~~1,318~~465)		(~~1,252~~441)
Issuance of common stock	6052		4344
Repurchases of common stock	(~~1,125~~375)		(~~1,125~~375)
Net proceeds from (repayments of) debt with original maturities of three months or less	~~489~~259		~~(199)~~202
Proceeds from debt with original maturities of more than three months	—		1,606
Other, net	(18)		(18)
Repayments of debt with original maturities of more than three months	—		(1,295)
Net cash provided by (used for) financing activities	(547)		(588)
Other, net	(32)		(24)
Effect of Exchange Rate Changes on Cash and Equivalents	(1)		13
Net cash provided by (used for) financing activities	(1,926)		(2,246)
Effect of Exchange Rate Changes on Cash and Equivalents	39		(12)
Cash and Equivalents:
Increase (decrease) during the period	(24)		(~~118~~75)
Beginning of period	~~948~~851		~~1,065~~948
End of period	$	~~924~~827	$	~~947~~873
Supplementary Cash Flow Information:
Cash Paid During the Period for Interest	$	~~243~~59	$	~~216~~53
Cash Paid During the Period for Income Taxes, Net of Refunds	$	~~862~~205	$	~~960~~139

The Notes to Financial Statements are an integral part of this statement.

Illinois Tool Works Inc. and Subsidiaries

Notes to Financial Statements (Unaudited)

(1) Significant Accounting Policies

Financial Statements— The unaudited financial statements included herein have been prepared by Illinois Tool Works Inc. and Subsidiaries (the "Company"). In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. Interim results are not necessarily indicative of results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and notes to financial statements included in the Company's ~~2024~~2025 Annual Report on Form 10-K. Certain reclassifications of prior year data have been made to conform with current year reporting.

Inventories— Inventories are stated at the lower of cost or net realizable value and include material, labor and factory overhead. As of December 31, 2023, the last-in, first-out ("LIFO") method was used to determine the cost of inventories at certain U.S. businesses representing approximately 23% of total inventories, and the first-in, first-out ("FIFO") method, which approximates current cost, was used for all other inventories.

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 7. Inventories for additional information regarding the Company’s inventory balances.

New Accounting Pronouncements

In November ~~2023~~2024, the Financial Accounting Standards Board (the "FASB") issued authoritative guidance which expands annual and interim disclosure requirements ~~for~~related ~~reportable~~to ~~segments~~certain costs and expenses recorded in the income statement. The ~~more~~primary ~~significant~~ provisions of this new guidance ~~include~~require ~~the~~companies ~~requirement~~ to ~~disclose~~provide ~~significant~~additional ~~segment~~footnote ~~expenses~~disclosures ~~and~~disaggregating ~~certain~~income ~~disclosures~~statement ~~made~~line ~~annually~~items ~~under~~that ~~existing~~include ~~guidance~~purchases ~~are~~of ~~required~~inventory, ~~for~~employee ~~interim~~compensation, ~~periods~~depreciation, and intangible asset amortization. The ~~Company~~guidance ~~adopted~~will ~~this~~be ~~new~~effective ~~guidance~~for the Company beginning with its annual reporting for the year ~~ended~~ending December 31, ~~2024~~2027 and ~~applied~~is ~~the~~required ~~new~~to ~~disclosure~~be ~~requirements~~applied ~~retrospectively~~prospectively, with retrospective application to ~~all~~prior periods ~~presented~~allowed. The ~~new~~Company ~~guidance~~is ~~did~~currently ~~not~~assessing ~~have~~the an impact on the ~~Company’s~~guidance ~~results~~will ofhave ~~operations,~~on ~~financial~~its ~~position or cash flows for any period~~disclosures. ~~Refer to Note 12. Segment Information for additional information.~~

In December 2023, the FASB issued authoritative guidance that expands the disclosure requirements for income taxes. The new guidance will require consistent categories and greater disaggregation of information presented in the effective tax rate reconciliation as well as disaggregation of income taxes paid by jurisdiction. The guidance is effective for the Company beginning with its annual reporting for the year ending December 31, 2025 and is required to be applied prospectively, with retrospective application to prior periods allowed. The Company is currently assessing the impact the guidance will have on its disclosures.

In November 2024, the FASB issued authoritative guidance which expands annual and interim disclosure requirements related to certain costs and expenses recorded in the income statement. The primary provisions of this new guidance require companies to provide additional footnote disclosures disaggregating income statement line items that include purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The guidance will be effective for the Company beginning with its annual reporting for the year ending December 31, 2027 and is required to be applied prospectively, with retrospective application to prior periods allowed. The Company is currently assessing the impact the guidance will have on its disclosures.

(2) Acquisitions

On ~~January~~October 21, ~~2024~~2025, the Company completed the acquisition of one business in the Test & Measurement and Electronics segment for $57120 million, net of cash acquired., Onand ~~April~~subject 1,to ~~2024,~~certain ~~the~~closing ~~Company~~adjustments. ~~completed~~The ~~the~~allocation ~~acquisition~~ of ~~one~~purchase ~~business~~price infor ~~the~~this ~~Test~~acquisition &will ~~Measurement~~be ~~and~~completed ~~Electronics~~as ~~segment~~soon ~~for~~as ~~$59 million~~practicable, ~~net~~but ofno ~~cash~~later ~~acquired.~~than ~~The~~one ~~Company~~year ~~has~~from ~~completed~~ the ~~allocation~~acquisition ~~of purchase price for both of these acquisitions~~date. ~~These~~This ~~acquisitions~~acquisition ~~were~~was not material, ~~individually or in the aggregate,~~ to the Company’'s results of operations, financial position or cash flows.

(3) ~~Sale~~Operating ~~of Noncontrolling Interest in Wilsonart International Holdings LLC~~Revenue

InThe ~~the fourth quarter of 2012, the~~ Company's ~~divested~~88 adiversified ~~51%~~operating ~~majority~~divisions ~~interest~~are inorganized ~~its~~and ~~former Decorative Surfaces segment to certain funds~~ managed bybased ~~Clayton,~~on ~~Dubilier~~similar &product ~~Rice,~~offerings ~~LLC~~and ~~("CD&R").~~end ~~As a result of the transaction~~markets, ~~the~~and ~~Company~~are ~~owned~~reported ~~common~~to ~~units~~senior ~~(the~~management ~~"Common Units") of Wilsonart International Holdings LLC ("Wilsonart") initially representing approximately 49% (on an~~ as~~-converted~~ ~~basis)~~the offollowing seven segments: ~~the~~Automotive ~~total~~OEM; ~~outstanding~~Food ~~equity~~Equipment; ~~and~~Test CD&R ~~owned~~Measurement ~~cumulative~~and ~~convertible~~Electronics; ~~participating~~Welding; ~~preferred~~Polymers ~~units~~& ~~(the~~Fluids; ~~"Preferred~~Construction ~~Units")~~Products; ofand ~~Wilsonart~~Specialty ~~representing approximately 51% (on an as-converted basis) of the total outstanding equity~~Products. ~~The~~Operating ~~ownership~~revenue ~~interest~~by inproduct ~~Wilsonart~~category, ~~was~~which ~~reported~~is ~~using~~consistent ~~the~~with ~~equity method of accounting. The Company's proportionate share in~~ the ~~income (loss) of Wilsonart was reported in Other income (expense) in the Statement of Income. As the~~ Company's ~~investment~~segment inpresentation, ~~Wilsonart was structured as a partnership~~ for ~~U.S. tax purposes, U.S. taxes were recorded separately from~~ the ~~equity~~three ~~investment.~~months Inended ~~2016, the Company received a $167~~March ~~million dividend distribution from Wilsonart which exceeded the Company's equity investment balance and resulted in a $54 million pre-tax gain in 2016. As a result of the dividend distribution~~31, ~~the~~2026 ~~equity investment balance in Wilsonart was reduced to zero~~ and ~~subsequent~~2025 ~~equity investment income~~ was ~~suspended~~as ~~and no longer recognized.~~follows:

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 for $398 million. 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 which was included in Other income (expense) in the Statement of Income. Income taxes on the gain were more than offset by a discrete tax benefit of $107 million in the third quarter of 2024 related to the utilization of capital loss carryforwards upon the sale of Wilsonart. Refer to Note 5. Income Taxes for further information.


	Three Months Ended
	March 31,
In millions	2026		2025
Automotive OEM	$	820	$	786
Food Equipment	637		627
Test & Measurement and Electronics	715		652
Welding	507		472
Polymers & Fluids	452		429
Construction Products	458		443
Specialty Products	431		435
Total segments	4,020		3,844
Intersegment revenue	(4)		(5)
Total operating revenue	$	4,016	$	3,839

~~(4) Operating Revenue~~8

The Company's 86 diversified operating divisions are organized and managed based on similar product offerings and end markets, and are reported to senior management as the following seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. Operating revenue by product category, which is consistent with the Company's segment presentation, for the three and nine months ended September 30, 2025 and 2024 was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
In millions	2025		2024		2025		2024
Automotive OEM	$	830	$	772	$	2,461	$	2,403
Food Equipment	694		677		2,001		1,975
Test & Measurement and Electronics	698		697		2,036		2,071
Welding	477		462		1,428		1,404
Polymers & Fluids	441		448		1,308		1,334
Construction Products	473		479		1,389		1,471
Specialty Products	452		438		1,342		1,327
Total segments	4,065		3,973		11,965		11,985
Intersegment revenue	(6)		(7)		(14)		(19)
Total operating revenue	$	4,059	$	3,966	$	11,951	$	11,966

The following is a description of the product offerings, end markets and typical revenue transactions for each of the Company's seven segments:

Automotive OEM— This segment is a global, niche supplier to top tier OEMs, providing unique innovation to address pain points for sophisticated customers with complex problems. Businesses in this segment produce components and fasteners for automotive-related applications. This segment primarily serves the automotive original equipment manufacturers and tiers market. Products in this segment include:

•plastic and metal components, fasteners and assemblies for automobiles, light trucks and other industrial uses.

Products sold in this segment are primarily manufactured to the customer's specifications and are sold under long-term supply agreements with OEM auto manufacturers and other top tier auto parts suppliers. The Company typically recognizes revenue for products in this segment at the time of shipment. Certain products may be produced utilizing tooling that is owned by the customer that the Company developed and is reimbursed by the customer for the associated cost. In these arrangements, the Company typically retains a contractual right to use the customer-owned tooling for the purpose of fulfilling its obligations under the supply agreement. The Company records reimbursements for the cost of customer-owned tooling as a cost offset rather than operating revenue as tooling is not considered a product offering central to the Company's operations.

Food Equipment— This segment is a highly focused and branded industry leader in commercial food equipment differentiated by innovation and integrated service offerings. This segment primarily serves the food service, food retail and food institutional/restaurant markets. Products in this segment include:

•warewashing equipment;

•cooking equipment, including ovens, ranges and broilers;

•refrigeration equipment, including refrigerators, freezers and prep tables;

•food processing equipment, including slicers, mixers and scales;

•kitchen exhaust, ventilation and pollution control systems; and

•food equipment service, maintenance and repair.

Revenue for equipment sold in this segment is typically recognized at the time of product shipment. In limited circumstances involving installation of equipment and customer acceptance, the Company may recognize revenue upon completion of installation and acceptance by the customer. Annual service contracts are typically sold separate from equipment and the related revenue is recognized on a straight-line basis over the annual service period. Operating revenue for on-demand service repairs and parts is recorded upon completion and customer acceptance of the work performed.

Test & Measurement and Electronics— This segment is a branded and innovative producer of test and measurement and electronic manufacturing and maintenance, repair, and operations, or "MRO" solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. This segment primarily serves the electronics, general industrial, automotive original equipment manufacturers and tiers, energy, industrial capital goods and consumer durables markets. Products in this segment include:

•equipment, consumables, and related software for testing and measuring of materials, structures, gases and fluids;

•electronic assembly equipment;

•electronic components and component packaging;

•static control equipment and consumables used for contamination control in clean room environments; and

•pressure sensitive adhesives and components for electronics, medical, transportation and telecommunications applications.

Revenue for products sold in this segment is typically recognized at the time of shipment. In limited circumstances where significant obligations to the customer are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance, revenue recognition is deferred until such obligations have been completed. In other limited arrangements involving the sale of highly specialized systems that include a high degree of customization and installation at the customer site, revenue is recognized over time if the product does not have an alternative use and the Company has an enforceable right to payment for work performed to date. Revenue for transactions meeting these criteria is recognized over time as work is performed based on the costs incurred to date relative to the total estimated costs at completion.

109

Welding— This segment is a branded value-added equipment and specialty consumable manufacturer with innovative and leading technology. Businesses in this segment produce arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications. This segment primarily serves the general industrial market, which includes fabrication, shipbuilding and other general industrial markets, and construction, energy, MRO, industrial capital goods and automotive original equipment manufacturers and tiers markets. Products in this segment include:

•arc welding equipment; and

•metal arc welding consumables and related accessories.

Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment.

Polymers & Fluids— This segment is a branded supplier to niche markets that require value-added, differentiated products. Businesses in this segment produce engineered adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. This segment primarily serves the automotive aftermarket, general industrial and MRO markets. Products in this segment include:

•adhesives for industrial, construction and consumer purposes;

•chemical fluids which clean or add lubrication to machines;

•epoxy and resin-based coating products for industrial applications;

•hand wipes and cleaners for industrial applications;

•fluids, polymers and other supplies for auto aftermarket maintenance and appearance;

•fillers and putties for auto body repair; and

•polyester coatings and patch and repair products for the marine industry.

Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment.

Construction Products— This segment is a branded supplier of innovative engineered fastening systems and solutions. This segment primarily serves the residential construction, renovation/remodel and commercial construction markets. Products in this segment include:

•fasteners and related fastening tools for wood and metal applications;

•anchors, fasteners and related tools for concrete applications;

•metal plate truss components and related equipment and software; and

•packaged hardware, fasteners, anchors and other products for retail.

Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment.

Specialty Products— This segment is focused on diversified niche market opportunities with substantial patent protection producing beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. This segment primarily serves the food and beverage, consumer durables, airlines, general industrial, ~~airlines,~~ industrial capital goods and printing and publishing markets. Products in this segment include:

•conveyor systems and line automation for the food and beverage industries;

•plastic consumables that multi-pack cans and bottles and related equipment;

•foil, film and related equipment used to decorate consumer products;

•product coding and marking equipment and related consumables;

•plastic and metal closures and components for appliances;

•airport ground support equipment; and

•components for medical devices.

Products in this segment are primarily manufactured to meet anticipated customer demand. The Company typically recognizes revenue for these products at the time of product shipment. In limited circumstances where significant obligations to the customer are unfulfilled at the time of shipment, typically involving installation of equipment and customer acceptance, revenue is recognized when such obligations have been completed.

(4) Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted in the United States, which extended and modified certain provisions of the 2017 Tax Cuts and Jobs Act (the "TCJA"). The provisions of the OBBBA did not have a material impact on the Company's operating results, financial position or cash flows for the three months ended March 31, 2026.

The Company's effective tax rate for the three months ended March 31, 2026 and 2025 was 20.6% and 21.7%, respectively. The effective tax rate for the three months ended March 31, 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 three months ended March 31, 2025 included a discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards. The effective tax rates also included discrete tax benefits related to excess tax benefits from stock-based compensation of $4 million for both the three months ended March 31, 2026 and 2025.

(5) Net Income Per Share

Net income per basic share is computed by dividing net income by the weighted-average number of shares outstanding for the period. Net income per diluted share is computed by dividing net income by the weighted-average number of shares assuming dilution for stock options and restricted stock units. Dilutive shares reflect the potential additional shares that would be outstanding if the dilutive stock options outstanding were exercised and the unvested restricted stock units vested during the period. The computation of net income per share for the three months ended March 31, 2026 and 2025 is as follows:


	Three Months Ended
	March 31,
In millions except per share amounts	2026		2025
Net Income	$	768	$	700
Net income per share—Basic:
Weighted-average common shares	288.3		293.6
Net income per share—Basic	$	2.66	$	2.39
Net income per share—Diluted:
Weighted-average common shares	288.3		293.6
Effect of dilutive stock options and restricted stock units	0.8		0.9
Weighted-average common shares assuming dilution	289.1		294.5
Net income per share—Diluted	$	2.66	$	2.38

Options that were considered antidilutive were not included in the computation of diluted net income per share. There were 0.5 million and 0.2 million antidilutive options outstanding for the three months ended March 31, 2026 and 2025, respectively.

(6) Inventories

Inventories as of March 31, 2026 and December 31, 2025 were as follows:


In millions	March 31, 2026		December 31, 2025
Raw material	$	638	$	640
Work-in-process	210		191
Finished goods	878		828
Total inventories	$	1,726	$	1,659

(57) ~~Income~~Pension ~~Taxes~~and Other Postretirement Benefits

~~The~~Pension ~~Company's effective tax rate for the three months ended September 30, 2025~~ and ~~2024~~other ~~was~~postretirement 21.8% and 14.9%, respectively, and 22.7% and 20.4% for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rates for the three and nine months ended September 30, 2025 benefited from a discrete tax benefit ofcosts ~~$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. The effective tax rate for the nine months ended September 30, 2025 also 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 three ~~and nine~~ months ended ~~September 30, 2024 benefited from discrete income tax benefits in the third quarter of 2024 of $107~~March ~~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~~31, ~~partially~~2026 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 for more information regarding the Wilsonart transaction. The effective tax rates for 2025 and ~~2024 also included discrete tax benefits related to excess tax benefits from stock-based compensation of $2 million and $1 million for the three months ended September 30,~~ 2025 ~~and~~were ~~2024,~~as ~~respectively, and $7 million and $11 million for the nine months ended September 30, 2025 and 2024, respectively.~~follows:

The Company and its subsidiaries file tax returns in the U.S. and various state, local and foreign jurisdictions. These tax returns are routinely audited by the tax authorities in these jurisdictions, including the Internal Revenue Service, His Majesty's Revenue and Customs, German Fiscal Authority, French Fiscal Authority, and Australian Tax Office, and a number of these audits are currently ongoing, which may increase the amount of the unrecognized tax benefits in future periods. The Company believes it is reasonably possible that within the next twelve months the amount of the Company's unrecognized tax benefits may be decreased by approximately $67 million related predominantly to the potential resolution of federal, state and foreign examinations. The Company has recorded its best estimate of the potential exposure for these issues.


	Three Months Ended
	March 31,
	Pension				Other Postretirement Benefits
In millions	2026		2025		2026		2025
Components of net periodic benefit cost:
Service cost	$	7	$	8	$	1	$	1
Interest cost	21		23		5		6
Expected return on plan assets	(32)		(32)		(7)		(7)
Amortization of actuarial loss (gain)	4		1		(2)		(2)


Total net periodic benefit cost (income)	$	—	$	—	$	(3)	$	(2)

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.

(6) Net Income Per Share

Net income per basic share is computed by dividing net income by the weighted-average number of shares outstanding for the period. Net income per diluted share is computed by dividing net income by the weighted-average number of shares assuming dilution for stock options and restricted stock units. Dilutive shares reflect the potential additional shares that would be outstanding if the dilutive stock options outstanding were exercised and the unvested restricted stock units vested during the period. The computation of net income per share for the three and nine months ended September 30, 2025 and 2024 was as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
In millions except per share amounts	2025		2024		2025		2024
Net Income	$	821	$	1,160	$	2,276	$	2,738
Net income per share—Basic:
Weighted-average common shares	290.8		296.1		292.2		297.6
Net income per share—Basic	$	2.82	$	3.92	$	7.79	$	9.20
Net income per share—Diluted:
Weighted-average common shares	290.8		296.1		292.2		297.6
Effect of dilutive stock options and restricted stock units	0.9		0.9		0.8		0.9
Weighted-average common shares assuming dilution	291.7		297.0		293.0		298.5
Net income per share—Diluted	$	2.81	$	3.91	$	7.77	$	9.17

Options that were considered antidilutive were not included in the computation of diluted net income per share. There were 0.4 million and 0.2 million antidilutive options outstanding for the three months ended September 30, 2025 and 2024, respectively, and 0.4 million and 0.2 million antidilutive options outstanding for the nine months ended September 30, 2025 and 2024, respectively.

(7) Inventories

Inventories as of September 30, 2025 and December 31, 2024 were as follows:

In millions	September 30, 2025		December 31, 2024
Raw material	$	647	$	635
Work-in-process	212		193
Finished goods	866		777
Total inventories	$	1,725	$	1,605

(8) Goodwill and Intangible Assets

The Company performed its annual impairment assessment of goodwill and indefinite-lived intangible assets in the third quarters of 2025 and 2024. The assessments resulted in no impairment charges in either 2025 or 2024.

(9) Pension and Other Postretirement Benefits

Pension and other postretirement benefit costs for the three and nine months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	Pension				Other Postretirement Benefits				Pension				Other Postretirement Benefits
In millions	2025		2024		2025		2024		2025		2024		2025		2024
Components of net periodic benefit cost:
Service cost	$	8	$	9	$	1	$	1	$	24	$	27	$	3	$	3
Interest cost	23		23		6		6		69		69		18		18
Expected return on plan assets	(33)		(34)		(6)		(5)		(97)		(100)		(19)		(16)
Amortization of actuarial loss (gain)	1		1		(3)		(1)		3		5		(7)		(2)
Amortization of prior service cost	1		1		—		—		1		1		—		—
Settlements	—		—		—		—		1		—		—		—
Total net periodic benefit cost (income)	$	—	$	—	$	(2)	$	1	$	1	$	2	$	(5)	$	3

The service cost component of net periodic benefit cost is presented within Cost of revenue and Selling, administrative, and research and development expenses in the Statement of Income while the other components of net periodic benefit cost are presented within Other income (expense).

The Company expects to contribute approximately $2224 million to its pension plans and $31 million to its other postretirement benefit plans in ~~2025~~2026. As of ~~September~~March 3031, ~~2025~~2026, contributions of $2014 million to pension plans and $216 million to other postretirement benefit plans have been made.

(108) Debt

Total debt as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 was as follows:

In millions	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Short-term debt	$	12,~~267~~545	$	12,~~555~~286
Long-term debt	76,~~675~~603		6,~~308~~683
Total debt	$	89,~~942~~148	$	78,~~863~~969

13Short-term debt included commercial paper of $1.5 billion and $1.3 billion as of March 31, 2026 and December 31, 2025, respectively. The weighted-average interest rate on commercial paper as of March 31, 2026 and December 31, 2025 was 3.81% and 3.84%, respectively. Short-term debt also included $999 million as of March 31, 2026 and December 31, 2025 related to the 2.65% notes due November 15, 2026, which were reclassified from Long-term debt to Short-term debt in the fourth quarter of 2025.

~~Short~~On February 24, 2025, the Company entered into an amendment to the Euro-~~term~~denominated ~~debt~~credit ~~included~~agreement ~~commercial~~entered ~~paper~~into ofon ~~$1.3~~May ~~billion~~5, ~~and~~2023 ~~$778 million~~(the as"Euro ofCredit ~~September~~ Agreement") to extend the termination date from April 30, 2025 ~~and~~to ~~December 31~~February 28, ~~2024~~2027, ~~respectively~~with an option to further extend the termination date to September 15, 2027. The ~~weighted-average~~amendment also decreased the interest rate onspread ~~commercial~~applicable ~~paper~~to asthe loans from 0.75% to 0.70% and removed the option for a one-month interest period. As of ~~September~~March 3031, ~~2025~~2026, ~~and~~the ~~December~~Company had $866 31million outstanding under the Euro Credit Agreement with an interest rate of 2.71%, ~~2024~~which was 4included in Long-term debt as the Company intends to exercise its option to extend the termination date.~~17%~~ ~~and~~As 4of December 31, 2025, the Company had $881 million outstanding under the Euro Credit Agreement with an interest rate of 2.5677%, ~~respectively~~which was included in Long-term debt.

~~As of December 31, 2024, Short-term debt also included $777 million related to the Euro-denominated credit agreement entered into on May 5, 2023 (the "Euro Credit Agreement").~~ On February 2420, ~~2025~~2026, the Company entered into ana ~~amendment~~$3.0 tobillion, ~~the~~five-year ~~Euro~~revolving ~~Credit~~credit ~~Agreement~~facility towith ~~extend~~a ~~the~~ termination date ~~from~~of ~~April 30, 2025 to~~ February 2820, ~~2027~~2031, ~~with~~which anis ~~option~~available to ~~further~~provide ~~extend~~additional ~~the~~liquidity, ~~termination~~including ~~date~~ to ~~September~~support ~~15,~~the ~~2027.~~potential ~~The~~issuances ~~amendment~~of ~~also~~commercial ~~decreased~~paper. ~~the~~This ~~interest~~agreement ~~rate~~replaced ~~spread applicable to~~ the ~~loans~~existing ~~from 0~~$3.~~75% to~~ 0~~.70%~~ billion, ~~and~~five-year ~~removed~~revolving ~~the~~credit ~~option~~facility ~~for~~with a ~~one-month~~termination ~~interest~~date ~~period. As~~ of ~~September 30,~~October ~~2025~~21, ~~the~~2027. ~~Company~~No ~~had~~amounts ~~$880 million~~were outstanding under the ~~Euro~~revolving ~~Credit~~credit ~~Agreement~~facility ~~with~~as ~~an interest rate~~ of ~~2.73%~~March 31, ~~which was included in Long-term debt~~2026.

On May 17, 2024, the Company issued €650 million of 3.25% Euro notes due May 17, 2028 at 99.525% of face value and €850 million of 3.375% Euro notes due May 17, 2032 at 99.072% of face value. Proceeds from the issuance were used for general corporate purposes, including the repayment of a portion of the indebtedness under the commercial paper program and repayment of €550 million of the term loans under the Euro Credit Agreement.12

The ~~Company~~approximate ~~also~~fair ~~has~~value aand ~~$3.0~~related ~~billion~~carrying ~~revolving~~value ~~credit facility with a termination date~~ of ~~October~~the ~~21,~~Company's ~~2027,~~total ~~which~~long-term ~~is available to provide additional liquidity~~debt, including tocurrent ~~support~~maturities ~~the potential issuances~~ of ~~commercial~~long-term ~~paper.~~debt Nopresented ~~amounts~~as ~~were~~short-term ~~outstanding~~debt, ~~under the revolving credit facility~~ as of ~~September~~March 3031, ~~2025~~2026 orand December 31, ~~2024.~~2025 were as follows:

The approximate fair value and related carrying value of the Company's total long-term debt, including current maturities of long-term debt presented as short-term debt, as of September 30, 2025 and December 31, 2024 were as follows:


In millions	March 31, 2026		December 31, 2025
Fair value	$	7,290	$	7,451
Carrying value	7,602		7,682

In millions	September 30, 2025		December 31, 2024
Fair value	$	7,465	$	6,806
Carrying value	7,675		7,085

The approximate fair values of the Company's long-term debt, including current maturities, were based on a valuation model using Level 2 observable inputs which included market rates for comparable instruments for the respective periods.

(119) Accumulated Other Comprehensive Income (Loss)

The following table summarizes changes in Accumulated other comprehensive income (loss) for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025:

	Three Months Ended				~~Nine Months Ended~~
	September 30,				September 30,
	March 31,
In millions	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Beginning balance	$	(1,~~868~~827)	$	(1,~~925~~877)	$	~~(1,877)~~	$	~~(1,834)~~
Foreign currency translation adjustments during the period	~~(2)~~43		(647)		~~(138)~~		~~(66)~~
Foreign currency translation adjustments reclassified to income	—		30		—		30
Income taxes	(19)		47
Income taxes	(6)		49		140		16
Total foreign currency translation adjustments, net of tax	24		—
Total foreign currency translation adjustments, net of tax	(8)		73		2		(20)
Pension and other postretirement benefit adjustments reclassified to income	2		(1)
Pension and other postretirement benefit adjustments reclassified to income	(1)		3		(2)		6
Income taxes	(1)		—
Income taxes	1		—		1		(1)
Total pension and other postretirement benefit adjustments, net of tax	1		(1)
Total pension and other postretirement benefit adjustments, net of tax	—		3		(1)		5
Ending balance	$	(1,802)	$	(1,878)
Ending balance	$	(1,876)	$	(1,849)	$	(1,876)	$	(1,849)

14Pension and other postretirement benefit adjustments reclassified to income related primarily to the amortization of actuarial gains and losses. Refer to Note 7. Pension and Other Postretirement Benefits for additional information.

~~Foreign~~The ~~currency~~outstanding ~~translation~~balances ~~adjustments~~of ~~reclassified~~the toEuro ~~income~~notes ~~related~~issued ~~primarily~~in toMay 2014, May 2015, June 2019 and May 2024, and the ~~sale~~Euro term loan under the Euro Credit Agreement are designated as hedges of a portion of the ~~noncontrolling~~Company’s ~~interest~~net investment in ~~Wilsonart~~Euro-denominated inforeign operations to reduce foreign currency risk associated with the ~~third~~investment ~~quarter~~in these operations. Changes in the value of ~~2024~~this debt resulting from fluctuations in the Euro to U.S. ~~Pension~~Dollar ~~and~~exchange ~~other~~rate ~~postretirement~~have ~~benefit~~been recorded as foreign currency translation adjustments ~~reclassified~~within toAccumulated other comprehensive income ~~related~~(loss). ~~primarily~~The amount of pre-tax gain (loss) related to ~~the~~this ~~amortization~~debt ofrecorded ~~actuarial~~in ~~gains~~Other ~~and~~comprehensive ~~losses~~income (loss) was a gain of $82 million and ~~the~~a ~~sale~~loss of $196 million for the ~~noncontrolling~~three ~~interest~~months inended ~~Wilsonart.~~March 31, ~~Refer~~2026 toand ~~Note~~2025, 3respectively. ~~Sale~~The carrying value of ~~Noncontrolling~~the ~~Interest~~outstanding inbalance ~~Wilsonart~~of ~~International~~Euro-denominated ~~Holdings~~debt ~~LLC~~that was designated as a net investment hedge as of March 31, 2026 and ~~Note~~December 31, 2025 was $4.9 billion and $5.0 billion, ~~Pension~~respectively. ~~and~~Refer ~~Other~~to ~~Postretirement~~Note ~~Benefits~~8. Debt for additional information regarding the Company’s outstanding Euro debt.

~~The~~As ~~outstanding balances~~ of ~~the Euro notes issued in May 2014~~March 31, ~~May~~2026 ~~2015, June 2019~~ and ~~May 2024~~2025, ~~and~~ the ~~term~~ending ~~loan~~balance ~~under the Euro Credit Agreement are designated as hedges~~ of a portion of the Company’s net investment in Euro-denominated foreign operations to reduce foreign currency risk associated with the investment in these operations. Changes in the value of this debt resulting from fluctuations in the Euro to U.S. Dollar exchange rate have been recorded as foreign currency translation adjustments within Accumulated other comprehensive income (loss). ~~The~~consisted ~~amount~~ of ~~pre~~after-tax ~~gain~~cumulative ~~(loss)~~translation ~~related~~adjustment tolosses ~~this debt recorded in Other comprehensive income (loss) was a gain~~ of $~~23 million and a loss of $204 million for the three months ended September~~1.6 ~~30,~~billion ~~2025~~in ~~and~~both ~~2024~~periods, ~~respectively,~~ and aafter-tax ~~loss~~unrecognized ofpension ~~$584 million~~ and ~~$65~~other ~~million~~postretirement ~~for~~benefit ~~the~~costs ~~nine months ended September 30, 2025 and 2024, respectively. The carrying value~~ of ~~the outstanding balance of Euro-denominated debt that was designated as a net investment hedge as of September 30, 2025 and December 31, 2024 was~~ $~~5.0~~236 ~~billion~~million and $~~4.4 billion~~267 million, respectively. ~~Refer to Note 10. Debt for additional information regarding the Company’s outstanding Euro debt.~~

As of September 30, 2025 and 2024, the ending balance of Accumulated other comprehensive income (loss) consisted of after-tax cumulative translation adjustment losses of $1.6 billion and $1.5 billion, respectively, and after-tax unrecognized pension and other postretirement benefit costs of $267 million and $322 million, respectively.13

(1210) Segment Information

The Company's operations are organized and managed based on similar product offerings and end markets, and are reported to senior management as the following seven segments: Automotive OEM; Food Equipment; Test & Measurement and Electronics; Welding; Polymers & Fluids; Construction Products; and Specialty Products. The following is a description of the Company's seven segments:

Food Equipment— This segment is a highly focused and branded industry leader in commercial food equipment differentiated by innovation and integrated service offerings.

Test & Measurement and Electronics— This segment is a branded and innovative producer of test and measurement and electronic manufacturing and MRO solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics.

Construction Products— This segment is a branded supplier of innovative engineered fastening systems and solutions.

The Company’'s chief operating decision maker (“"CODM”") is the President & Chief Executive Officer. The CODM primarily uses operating revenue, operating income and related operating margins in assessing the current and expected long-term performance of the Company’'s segments, including the application of the Company’'s enterprise strategies which focus on profitable growth and continuous improvement to margins and returns through the application of the Company’'s business model. Operating income and margins are also used by the CODM when evaluating segment investments in capital projects and restructuring initiatives. The CODM regularly reviews summarized financial information related to segment operating revenue, variable margins, overhead expenses, operating income and operating margins as compared to forecasted results.

The CODM regularly reviews summarized financial information related to segment operating revenue, variable margins, overhead expenses, operating income and operating margins as compared to forecasted results.

Intersegment sales transactions are accounted for at prices consistent with sales to third parties and are not considered material. Segments are allocated a fixed overhead charge for general corporate administrative expenses based on a percentage of the segment's operating revenue. Expenses not allocated 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.

1614

Segment operating revenue, significant expenses and operating income for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 were as follows:

Three Months Ended

~~Nine Months Ended~~

September 30,

March 31,

In millions

~~2025~~2026

~~2024~~2025

~~2025~~

~~2024~~

Operating revenue:

Automotive OEM

~~830~~820

~~772~~786

~~2,461~~

~~2,403~~

Food Equipment

~~694~~637

~~677~~627

~~2,001~~

~~1,975~~

Test & Measurement and Electronics

~~698~~715

~~697~~652

~~2,036~~

~~2,071~~

Welding

~~477~~507

~~462~~472

~~1,428~~

~~1,404~~

Polymers & Fluids

~~441~~452

~~448~~429

~~1,308~~

~~1,334~~

Construction Products

~~473~~458

~~479~~443

~~1,389~~

~~1,471~~

Specialty Products

~~452~~431

~~438~~435

~~1,342~~

~~1,327~~

Total segments

4,~~065~~020

3,~~973~~844

~~11,965~~

~~11,985~~

Intersegment revenue

(64)

(75)

~~(14)~~

~~(19)~~

Operating Revenue

4,~~059~~016

3,~~966~~839

~~11,951~~

~~11,966~~

Variable cost of revenue:

Automotive OEM

~~450~~442

~~431~~435

~~1,344~~

~~1,343~~

Food Equipment

~~317~~298

~~310~~284

~~914~~

~~912~~

Test & Measurement and Electronics

~~297~~309

~~291~~282

~~881~~

~~885~~

Welding

~~211~~227

~~210~~214

~~640~~

~~635~~

Polymers & Fluids

~~208~~210

~~219~~205

~~621~~

~~641~~

Construction Products

~~210~~206

~~221~~200

~~620~~

~~686~~

Specialty Products

~~205~~195

~~202~~201

~~613~~

~~618~~

Total segments

1,~~898~~887

1,~~884~~821

~~5,633~~

~~5,720~~

Overhead expenses:

Automotive OEM

~~198~~205

~~191~~200

~~604~~

~~591~~

Food Equipment

~~175~~182

~~174~~177

~~530~~

~~526~~

Test & Measurement and Electronics

~~224~~242

~~227~~231

~~682~~

~~685~~

Welding

~~110~~117

~~103~~105

~~320~~

~~311~~

Polymers & Fluids

~~107~~116

~~104~~110

~~326~~

~~329~~

Construction Products

~~114~~117

113

~~345~~

~~349~~

Specialty Products

101

~~100~~99

~~300~~

~~299~~

Total segments

1,~~029~~080

1,~~012~~035

~~3,107~~

~~3,090~~

Operating income:

Automotive OEM

~~182~~173

~~150~~151

~~513~~

~~469~~

Food Equipment

~~202~~157

~~193~~166

~~557~~

~~537~~

Test & Measurement and Electronics

~~177~~164

~~179~~139

~~473~~

~~501~~

Welding

~~156~~163

~~149~~153

~~468~~

~~458~~

Polymers & Fluids

126

~~125~~114

~~361~~

~~364~~

Construction Products

~~149~~135

~~145~~130

~~424~~

~~436~~

Specialty Products

~~146~~135

~~136~~135

~~429~~

~~410~~

Total segments

1,~~138~~053

~~1,077~~988

~~3,225~~

~~3,175~~

Unallocated

(2633)

(2537)

~~(94)~~

Operating Income

1,~~112~~020

~~1,052~~951

~~3,131~~

~~3,233~~

Interest expense

(7573)

(6968)

~~(217)~~

~~(215)~~

Other income (expense)

1220

~~379~~12

~~421~~

Income Before Taxes

~~1,049~~967

~~1,362~~895

~~2,942~~

~~3,439~~

Unallocated for the nine months ended September 30, 2025 included higher health and welfare expenses as compared to the prior year. Unallocated for the nine months ended September 30, 2024 included the favorable pre-tax cumulative effect of the LIFO accounting method change of $117 million. Refer to Note 1. Significant Accounting Policies for additional information regarding this change in accounting method.15

17Segment depreciation and amortization and impairment of intangible assets for the three months ended March 31, 2026 and 2025 was as follows:

Segment depreciation and amortization and impairment of intangible assets for the three and nine months ended September 30, 2025 and 2024 was as follows:


	Three Months Ended
	March 31,
In millions	2026		2025
Automotive OEM	$	35	$	32
Food Equipment	10		10
Test & Measurement and Electronics	18		18
Welding	9		8
Polymers & Fluids	9		10
Construction Products	8		8
Specialty Products	10		9
Total	$	99	$	95

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
In millions	2025		2024		2025		2024
Automotive OEM	$	35	$	34	$	101	$	97
Food Equipment	11		12		31		34
Test & Measurement and Electronics	17		21		53		62
Welding	9		9		26		24
Polymers & Fluids	10		10		31		31
Construction Products	8		9		24		24
Specialty Products	10		9		28		28
Total	$	100	$	104	$	294	$	300

Asset and capital expenditure information by segment is not regularly provided to or reviewed by the CODM and is therefore not disclosed.

1816

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

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~~2025, the Company had 8688 divisions with approximately 4443,000 people in 5149 countries.

Due to the large number of diverse businesses and the Company's decentralized operating structure, the Company does not require its businesses to provide detailed information on operating results. Instead, the Company's corporate management collects data on several key measurements: operating revenue, operating income, operating margin, variable cost of revenue, overhead expenses, number of months on hand in inventory, days sales outstanding in accounts receivable, past due receivables and return on invested capital. These key measures are monitored by management and significant changes in operating results versus current trends in end markets and variances from forecasts are discussed with operating unit management.

THE ITW BUSINESS MODEL

The powerful and highly differentiated ITW Business Model is the Company's core source of value creation. It isserves as the Company's primary competitive advantage and defines ~~how~~the framework through which ITW ~~creates~~generates sustainable value for its shareholders. The ITW Business Model is comprised of three unique elements:

•~~ITW's~~ 80/20 Front-to-Back ~~process~~defines ishow the ~~operating~~Company ~~system~~operates. ~~that~~It is ~~applied in every ITW business. Initially introduced as~~ a ~~manufacturing~~unique ~~efficiency~~set ~~tool~~of inproprietary ~~the~~tools ~~1980s, ITW has continually refined, improved~~ and ~~expanded~~methodologies ~~80/20 into a proprietary, holistic business management process~~ that ~~generates~~ITW ~~significant~~divisions ~~value~~utilize ~~for~~to ~~the~~structure ~~Company~~ and ~~its~~operate ~~customers.~~their ~~Through~~businesses ~~the~~to ~~application~~(a) ofmaximize ~~data~~the ~~driven~~performance, ~~insights generated by 80/20 practice~~execution, ~~ITW~~and ~~focuses~~value-add onprovided ~~its~~to their largest and ~~best~~most ~~opportunities~~profitable customers (the "80"), and ~~eliminates~~(b) ~~cost~~minimize the costs, complexity, and distractions associated with ~~the~~serving less profitable ~~opportunities~~accounts (the "20"). Through the application of the 80/20 ~~enables~~Front-to-Back process, ITW ~~businesses~~divisions todeliver ~~consistently achieve world~~best-in-class ~~operational~~customer-facing ~~excellence~~execution, inhigh-quality ~~product~~organic ~~availability~~growth, ~~quality,~~ and ~~innovation,~~superior ~~while~~profitability ~~generating~~and ~~superior~~return ~~financial~~on capital performance;.

•Customer-~~back~~Back Innovation ~~has~~("CBI") ~~fueled~~drives ~~decades~~the ~~of profitable growth at ITW. The~~ Company's ~~unique innovation~~ approach isto ~~built~~innovation onand ~~insight gathered from the 80/20 Front-to-Back process~~development. ~~Working~~ITW innovates from the customer back, ~~ITW~~rather ~~businesses~~than ~~position~~from ~~themselves~~a ascentralized ~~the~~research ~~go-to~~and ~~problem~~development ~~solver~~center ~~for their "80" customers~~out. ITW's ~~innovation~~divisions ~~efforts~~partner ~~are focused on understanding customer needs, particularly those in "80" markets~~ with ~~solid~~their ~~long-term~~key ~~growth~~customers ~~fundamentals,~~to ~~and~~create ~~creating~~ unique solutions tothat ~~address~~solve ~~those~~difficult ~~needs.~~technical ~~These~~challenges ~~customer insights~~ and ~~learnings~~improve ~~drive~~business ~~innovation~~performance. atThis ~~ITW~~disciplined, ~~and~~repeatable ~~have~~process ~~contributed~~directs toinnovation aefforts ~~portfolio~~toward ofhigh-growth ~~approximately~~markets ~~20,900~~with ~~granted~~solid ~~and~~long-term ~~pending patents;~~fundamentals.

•ITW's Decentralized, Entrepreneurial Culture ~~enables~~is ~~ITW~~the ~~businesses~~key to bethe ~~fast,~~Company's ~~focused, and responsive~~execution. ~~ITW~~Divisions ~~businesses~~are ~~have~~clear ~~significant~~on ~~flexibility within~~ the ~~framework~~expectations of the ITW Business Model, tostrategy, ~~customize~~and ~~their~~values. ~~approach~~Within inthis ~~order~~framework, tobusiness ~~best~~teams ~~serve~~are ~~their~~empowered ~~specific~~to ~~customers'~~make ~~needs.~~decisions ~~ITW~~and ~~colleagues~~customize ~~recognize~~ their ~~unique~~approach ~~responsibilities~~ to ~~execute~~maximize the ~~Company's~~relevance ~~strategy~~ and ~~values.~~impact Asof athe ~~result,~~ITW ~~the~~Business ~~Company~~Model ~~maintains~~for atheir ~~focused~~specific customers and ~~simple~~end ~~organizational~~markets. ~~structure~~This ~~that,~~"flexibility ~~combined~~within ~~with~~the ~~outstanding~~framework" ~~execution,~~culture ~~delivers~~encourages ~~best-in-class~~an ~~services~~ownership mindset and ~~solutions~~accountability, ~~adapted~~enabling tothe ~~each~~Company ~~business'~~to ~~customers~~consistently ~~and~~deliver ~~end~~differentiated ~~markets~~results.

ENTERPRISE STRATEGY: ~~2012~~LEVERAGING -THE ~~2023~~ITW BUSINESS MODEL TO ITS FULL POTENTIAL

InSince ~~late~~the initiation of the Enterprise Strategy in 2012, ~~ITW~~the ~~began~~entire ~~its~~organization ~~strategic~~has ~~framework~~focused ~~transitioning~~on utilizing the ~~Company~~ITW Business Model to ~~fully~~its ~~leverage~~full ~~the~~potential ~~unique~~to ~~and~~deliver ~~powerful~~solid ~~set~~growth ofwith ~~capabilities~~best-in-class margins and ~~operating~~returns. ~~practices~~To ofexecute the ~~ITW~~strategy, ~~Business~~the ~~Model. The~~ Company undertook a complete review of its performance, focusing on its businesses ~~delivering~~that delivered consistent above-market growth with best-in-class margins and returns, and ~~developing~~developed a ~~strategy~~framework to replicate that performance across its operations. ITW determined that ~~solid~~high-quality ~~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.

Key initiatives in the Company's ~~enterprise~~Enterprise ~~strategy~~Strategy included portfolio management, business structure simplification, strategic sourcing and the diligent re-application of ITW's proprietary 80/20 Front-to-Back process.

•As part of the Portfolio Management initiative, ITW exited businesses that were operating in commoditized market spaces and prioritized sustainable differentiation as a must-have requirement for all ITW businesses. This process included both divesting entire businesses and exiting commoditized product lines and customers inside otherwise highly differentiated ITW divisions.

1917

~~included~~•Business ~~both~~Structure ~~divesting~~Simplification ~~entire~~was ~~businesses~~implemented to simplify and ~~exiting~~scale ~~commoditized~~up ~~product~~ITW's ~~lines~~operating structure to support increased engineering, marketing, and ~~customers~~sales ~~inside~~resources, ~~otherwise~~and ~~highly~~improve ~~differentiated~~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.

•~~Business~~The ~~Structure~~Strategic ~~Simplification~~Sourcing ~~was~~initiative ~~implemented~~established tosourcing ~~simplify~~as ~~and~~a ~~scale~~core upstrategic ~~ITW's~~and ~~operating~~operational ~~structure~~capability toat ~~support increased engineering~~ITW, ~~marketing,~~delivering ~~and~~an ~~sales~~average ~~resources,~~of ~~and~~one ~~improve~~percent ~~global~~reduction ~~reach~~in ~~and~~spend ~~competitiveness,~~each ~~all~~year ofsince ~~which~~2013 ~~were~~and ~~critical~~continues to ~~driving~~be ~~accelerated~~a ~~organic~~key ~~growth.~~contributor ~~ITW~~to ~~now~~the ~~has~~Company's 86ongoing ~~scaled-up~~Enterprise ~~divisions with significantly enhanced focus on growth investments, core customers and products, and customer-back innovation~~Strategy.

•The Strategic Sourcing initiative established sourcing as a core strategic and operational capability at ITW, delivering an average of one percent reduction in spend each year since 2013 and continues to be a key contributor to the Company's ongoing enterprise strategy.

•With the initial portfolio realignment and scale-up work largely completed, the Company shifted its focus to preparing for and accelerating organic growth, reapplying the 80/20 Front-to-Back process to optimize its scaled-up divisions for growth, first, to build a foundation of operational excellence, and second, to identify the best opportunities to drive organic growth.

Since implementing the Company's ~~enterprise~~Enterprise ~~strategy~~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.~~

~~OUR~~ NEXT PHASE: 2024 - 2030

In the Next Phase of the Company’'s ~~evolution~~Enterprise Strategy, the ITW Business Model ~~and~~remains the ~~Enterprise~~Company's ~~Strategy~~core ~~framework~~competitive ~~will~~advantage beand asa ~~formidable~~powerful ofperformance differentiator, uniquely positioning the Company to navigate a ~~competitive~~global ~~advantage~~operating environment characterized by increasing volatility and ~~performance~~a ~~differentiator~~rapid aspace itof ~~has~~change. ~~been~~The ~~over~~80/20 Front-To-Back process provides the ~~last~~strategic ~~decade,~~clarity ifto ~~not~~deliver ~~more~~high-quality ~~so.~~organic ~~Volatility~~growth and superior customer service, ~~risk~~profitability and ~~the~~returns ~~pace~~on ofcapital. ~~change~~Through inCustomer-Back Innovation, the ~~global~~Company ~~operating~~innovates ~~environment~~technical ~~will~~solutions ~~continue~~ to ~~increase,~~solve critical customer challenges with higher effectiveness and alower risk. The Company's decentralized entrepreneurial culture allows ~~the~~it ~~Company~~ to be a "fast adaptor," –capable toof ~~read,~~reading ~~react,~~and ~~respond~~reacting ~~and~~to ~~evolve~~market shifts with agility. ~~The~~Furthermore, the Company’'s ability to ~~consistently~~ execute and invest consistently through ~~the~~all ~~ups~~phases ~~and downs~~ of the business cycle ishas ~~now~~become a defining ~~competitive advantage~~strength.

~~Throughout~~As the ~~Next Phase, the~~ Company's ~~focus~~advances isthrough tothis ~~build~~Next ~~organic~~Phase, ~~growth~~it ~~into~~is acontinuing ~~core~~to ~~ITW~~improve ~~strength on par with~~ the ~~Company’s~~quality ~~world-class~~of ~~financial~~practice ~~performance~~in ~~and operational capabilities. Throughout this phase, the Company will sustain~~ its ~~foundational~~proprietary ~~strengths~~business ~~built~~model ~~over~~while ~~the~~pivoting ~~past~~decisively ~~decade,~~to ~~including~~build ~~the high~~above-~~quality~~market ~~ITW~~organic ~~Business~~growth, ~~Model~~fueled ~~practice.~~by Customer-~~back~~Back Innovation ~~("CBI")~~execution, isinto ~~the~~a ~~most~~core ~~impactful~~ITW ~~driver~~strength. toAchieving ~~achieve~~ high-quality organic growth ~~through~~of ~~the~~four ~~cycle~~percent byor ~~establishing~~more ~~trusted~~through ~~problem~~the ~~solver~~cycle ~~relationships~~is ~~with~~the ~~key customers to effectively invent solutions that address customers~~Company's ~~most~~highest ~~critical~~priority ~~pain~~in ~~points or tackle~~ the ~~biggest~~Next ~~growth opportunities~~Phase. CBI successes, coupled with underlying market growth and share gains, are how the Company intends to achieve its high-quality organic growth.

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.

Portfolio Discipline

The Company only operates in industries where it can generate significant, long-term competitive advantage from the ITW Business Model. ITW businesses have the right "raw material" in terms of market and business attributes that best fit the ITW Business Model and have significant potential to drive above-market organic growth over the long-term.

The Company focuses on high-quality businesses, ensuring it operates in markets with positive long-term macro fundamentals and with customers that have critical needs and value ITW's differentiated products, services and solutions. ITW's portfolio operates in highly diverse end markets and geographies which makes the Company more resilient in the face of uncertain or volatile market environments.

The Company routinely evaluates its portfolio to ensure it delivers sustainable differentiation and drives consistent long-term performance. This includes both implementing portfolio refinements and assessing selective high-quality acquisitions to supplement ITW's long-term growth potential.

2018

TERMS USED BY ITW

Management uses the following terms to describe the financial results of operations of the Company:

•Organic business - acquired businesses that have been included in the Company's results of operations for more than 12 months on a constant currency basis.

•Operating leverage - the estimated effect of the organic revenue volume changes on organic operating income, assuming variable margins remain the same as the prior period.

•Price/cost - represents the estimated net impact of increases or decreases in the cost of materials used in the Company's products versus changes in the selling price to the Company's customers.

•Product line simplification ("PLS") - focuses businesses on eliminating the complexity and overhead costs associated with smaller product lines and customers, and focuses businesses on supporting and growing their largest customers and product lines. In the short-term, PLS may result in a decrease in revenue and overhead costs while improving operating margin. In the long-term, PLS is expected to result in growth in revenue, profitability, and returns.

Unless otherwise stated, the changes in financial results in the consolidated results of operations and the results of operations by segment represent the current year period versus the comparable period in the prior year. The following discussion of operating results should be read in conjunction with Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's ~~2024~~2025 Annual Report on Form 10-K.

CONSOLIDATED RESULTS OF OPERATIONS

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~~net assets of approximately $3638 million as of ~~September~~March 3031, ~~2025~~2026. The revenue for these four subsidiaries for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 was approximately $56 million ~~and $17 million, respectively~~. These subsidiaries are not material to the Company’'s results of operations or financial position.

On ~~January~~April 2, ~~2024~~2025, the ~~Company~~United ~~completed~~States government announced additional tariffs on goods imported to the ~~acquisition~~U.S. offrom ~~one~~numerous ~~business~~countries. inIn response, certain countries retaliated with additional counter-tariffs or negotiated with the ~~Test~~U.S. &government ~~Measurement~~regarding ~~and~~tariffs. ~~Electronics~~Tariffs ~~segment~~on ~~for~~goods ~~$57 million,~~from ~~net~~many ofcountries ~~cash~~became ~~acquired~~effective on August 1, 2025. On ~~April~~February 120, ~~2024~~2026, the ~~Company~~U.S. ~~completed~~Supreme ~~the~~Court ~~acquisition~~invalidated many of ~~one~~the ~~business~~tariffs imposed under the International Emergency Economic Powers Act (the "IEEPA"), resulting in the ~~Test~~termination &of ~~Measurement~~many ~~and~~tariffs ~~Electronics~~imposed ~~segment~~in ~~for~~2025. ~~$59 million~~Following this decision, ~~net~~a ofnew ~~cash~~temporary ~~acquired~~10 percent global tariff was imposed under the Trade Act, which may remain in effect up to 150 days. The Company ~~has~~believes ~~completed~~that ~~the~~it ~~allocation~~continues ofto ~~purchase~~be ~~price~~well ~~for~~positioned ~~both~~to minimize the impact of these ~~acquisitions.~~tariffs ~~These~~because ~~acquisitions~~its ~~were~~businesses ~~not~~generally ~~material,~~manufacture ~~individually~~products or in the ~~aggregate,~~markets towhere they are sold and the Company’s ~~results~~expects ofto ~~operations~~recover any increased cost due to tariffs through price increases. However, ~~financial~~current ~~position~~tariff orpolicies ~~cash~~have ~~flows~~introduced additional uncertainty and may negatively impact overall demand from the Company's customers. ~~Refer~~The Company continues to ~~Note~~assess 2.the ~~Acquisitions~~impact inof ~~Item~~the 1.tariffs ~~Financial~~and ~~Statements~~actions ~~for~~that ~~further~~can ~~information~~be ~~regarding~~taken ~~these~~to ~~acquisitions~~moderate and/or minimize their effects on the Company.

~~During~~On ~~the~~October ~~first~~1, ~~quarter of 2024~~2025, the Company ~~changed~~completed the ~~method~~acquisition ~~used~~of toone ~~determine~~business in the ~~cost~~Test of& ~~inventory~~Measurement atand ~~certain~~Electronics ~~U.S.~~segment ~~businesses~~for ~~from~~$120 million, ~~LIFO~~net toof ~~the~~cash ~~FIFO method~~acquired, asand ~~the~~subject ~~Company~~to ~~believes~~certain ~~the~~closing ~~FIFO~~adjustments. ~~method~~The isallocation ~~preferable~~of ~~because~~purchase itprice ~~provides a more consistent method~~ for ~~valuing~~this ~~inventory~~acquisition ~~across~~will ~~the~~be ~~Company’s~~completed ~~operations,~~as ~~improves~~soon ~~comparability~~as ~~with peers~~practicable, ~~and~~but ~~better~~no ~~reflects~~later ~~the~~than ~~current~~one ~~value~~year offrom ~~inventories at~~ the ~~balance~~acquisition ~~sheet~~ date. ~~The~~This ~~LIFO~~acquisition ~~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 12. ~~Significant~~Acquisitions ~~Accounting Policies~~ in Item 1. Financial Statements for ~~additional~~further information regarding this ~~change in accounting method~~acquisition.

OnIn ~~April~~an 2,uncertain ~~2025,~~external ~~the United States government announced additional tariffs on goods imported to the U.S. from numerous countries. In response~~environment, ~~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~~delivered itsolid isfinancial ~~well~~results ~~positioned to minimize the impact of these tariffs because its businesses generally manufacture products~~ in the ~~markets~~first ~~where~~quarter ~~they~~of ~~are~~2026 ~~sold~~primarily ~~and~~due ~~the Company expects~~ to ~~recover~~ the ~~increased~~continued ~~cost~~successful execution of ~~tariffs~~enterprise ~~through~~initiatives ~~price increases. However, current tariff policies have introduced additional uncertainty~~ and ~~may~~continued ~~negatively~~focus ~~impact~~on ~~overall demand from~~ the ~~Company's~~highly ~~customers.~~differentiated ~~The~~ITW ~~Company~~Business ~~continues to assess the impact of the tariffs and actions that can be taken to moderate and/or minimize their effects on the Company~~Model.

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.

Operating Revenue

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~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 compared to ~~2024~~2025.

Operating Expenses

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
Dollars in millions	~~2025~~2026			~~2024~~2025			~~2025~~			~~2024~~
Operating Revenue	$	4,~~059~~016		$	3,~~966~~839		$	~~11,951~~		$	~~11,966~~
Cost of revenue	$	2,~~253~~256		$	2,~~230~~161		$	~~6,685~~		$	~~6,637~~
Percent of operating revenue	5556.52		%	56.23		%	~~55.9~~		%	~~55.5~~		%
Selling, administrative, and research and development expenses	$	~~676~~722		$	~~658~~706		$	~~2,075~~		$	~~2,020~~
Percent of operating revenue	1618.60		%	1618.64		%	~~17.4~~		%	~~16.9~~		%
Amortization and impairment of intangible assets	$	18		$	2621		$	60		$	76
Percent of operating revenue	0.54		%	0.65		%	~~0.5~~		%	~~0.6~~		%

Cost of revenue was $2.253 billion and $2.232 billion in the ~~third~~first quarter of ~~2025~~2026 and ~~2024~~2025, respectively, an increase of 14.04%, primarily due to higher revenue. ~~Cost~~and ~~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~~2026 ~~year-to-date period of 2025~~ compared to ~~2024~~2025 ~~primarily~~as ~~due to~~ benefits from the Company's enterprise initiatives, ~~partially~~were essentially offset by higher employee-related expenses and higher revenue.

Selling, administrative, and research and development expenses were $~~676~~722 million and $~~658~~706 million in the ~~third~~first quarter of ~~2025~~2026 and ~~2024~~2025, respectively, ~~and~~an ~~$2.08~~increase ~~billion~~of ~~and $~~2.~~02 billion in the year-to-date period of 2025 and 2024, respectively~~3%. Selling, administrative, and research and development expenses as a percent of operating revenue were ~~flat~~lower in ~~the~~2026 ~~third~~compared ~~quarter~~to as2025 primarily due to benefits from the Company's enterprise initiatives, ~~were~~partially offset by higher ~~employee-related expenses. Selling~~selling, ~~administrative,~~advertising 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.

Amortization and impairment of intangible assets was lower in the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 compared to ~~2024~~2025 primarily due to fully amortized intangible assets.

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~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 compared to ~~2024~~2025.

RESULTS OF OPERATIONS FOR TOTAL COMPANY

The Company's consolidated results of operations for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	4,~~059~~016		$	3,~~966~~839		24.36	%	0.74	%	—0.3	%	—	%	13.69	%	24.36	%
Operating income	$	1,~~112~~020		$	~~1,052~~951		5.7.2	%	42.60	%	—(0.2)	%	(01.4)	%	14.50	%	5.7.2	%
Operating margin %	2725.4		%	2624.58		%	9060 bps		~~100~~40 bps		—(10) bps		~~(10)~~30 bps		—		9060 bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	11,951		$	11,966		(0.1)	%	(0.4)	%	—	%	—	%	0.3	%	(0.1)	%
Operating income	$	3,131		$	3,233		(3.2)	%	(3.3)	%	(0.1)	%	—	%	0.2	%	(3.2)	%
Operating margin %	26.2		%	27.0		%	(80) bps		(70) bps		—		—		(10) bps		(80) bps

•Operating revenue grew due to the favorable effect of foreign currency translation and higher organic and acquisition revenues.

•~~Operating~~Organic revenue increased 0.4% as growth in the ~~third~~Test ~~quarter~~& ~~due~~Measurement toand ~~the~~Electronics, ~~favorable~~Welding ~~effect~~and ofPolymers ~~foreign~~& ~~currency~~Fluids ~~translation~~segments ~~and~~was ~~higher~~partially ~~organic~~offset ~~revenue.~~by Ina decline in the ~~year-to-date~~Specialty ~~period~~Products, ~~operating~~Food ~~revenue~~Equipment, ~~declined~~Automotive ~~due~~OEM toand ~~lower~~Construction ~~organic~~Products ~~revenue,~~segments. ~~partially~~Product ~~offset~~line bysimplification ~~the~~activities ~~favorable~~reduced ~~effect~~organic ofrevenue ~~foreign~~by ~~currency~~60 ~~translation~~basis points.

~~•Organic~~◦North American organic revenue ~~increased~~grew 01.72% ~~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~~Welding ~~revenue declined 0.4% as a decrease in the Construction Products, Test & Measurement~~ and ~~Electronics and~~ Polymers & Fluids segments was partially offset by ~~growth~~a decrease in the ~~Automotive OEM, Welding,~~ Food Equipment, ~~and~~ Specialty Products, ~~segments.~~Automotive ~~Product~~OEM ~~line simplification activities reduced organic revenue by 70 basis points~~ and 60Construction ~~basis~~Products ~~points in the third quarter and year-to-date periods, respectively~~segments.

◦~~North American organic revenue was flat in the third quarter as an increase in the Welding~~Europe, ~~Automotive~~Middle ~~OEM~~East and ~~Food~~Africa ~~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~~decreased 12.72% as a ~~decrease~~decline in the Test & Measurement and Electronics, Construction Products, ~~Automotive OEM~~ and ~~Polymers~~Welding ~~& Fluids~~ segments was partially offset by growth in the ~~Food~~Specialty ~~Equipment~~Products, ~~Specialty~~Polymers ~~Products~~& Fluids, Food Equipment and ~~Welding~~Automotive OEM segments.

◦~~Europe,~~Asia ~~Middle~~Pacific ~~East and Africa~~ organic revenue ~~declined~~grew 1.2.4% inprimarily ~~the~~due ~~third~~to ~~quarter~~growth ~~as a decrease~~ in the Test & Measurement and Electronics, ~~Polymers~~segment. &Organic ~~Fluids,~~revenue ~~Construction Products and Food Equipment segments was partially offset by an increase~~ in ~~the~~China ~~Specialty Products, Automotive OEM and Welding segments. In the year-to-date period, organic revenue~~ decreased 21.38% as a decline in ~~five segments was partially offset by an increase in~~ the ~~Welding~~Automotive ~~and~~OEM, Specialty Products, ~~segments.~~

◦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.20

~~•Operating~~Construction ~~income~~Products ofand ~~$1.1~~Food ~~billion~~Equipment ~~increased~~segments ~~5.7%~~was inpartially ~~the~~offset ~~third~~by ~~quarter~~growth ~~compared~~in to the ~~prior~~Test ~~year.~~& InMeasurement ~~the~~and ~~year-to-date period~~Electronics, ~~operating~~Polymers ~~income~~& ofFluids ~~$3.1~~and ~~billion~~Welding ~~declined 3~~segments.~~2%, or increased 0.5% excluding the $117 million favorable impact of the first quarter 2024 LIFO accounting method change.~~

•Operating ~~margin~~income ~~was~~of 27$1.4%0 inbillion ~~the~~increased ~~third quarter~~7. 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 expenses2%.

•InOperating ~~the year-to-date period, operating~~ margin of 2625.24% ~~decreased~~increased 8060 basis points. ~~Excluding~~primarily ~~the~~due ~~100~~to ~~basis~~benefits ~~points of favorable impact~~ from the ~~first~~Company's ~~quarter~~enterprise ~~2024~~initiatives ~~LIFO~~of ~~accounting~~120 ~~method change, operating margin increased 20~~ basis points ~~compared~~and tolower ~~the~~restructuring ~~prior~~expenses ~~year primarily driven by benefits from the Company's enterprise initiatives~~ of ~~130~~30 basis points, partially offset by higher employee-related expenses~~, including higher health and welfare expenses~~.

23•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.

•~~The~~Diluted ~~Company's~~earnings ~~effective~~per ~~tax~~share ~~rate~~("EPS") ~~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~~2.S.66 ~~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~~2026 ~~related~~increased 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~~.8%.

•~~Diluted~~The ~~earnings~~Company ~~per~~repurchased ~~share~~approximately ~~(EPS) of $2.81 for the third quarter of 2025 decreased 28.~~1~~%, or increased 6~~.0%4 ~~excluding~~million ~~the~~shares ~~favorable impact~~ of ~~$1.26~~its ~~from~~common ~~the~~stock ~~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~~2026 ~~and~~for ~~the~~approximately ~~favorable impact of~~ $~~1.25~~375 ~~from the third quarter 2024 Wilsonart transaction~~million. ~~Additionally, the third quarter and year-to-date periods of 2025 included $0.09 from the third quarter discrete tax benefit previously discussed.~~

•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.

RESULTS OF OPERATIONS BY SEGMENT

Total operating revenue and operating income for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Dollars in millions

Operating Revenue

Operating Income

~~Operating Revenue~~

~~Operating Income~~

2025

2024

2025

2024

2025

2024

2025

2024

2026

2025

2026

2025

Automotive OEM

~~830~~820

~~772~~786

~~182~~173

~~150~~151

~~2,461~~

~~2,403~~

~~513~~

~~469~~

Food Equipment

~~694~~637

~~677~~627

~~202~~157

~~193~~166

~~2,001~~

~~1,975~~

~~557~~

~~537~~

Test & Measurement and Electronics

~~698~~715

~~697~~652

~~177~~164

~~179~~139

~~2,036~~

~~2,071~~

~~473~~

~~501~~

Welding

~~477~~507

~~462~~472

~~156~~163

~~149~~153

~~1,428~~

~~1,404~~

~~468~~

~~458~~

Polymers & Fluids

~~441~~452

~~448~~429

126

~~125~~114

~~1,308~~

~~1,334~~

~~361~~

~~364~~

Construction Products

~~473~~458

~~479~~443

~~149~~135

~~145~~130

~~1,389~~

~~1,471~~

~~424~~

~~436~~

Specialty Products

~~452~~431

~~438~~435

~~146~~135

~~136~~135

~~1,342~~

~~1,327~~

~~429~~

~~410~~

Total segments

4,~~065~~020

3,~~973~~844

1,~~138~~053

~~1,077~~988

~~11,965~~

~~11,985~~

~~3,225~~

~~3,175~~

Intersegment revenue

(64)

(75)

—

~~(14)~~

~~(19)~~

—

Unallocated

—

(2633)

(2537)

—

~~(94)~~

Total

4,~~059~~016

3,~~966~~839

1,~~112~~020

~~1,052~~951

~~11,951~~

~~11,966~~

~~3,131~~

~~3,233~~

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.

AUTOMOTIVE OEM

This segment is a global, niche supplier to top tier OEMs, providing unique innovation to address pain points for sophisticated customers with complex problems. Businesses in this segment produce components and fasteners for automotive-related applications. This segment primarily serves the automotive original equipment manufacturers and tiers market. Products in this segment include:

•plastic and metal components, fasteners and assemblies for automobiles, light trucks and other industrial uses.

~~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:~~21

	Three Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	830		$	772		7.3	%	5.0	%	—	%	—	%	2.3	%	7.3	%
Operating income	$	182		$	150		21.0	%	19.0	%	—	%	(0.5)	%	2.5	%	21.0	%
Operating margin %	21.8		%	19.4		%	240 bps		260 bps		—		(20) bps		—		240 bps

The results of operations for the Automotive OEM segment for the first quarter of 2026 and 2025 were as follows:

	Nine Months Ended
	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~2,461~~820		$	~~2,403~~786		24.4	%	2.(0.9)	%	—	%	—	%	05.43	%	24.4	%
Operating income	$	~~513~~173		$	~~469~~151		914.21	%	94.62	%	—	%	(03.9)7	%	06.52	%	914.21	%
Operating margin %	2021.80		%	19.53		%	~~130~~170 bps		~~150~~90 bps		—		~~(20)~~80 bps		—		~~130~~170 bps

•Operating revenue ~~increased~~grew ~~in the third quarter and year-to-date periods~~ due to ~~higher organic revenue and~~ the favorable effect of foreign currency translation, partially offset by lower organic revenue.

•Organic revenue ~~increased~~decreased 5.0~~% in the third quarter and 2~~.09% ~~in the year-to-date period~~ compared to worldwide auto builds which ~~grew~~declined 43% ~~in the third quarter and year-to-date periods~~. Product line simplification activities reduced organic revenue by ~~140~~100 basis points ~~in the third quarter and 130 basis points in the year-to-date period~~.

◦North American organic revenue ~~increased 3.1% and~~ declined 34.29% ~~in the third quarter and year-to-date periods, respectively,~~ compared to North American auto builds which ~~increased~~decreased 52% ~~in the third quarter and declined 1% in the year-to-date period~~, primarily due to product line simplification activities.

◦European organic revenue ~~grew~~increased 2.0~~% in the third quarter and decreased 1~~.41% ~~in the year-to-date period~~ compared to European auto builds which ~~increased~~declined 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.

◦Asia Pacific organic revenue ~~increased~~grew 102.7%, ~~and~~primarily ~~13.2%~~due into ~~the~~growth ~~third~~in ~~quarter~~India and ~~year-to-date~~South ~~periods~~Korea, ~~respectively.~~partially ~~China~~offset ~~organic~~by ~~revenue~~a ~~grew~~decline 10in China.1% ~~and~~Organic ~~15.1%~~revenue in ~~the~~China ~~third~~decreased ~~quarter~~3.2% ~~and~~compared ~~year-~~to~~-date~~ ~~periods, respectively, including growth in the electric vehicles market, versus~~ China auto builds which ~~grew~~declined 10% ~~in the third quarter and increased 12% in the year-to-date period~~. Auto builds of foreign automotive manufacturers in China decreased 218% ~~and 4% in the third quarter and year-to-date periods, respectively~~. The business outperformed the market primarily due to market penetration gains including growth in the electric vehicles end market.

•Operating margin ~~was~~of 21.80% inincreased ~~the~~170 ~~third quarter. The increase of 240~~ basis points ~~was~~ primarily due to benefits from the Company's enterprise initiatives and ~~favorable~~lower ~~operating~~restructuring ~~leverage~~expenses of 9080 basis points, partially offset by higher employee-related expenses, continued investment in the business and ~~higher~~unfavorable ~~restructuring~~operating ~~expenses~~leverage of 20 basis points.

•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.

FOOD EQUIPMENT

This segment is a highly focused and branded industry leader in commercial food equipment differentiated by innovation and integrated service offerings. This segment primarily serves the food service, food retail and food institutional/restaurant markets. Products in this segment include:

•warewashing equipment;

•cooking equipment, including ovens, ranges and broilers;

•refrigeration equipment, including refrigerators, freezers and prep tables;

•food processing equipment, including slicers, mixers and scales;

•kitchen exhaust, ventilation and pollution control systems; and

•food equipment service, maintenance and repair.

The results of operations for the Food Equipment segment for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~694~~637		$	~~677~~627		21.57	%	0(2.78)	%	—	%	—	%	14.85	%	21.57	%
Operating income	$	~~202~~157		$	~~193~~166		(5.13)	%	2(9.78)	%	—	%	0.76	%	13.79	%	(5.13)	%
Operating margin %	2924.27		%	2826.45		%	80(180) bps		60(190) bps		—		20 bps		—(10) bps		80(180) bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	2,001		$	1,975		1.3	%	0.9	%	—	%	—	%	0.4	%	1.3	%
Operating income	$	557		$	537		3.8	%	2.9	%	—	%	0.5	%	0.4	%	3.8	%
Operating margin %	27.8		%	27.2		%	60 bps		50 bps		—		10 bps		—		60 bps

•Operating revenue grew due to the favorable effect of foreign currency translation, partially offset by lower organic revenue.

•~~Operating~~Organic revenue ~~increased~~decreased in2.8% ~~the~~as ~~third~~equipment ~~quarter~~organic ~~due~~revenue todeclined ~~the~~6.0% ~~favorable effect of foreign currency translation~~ and ~~higher~~service organic revenue. ~~In the year-to-date period, operating revenue~~ grew ~~due to higher organic revenue and the favorable effect of foreign currency translation~~3. 2%.

~~•Organic~~◦North American organic revenue ~~increased~~decreased 04.7%. inEquipment ~~the~~organic ~~third~~revenue ~~quarter~~declined as10.1% ~~equipment~~primarily ~~organic~~due ~~revenue~~to ~~decreased~~lower ~~0.5%~~demand in the institutional and ~~service~~food ~~organic~~retail ~~revenue~~end ~~grew~~markets, ~~2.7%.~~partially Inoffset ~~the~~by ~~year-to-date~~higher ~~period,~~demand ~~organic~~in ~~revenue~~the ~~grew~~noninstitutional ~~0.9%~~end asmarket, ~~equipment~~primarily ~~organic~~in ~~revenue~~the ~~declined~~quick ~~0.2%~~serve ~~and~~restaurant ~~service~~end market. Service organic revenue ~~increased~~grew 24.81%.

◦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%.22

◦International organic revenue ~~declined~~grew 10.2% ~~in the third quarter~~. Equipment organic revenue decreased 20.34% primarily due to lower demand in the European cooking and refrigeration end markets ~~and lower demand in Asia~~, partially offset by ~~growth~~higher demand 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~~Asia. Service organic revenue ~~increased~~grew 01.25%.

•Operating margin ~~was~~of 2924.27% indecreased ~~the~~180 ~~third quarter. The increase of 80~~ basis points ~~was~~ primarily due to ~~benefits~~product ~~from~~mix, ~~the~~unfavorable ~~Company's enterprise initiatives and favorable~~ operating leverage of 1060 basis points and higher employee-related expenses, partially offset by ~~higher~~benefits ~~employee-related~~from ~~expenses~~the Company's enterprise initiatives and ~~additional~~lower ~~investment~~restructuring inexpenses ~~the~~of ~~business~~20 basis points.

•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.

TEST & MEASUREMENT AND ELECTRONICS

This segment is a branded and innovative producer of test and measurement and electronic manufacturing and maintenance, repair, and operations, or "MRO" solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics. This segment primarily serves the electronics, general industrial, automotive original equipment manufacturers and tiers, energy, industrial capital goods and consumer durables markets. Products in this segment include:

•equipment, consumables, and related software for testing and measuring of materials, structures, gases and fluids;

•electronic assembly equipment;

•electronic components and component packaging;

•static control equipment and consumables used for contamination control in clean room environments; and

•pressure sensitive adhesives and components for electronics, medical, transportation and telecommunications applications.

The results of operations for the Test & Measurement and Electronics segment for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~698~~715		$	~~697~~652		09.36	%	~~(1.~~4).6	%	—1.8	%	—	%	13.72	%	09.36	%
Operating income	$	~~177~~164		$	~~179~~139		(017.7)6	%	(013.1)7	%	—(1.3)	%	(12.9)4	%	12.38	%	(017.7)6	%
Operating margin %	2522.49		%	2521.74		%	~~(30)~~150 bps		30180 bps		—(60) bps		(50) bps		(1020) bps		~~(30)~~150 bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	2,036		$	2,071		(1.6)	%	(2.5)	%	—	%	—	%	0.9	%	(1.6)	%
Operating income	$	473		$	501		(5.6)	%	(4.4)	%	(0.4)	%	(1.3)	%	0.5	%	(5.6)	%
Operating margin %	23.2		%	24.2		%	(100) bps		(50) bps		(10) bps		(30) bps		(10) bps		(100) bps

•Operating revenue grew due to higher organic and acquisition revenues and the favorable effect of foreign currency translation.

•~~Operating~~On ~~revenue~~October ~~increased~~1, in2025, the ~~third~~Company ~~quarter~~completed ~~due to~~ the ~~favorable~~acquisition ~~effect~~ of ~~foreign~~one ~~currency~~business ~~translation,~~in ~~partially~~the ~~offset~~Test by& ~~lower~~Measurement ~~organic~~and ~~revenue.~~Electronics Insegment ~~the~~for ~~year-to-date period~~$120 million, ~~operating~~net ~~revenue~~of ~~declined~~cash ~~due~~acquired. Refer to ~~lower~~Note ~~organic~~2. ~~revenue,~~Acquisitions ~~partially~~in ~~offset~~Item by1. ~~the~~Financial ~~favorable~~Statements ~~effect~~for offurther ~~foreign~~information ~~currency~~regarding ~~translation~~this acquisition.

•OnOrganic ~~April~~revenue 1,increased ~~2024,~~4.6% ~~the~~primarily ~~Company~~due ~~completed~~to ~~the~~higher ~~acquisition~~demand ~~of one business~~ in the ~~Test~~semiconductor ~~& Measurement~~ and ~~Electronics~~electronics ~~segment~~end ~~for $59 million~~markets, ~~net~~partially ofoffset ~~cash~~by ~~acquired.~~lower ~~Refer~~demand ~~to Note 2. Acquisitions~~ in ~~Item~~the 1.general ~~Financial~~industrial ~~Statements~~end ~~for additional information regarding this acquisition~~market.

•◦Organic revenue ~~decreased~~for ~~1.4%~~the intest ~~the~~and ~~third~~measurement ~~quarter~~businesses ~~and~~increased 21.54% indriven ~~the~~by ~~year-to-date~~higher ~~period primarily due to lower~~ demand in the ~~MTS~~semiconductor ~~Test~~end &market, ~~Simulation~~primarily ~~business and~~ in ~~the~~North ~~general~~America ~~industrial~~and ~~end~~Asia ~~market~~Pacific, partially offset by ~~higher~~a ~~demand~~decline in the ~~semiconductor~~MTS ~~end~~Test ~~market~~& Simulation business.

◦~~Organic~~Electronics organic revenue ~~for~~increased ~~the~~10.3% ~~test~~primarily ~~and~~due ~~measurement~~to ~~businesses~~higher ~~decreased~~demand ~~0.6%~~ in the ~~third~~semiconductor ~~quarter~~end ~~and~~market. ~~declined~~The ~~4.3%~~electronics inassembly ~~the~~businesses ~~year-to-date~~grew ~~period~~24.7% primarily ~~driven~~due byto ahigher ~~decline~~demand in ~~the~~North ~~MTS~~America ~~Test~~and &Asia ~~Simulation~~Pacific. ~~business~~The ~~and~~other inelectronics businesses, which include the ~~general~~contamination ~~industrial~~control, ~~end~~static ~~market~~control and pressure sensitive adhesives businesses, ~~partially~~grew ~~offset~~5.1% byprimarily due to higher demand in ~~the~~North ~~semiconductor~~America ~~end~~and ~~market~~Asia Pacific, ~~primarily~~partially inoffset ~~Asia~~by ~~Pacific~~a ~~and~~decline ~~North~~in ~~America~~Europe.

~~◦Electronics~~•Operating ~~organic~~margin ~~revenue~~of ~~decreased 1~~22.9% inincreased ~~the~~150 ~~third~~basis ~~quarter~~points ~~with lower demand across all major regions~~ primarily due to ~~lower~~positive ~~demand~~operating inleverage ~~the~~of ~~semiconductor~~130 ~~end~~basis ~~market. In the year-to-date period~~points, ~~organic~~benefits ~~revenue~~from ~~grew~~the ~~1.5%~~Company's ~~primarily~~enterprise ~~due~~initiatives ~~to higher demand in Asia Pacific~~ and ~~Europe,~~lower ~~primarily~~restructuring inexpenses ~~the~~of ~~semiconductor~~50 ~~end~~basis ~~market~~points, partially offset by ~~lower demand in North America. The electronics assembly businesses declined 9.2% in~~ the ~~third~~dilutive ~~quarter~~impact ~~and~~of ~~decreased~~60 ~~3.7%~~basis inpoints ~~the~~from ~~year-to-date~~an ~~period~~acquisition ~~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~~employee-~~to-date~~related ~~period, organic revenue increased 3~~expenses.~~5% with growth across all major regions.~~

•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.

•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.

WELDING

This segment is a branded value-added equipment and specialty consumable manufacturer with innovative and leading technology. Businesses in this segment produce arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications. This segment primarily serves the general industrial market, which includes fabrication, shipbuilding and other general industrial markets, and construction, energy, MRO, industrial capital goods and automotive original equipment manufacturers and tiers markets. Products in this segment include:

shipbuilding and other general industrial markets, and construction, energy, MRO, industrial capital goods and automotive original equipment manufacturers and tiers markets. Products in this segment include:

•arc welding equipment; and

•metal arc welding consumables and related accessories.

The results of operations for the Welding segment for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~477~~507		$	~~462~~472		37.3	%	26.80	%	—	%	—	%	01.53	%	37.3	%
Operating income	$	~~156~~163		$	~~149~~153		46.52	%	45.9	%	—	%	(0.75)	%	0.38	%	46.52	%
Operating margin %	32.61		%	32.35		%	30(40) bps		60(10) bps		—		(2010) bps		(1020) bps		30(40) bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	1,428		$	1,404		1.7	%	1.9	%	—	%	—	%	(0.2)	%	1.7	%
Operating income	$	468		$	458		2.3	%	2.3	%	—	%	0.1	%	(0.1)	%	2.3	%
Operating margin %	32.8		%	32.6		%	20 bps		10 bps		—		10 bps		—		20 bps

•Operating revenue grew due to higher organic revenue and the favorable effect of foreign currency translation.

•~~Operating~~Organic revenue ~~grew~~increased in6.0% ~~the~~as ~~third~~equipment ~~quarter due to higher organic revenue~~ and ~~the~~consumables ~~favorable~~grew ~~effect of foreign currency translation~~8.1% Inand ~~the year-to-date period~~2.1%, ~~operating revenue grew due to higher organic revenue, partially offset by the unfavorable effect of foreign currency translation~~respectively.

~~•Organic~~◦North American organic revenue increased 2.8.4% primarily due to growth in the ~~third~~industrial ~~quarter~~and ascommercial ~~equipment~~end ~~grew~~markets 5of 7.52% and ~~consumables declined 1~~5.76%., ~~In the year-to-date period~~respectively, ~~organic~~and ~~revenue~~growth ~~grew~~in ~~1.9%~~the asaerospace ~~equipment~~end ~~increased 3~~market.~~6% and consumables decreased 0.9%.~~

◦~~North~~International ~~American~~ organic revenue ~~increased~~declined 26.~~5% in the third quarter as the industrial end market grew 3.1%, partially offset by a decline of~~ 2.3% inprimarily ~~the~~due ~~commercial end market. In the year-~~to~~-date~~ ~~period,~~lower ~~organic~~demand ~~revenue~~in ~~grew~~Asia ~~0.4%~~Pacific asand ~~the~~Middle ~~industrial end market increased 1~~East.~~3%, partially offset by a decrease of 2.9% in the commercial end market.~~

~~◦International~~•Operating ~~organic~~margin ~~revenue~~of ~~grew 4~~32.01% indecreased ~~the~~40 ~~third~~basis ~~quarter~~points ~~and~~primarily ~~9.6%~~due into ~~the~~higher ~~year~~employee-~~to-date~~related ~~period~~expenses, ~~primarily~~partially ~~due~~offset toby ~~higher~~positive ~~demand~~operating inleverage ~~Asia~~of ~~Pacific~~100 basis points and benefits from the ~~Middle~~Company's ~~East~~enterprise initiatives.

•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.

•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.

POLYMERS & FLUIDS

This segment is a branded supplier to niche markets that require value-added, differentiated products. Businesses in this segment produce engineered adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. This segment primarily serves the automotive aftermarket, general industrial and MRO markets. Products in this segment include:

•adhesives for industrial, construction and consumer purposes;

•chemical fluids which clean or add lubrication to machines;

•epoxy and resin-based coating products for industrial applications;

•hand wipes and cleaners for industrial applications;

•fluids, polymers and other supplies for auto aftermarket maintenance and appearance;

•fillers and putties for auto body repair; and

•polyester coatings and patch and repair products for the marine industry.

The results of operations for the Polymers & Fluids segment for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~441~~452		$	~~448~~429		(15.8)4	%	~~(3.~~1).7	%	—	%	—	%	1.3.7	%	(15.8)4	%
Operating income	$	126		$	~~125~~114		011.3	%	(17.0)5	%	—	%	—0.3	%	1.3.5	%	011.3	%
Operating margin %	28.50		%	2726.95		%	60150 bps		60150 bps		—		—10 bps		—(10) bps		60150 bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	1,308		$	1,334		(2.0)	%	(1.8)	%	—	%	—	%	(0.2)	%	(2.0)	%
Operating income	$	361		$	364		(1.0)	%	(0.7)	%	—	%	0.2	%	(0.5)	%	(1.0)	%
Operating margin %	27.6		%	27.3		%	30 bps		30 bps		—		—		—		30 bps

•Operating revenue grew due to the favorable effect of foreign currency translation and higher organic revenue.

•~~Operating~~Organic revenue ~~decreased~~increased in1.7% ~~the third quarter~~ due to ~~lower~~higher ~~organic~~demand ~~revenue,~~across ~~partially~~all ~~offset~~major ~~by the favorable effect of foreign currency translation~~regions. InProduct ~~the~~line ~~year-to-date~~simplification ~~period,~~activities ~~operating~~reduced ~~revenue declined due to lower~~ organic revenue ~~and~~by ~~the~~70 ~~unfavorable~~basis ~~effect of foreign currency translation~~points.

•◦Organic revenue ~~decreased~~for ~~3.1% in~~ the ~~third~~automotive ~~quarter~~aftermarket ~~and~~businesses 1increased 2.89% inprimarily ~~the~~due ~~year-~~to~~-date~~ ~~period.~~higher ~~Product~~demand ~~line~~in ~~simplification~~the ~~activities~~car ~~reduced~~care, ~~organic~~engine ~~revenue~~repair byand 70tire ~~basis~~repair ~~points~~businesses ~~and~~in 60North ~~basis~~America ~~points~~and in the ~~third~~tire ~~quarter~~repair ~~and~~business ~~year-to-date~~in ~~periods,~~Asia ~~respectively~~Pacific and Europe.

◦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.24

◦Organic revenue for the fluids businesses ~~declined~~grew 0.43% ~~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~~European ~~end~~life ~~market.~~sciences Inend ~~the year-to-date period~~market, ~~organic revenue decreased 1.0% primarily due to lower demand in North America,~~ partially offset by ~~growth~~lower ~~in Europe, primarily due to higher~~ demand in ~~the~~North ~~hygiene end market~~America.

◦Organic revenue for the ~~automotive~~polymers ~~aftermarket~~ businesses ~~decreased~~grew 30.~~3% in the third quarter and declined~~ 2.1% ~~in the year-to-date period~~ primarily due to ~~lower~~an ~~demand~~increase in ~~the~~Asia ~~North American body~~Pacific, ~~tire and engine repair businesses,~~ partially offset by ~~higher~~a ~~demand~~decrease in ~~the~~Europe ~~car~~and ~~care business~~ in North America ~~and the tire repair business in Europe~~.

•Operating margin ~~was~~of 28.50% inincreased ~~the~~150 ~~third quarter. The increase of 60~~ basis points ~~was~~ primarily due to benefits from the Company's enterprise initiatives, ~~favorable~~positive ~~price/cost~~operating leverage of 5040 basis points and ~~product~~lower ~~mix~~intangible asset amortization expense, partially offset by ~~unfavorable operating leverage of 60 basis points and~~ higher employee-related expenses.

•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.

CONSTRUCTION PRODUCTS

This segment is a branded supplier of innovative engineered fastening systems and solutions. This segment primarily serves the residential construction, renovation/remodel and commercial construction markets. Products in this segment include:

•fasteners and related fastening tools for wood and metal applications;

•anchors, fasteners and related tools for concrete applications;

•metal plate truss components and related equipment and software; and

•packaged hardware, fasteners, anchors and other products for retail.

The results of operations for the Construction Products segment for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~473~~458		$	~~479~~443		(13.4)	%	(21.3)	%	—	%	—	%	04.97	%	(13.4)	%
Operating income	$	~~149~~135		$	~~145~~130		34.12	%	2(0.59)	%	—	%	~~(0.~~1).2	%	03.79	%	34.12	%
Operating margin %	3129.64		%	3029.2		%	~~140~~20 bps		~~150~~10 bps		—		—40 bps		(1030) bps		~~140~~20 bps

	Nine Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	1,389		$	1,471		(5.6)	%	(5.6)	%	—	%	—	%	—	%	(5.6)	%
Operating income	$	424		$	436		(2.7)	%	(4.0)	%	—	%	1.3	%	—	%	(2.7)	%
Operating margin %	30.6		%	29.6		%	100 bps		50 bps		—		50 bps		—		100 bps

•Operating revenue grew due to the favorable effect of foreign currency translation, partially offset by lower organic revenue.

•~~Operating~~Organic revenue decreased in1.3% ~~the~~primarily ~~third quarter~~ due to lower ~~organic~~demand ~~revenue,~~in ~~partially~~Europe ~~offset~~and byAsia ~~the favorable effect of foreign currency translation~~Pacific. ~~In the year-to-date period, operating revenue declined due to lower organic revenue.~~

~~•Organic~~◦North ~~revenue~~American ~~decreased~~organic ~~2.3%~~revenue inwas ~~the~~flat ~~third~~as ~~quarter~~growth ~~and 5.6%~~ in the ~~year-to-date~~United ~~period~~States ~~due~~residential toend ~~lower~~market ~~demand~~of ~~across all major regions~~0.7% ~~Product~~was ~~line~~offset ~~simplification activities reduced organic revenue~~ by ~~130~~a ~~basis~~decline ~~points~~ in the ~~third~~commercial ~~quarter~~end ~~and~~market ~~100~~of ~~basis~~1.4% ~~points~~and a decline in ~~the~~Canada ~~year-to-date~~of ~~period~~6.7%.

◦~~North~~International ~~American~~ organic revenue decreased 12.18%. inEuropean ~~the~~organic ~~third~~revenue ~~quarter~~declined ~~and 5~~3.84% ~~in the year-to-date period~~ primarily due to lower demand in the ~~residential~~commercial and ~~commercial~~residential end markets. ~~Organic~~Asia ~~revenue~~Pacific inorganic ~~the~~revenue ~~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 31.9% inprimarily ~~the~~due ~~third quarter and 1.4% in the year-~~to~~-date~~ ~~period.~~lower ~~Organic~~demand ~~revenue~~ in ~~Canada declined 7.3% in~~ the ~~third~~Australia ~~quarter~~ and ~~1.1%~~New inZealand ~~the~~residential ~~year-to-date~~end ~~period~~markets.

~~◦International~~•Operating ~~organic~~margin ~~revenue~~of ~~decreased 3~~29.~~6% in the third quarter and 5.3% in the year-to-date period. European organic revenue declined 3.~~4% inincreased ~~the~~20 ~~third~~basis ~~quarter~~points ~~and 3.5% in the year-to-date period~~ primarily due to ~~lower~~benefits ~~demand~~from in the ~~commercial~~Company's ~~and~~enterprise ~~residential~~initiatives ~~end~~and ~~markets.~~lower ~~Asia~~restructuring ~~Pacific~~expenses ~~organic~~of ~~revenue~~40 ~~decreased~~basis ~~3.9%~~points, inpartially ~~the~~offset ~~third~~by ~~quarter~~higher ~~and 7.5% in the year~~employee-~~to-date~~related ~~period~~expenses ~~primarily~~and ~~due~~unfavorable tooperating ~~lower~~leverage ~~demand~~of in20 ~~the~~basis ~~Australia and New Zealand residential end markets~~points.

•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.

•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.

SPECIALTY PRODUCTS

This segment is focused on diversified niche market opportunities with substantial patent protection producing beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. This segment primarily serves the food and beverage, consumer durables, airlines, general industrial, ~~airlines,~~ industrial capital goods and printing and publishing markets. Products in this segment include:

•conveyor systems and line automation for the food and beverage industries;

•plastic consumables that multi-pack cans and bottles and related equipment;

•foil, film and related equipment used to decorate consumer products;

•product coding and marking equipment and related consumables;

•plastic and metal closures and components for appliances;

•airport ground support equipment; and

•components for medical devices.

~~The results of operations for the Specialty Products segment for the third quarter and year-to-date periods of 2025 and 2024 were as follows:~~25

	Three Months Ended
Dollars in millions	September 30,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	452		$	438		3.3	%	1.6	%	—	%	—	%	1.7	%	3.3	%
Operating income	$	146		$	136		7.3	%	5.5	%	—	%	0.2	%	1.6	%	7.3	%
Operating margin %	32.3		%	31.1		%	120 bps		120 bps		—		10 bps		(10) bps		120 bps

The results of operations for the Specialty Products segment for the first quarter of 2026 and 2025 were as follows:

	Nine Months Ended
	Three Months Ended
Dollars in millions	~~September~~March 3031,						Components of Increase (Decrease)
	2025			2024			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
	2026			2025			Inc (Dec)		Organic		Acquisition/Divestiture		Restructuring		Foreign Currency		Total
Operating revenue	$	~~1,342~~431		$	~~1,327~~435		(1.10)	%	0(4.97)	%	—	%	—	%	03.27	%	(1.10)	%
Operating income	$	~~429~~135		$	~~410~~135		40.63	%	4(5.41)	%	—	%	0.1.5	%	03.19	%	40.63	%
Operating margin %	3231.03		%	30.9		%	~~110~~40 bps		~~110~~(10) bps		—		—50 bps		—		~~110~~40 bps

•Operating revenue ~~increased~~declined ~~in the third quarter and year-to-date periods~~ due to ~~higher~~lower organic revenue, ~~and~~partially offset by the favorable effect of foreign currency translation.

•Organic revenue ~~increased~~decreased 14.67% ~~in the third quarter~~ as equipment sales ~~grew 14.2%~~ and consumables ~~decreased~~declined 13.~~8%. In the year-to-date period, organic revenue grew~~ 0.9% asand ~~equipment sales increased~~ 5.82%, ~~and consumables declined 0~~respectively.~~5%.~~ Product line simplification activities reduced organic revenue by 90200 basis points ~~in the third quarter and 110 basis points in the year-to-date period~~.

◦North American organic revenue decreased 05.98% ~~in the third quarter~~ primarily driven by a decline in the ~~consumer packaging~~appliance, ~~strength~~ground ~~films~~support ~~and appliance businesses~~equipment, ~~partially~~consumer ~~offset~~packaging ~~by growth in the filter medical~~ and ~~specialty~~strength films businesses~~. In the year-to-date period~~, ~~organic revenue grew 0.8% primarily due to growth in the specialty films and ground support equipment businesses,~~ partially offset by agrowth ~~decline~~ in the ~~graphics~~filter ~~and~~medical ~~strength films businesses~~business.

◦International organic revenue ~~grew~~declined 62.53% ~~in the third quarter~~ primarily due to ~~growth~~lower demand in the ~~European~~appliance ~~ground~~businesses ~~support~~in ~~equipment,~~Asia ~~graphics,~~Pacific ~~consumer packaging equipment~~ and ~~filter medical businesses~~Europe, partially offset by ~~a decline in the appliance business. In the year-to-date period, organic revenue increased 1.3% primarily driven by~~ growth in the European ground support equipment, specialty films and filter medical businesses ~~and growth in Asia Pacific, partially offset by a decline in the European appliance business~~.

•Operating margin ~~was~~of 3231.3% inincreased ~~the~~40 ~~third quarter. The increase of 120~~ basis points ~~was~~ primarily due to benefits from the Company's enterprise initiatives, ~~favorable~~and ~~price/cost~~lower restructuring expenses of 4050 basis points, ~~and~~partially ~~favorable~~offset by unfavorable operating leverage of 2080 basis points, ~~partially~~and ~~offset by~~ higher employee-related expenses ~~and product mix~~.

•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.

OTHER FINANCIAL HIGHLIGHTS

•Interest expense was $7573 million ~~and $217 million~~ in the ~~third~~first quarter ~~and~~2026 ~~year-to-date periods of 2025, respectively,~~ versus $6968 million ~~and $215 million~~ in the ~~third~~first quarter ~~and year-to-date periods of 2024, respectively~~2025. Refer to Note 108. Debt in Item 1. Financial Statements for further information regarding the Company's outstanding debt.

•Other income (expense) was income of $12 20 million in the ~~third~~first quarter of ~~2025~~2026 versus $~~379~~12 million in the prior year period, ~~and~~primarily ~~$28~~due ~~million in the year-~~to~~-date~~ ~~period~~foreign ofcurrency 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~~gains ~~immediately after the execution of the purchase agreement. Proceeds from the transaction, net of transaction costs, were $395 million, resulting~~ in a2026 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.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding new accounting pronouncements is included in Note 1. Significant Accounting Policies in Item 1. Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of liquidity are free cash flow and short-term credit facilities. As of ~~September~~March 3031, ~~2025~~2026, the Company had $~~924~~827 million of cash and equivalents on hand and no outstanding borrowings under its $3.0 billion revolving credit facility. The Company also has maintained strong access to public debt markets. Management believes that these sources are sufficient to service debt and to finance the Company's capital allocation priorities, which include:

•internal investments to support organic growth and sustain core businesses;

•payment of an attractive dividend to shareholders; and

•external investments in selective strategic acquisitions that support the Company's organic growth focus and an active share repurchase program.

The Company believes that, based on its operating revenue, operating margin, free cash flow, and credit ratings, it could readily obtain additional financing, if necessary.

3226

Cash Flow

The Company uses free cash flow to measure cash flow generated by operations that is available for dividends, share repurchases, acquisitions and debt repayment. The Company believes this non-GAAP financial measure is useful to investors in evaluating the Company's financial performance and measures the Company's ability to generate cash internally to fund Company initiatives. Free cash flow represents net cash provided by operating activities less additions to plant and equipment. Free cash flow is a measurement that is not the same as net cash flow from operating activities per the statement of cash flows and may not be consistent with similarly titled measures used by other companies. Summarized cash flow information for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 ~~was~~is as follows:

	Three Months Ended				~~Nine Months Ended~~
	September 30,				September 30,
	March 31,
In millions	~~2025~~2026		~~2024~~2025		~~2025~~		~~2024~~
Net cash provided by operating activities	$	~~1,021~~623	$	~~891~~592	$	~~2,163~~	$	~~2,167~~
Additions to plant and equipment	(~~117~~95)		(~~108~~96)		~~(314)~~		~~(319)~~
Free cash flow	$	~~904~~528	$	~~783~~496	$	~~1,849~~	$	~~1,848~~
Cash dividends paid	$	(~~438~~465)	$	(~~415~~441)	$	~~(1,318)~~	$	~~(1,252)~~
Repurchases of common stock	(375)		(375)		~~(1,125)~~		~~(1,125)~~
Acquisition of businesses (excluding cash and equivalents)	—		—2		1		~~(115)~~
Proceeds from sale of noncontrolling interest in Wilsonart International Holdings LLC	—		395		—		395
Net proceeds from (repayments of) debt	259		202
Net proceeds from (repayments of) debt with original maturities of three months or less	25		(333)		489		(199)
Other, net	30		28
Proceeds from debt with original maturities of more than three months	—		—		—		1,606
Effect of exchange rate changes on cash and equivalents	(1)		13
Repayments of debt with original maturities of more than three months	—		—		—		(1,295)
Net increase (decrease) in cash and equivalents	$	(24)	$	(75)
Other, net	14		9		41		31
Effect of exchange rate changes on cash and equivalents	6		21		39		(12)
Net increase (decrease) in cash and equivalents	$	136	$	85	$	(24)	$	(118)

Stock Repurchase Programs

On August 4, 2023, the Company announced a new stock repurchase program which provides for the repurchase of up to $5.0 billion of the Company's common stock over an open-ended period of time (the "2023 Program"). ~~Under~~The ~~the 2023 Program, the~~ Company repurchased ~~approximately 38,000 shares of its common stock at an average price of $263.44 per share in the fourth quarter of 2023, approximately~~ 1.4 million shares of its common stock at an average price of $~~259~~271.0747 ~~per~~during ~~share in~~ the first quarter of ~~2024~~2026, ~~approximately~~and 1.~~6 million shares of its common stock at an average price of $247.42 in the second quarter of 2024, approximately 1.~~5 million shares of its common stock at an average price of $244.88 in the third quarter of 2024, approximately 1.4 million shares of its common stock at an average price of $265.95 in the fourth quarter of 2024, approximately 1.5 million shares of its common stock at an average price of $257.14 induring the first quarter of 2025~~, approximately 1~~.5 million shares of its common stock at an average price of $241.19 in the second quarter of 2025, and approximately 1.5 million shares of its common stock at an average price of $260.58 in the third quarter of 2025. As of ~~September~~March 3031, ~~2025~~2026, there were approximately $21.46 billion of authorized repurchases remaining under the 2023 Program.

3327

After-tax Return on Average Invested Capital

The Company uses after-tax return on average invested capital ("After-tax ROIC") to measure the effectiveness of its operations' use of invested capital to generate profits. After-tax ROIC is not defined under U.S. generally accepted accounting principles ("GAAP"). After-tax ROIC is a non-GAAP financial measure that the Company believes is a meaningful metric to investors in evaluating the Company's ability to generate returns from cash invested in its operations and may be different than the method used by other companies to calculate After-tax ROIC. The Company defines After-tax ROIC as operating income after taxes divided by average invested capital, which is annualized when presented in interim periods. Operating income after taxes is a non-GAAP measure consisting of net income before interest expense and other income (expense), on an after-tax basis, which are excluded as they do not represent returns generated by the Company's operations. For comparability, the Company also excluded the ~~net~~ discrete tax benefit of $2734 million in the ~~third~~first quarter of ~~2025~~2026 from net income and the effective tax rate for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026. Additionally, for comparability, the Company also excluded the discrete tax benefit of $21 million in the first quarter of 2025 from net income and the effective tax rate for the ~~nine~~three months ended ~~September~~March 3031, 2025. Also, for comparability, the Company excluded the net discrete tax benefit of $121 million in the third quarter of 2024 from net income and the effective tax rate for the three and nine months ended September 30, 2024. Total invested capital represents the net assets of the Company, other than cash and equivalents and outstanding debt which do not represent capital investment in the Company's operations. The most comparable GAAP measure to operating income after taxes is net income. Net income to average invested capital and After-tax ROIC for the ~~third~~first quarter ~~and year-to-date periods~~ of ~~2025~~2026 and ~~2024~~2025 were as follows:

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
Dollars in millions	~~2025~~2026			~~2024~~2025			~~2025~~			~~2024~~
Numerator:
Net Income	$	~~821~~768		$	~~1,160~~700		$	~~2,276~~		$	~~2,738~~
Net discrete tax benefit related to the third quarter 2025	(27)			—			(27)			—
Discrete tax benefit related to the first quarter 2026	(34)			—
Discrete tax benefit related to the first quarter 2025	—			—(21)			~~(21)~~			—
Net discrete tax benefit related to the third quarter 2024	—			(121)			—			(121)
Interest expense, net of tax (1)	56			52
Interest expense, net of tax (1)	57			53			165			164
Other (income) expense, net of tax (1)	(15)			(9)
Other (income) expense, net of tax (1)	(10)			(288)			(22)			(320)
Operating income after taxes	$	775		$	722
Operating income after taxes	$	841		$	804		$	2,371		$	2,461
Denominator:
Denominator:
Invested capital:
Invested capital:
Cash and equivalents	$	827		$	873
Cash and equivalents	$	924		$	947		$	924		$	947
Trade receivables	3,380			3,153
Trade receivables	3,255			3,226			3,255			3,226
Inventories	1,726			1,663
Inventories	1,725			1,817			1,725			1,817
Net plant and equipment	2,230			2,085
Net plant and equipment	2,203			2,071			2,203			2,071
Goodwill and intangible assets	5,657			5,475
Goodwill and intangible assets	5,568			5,597			5,568			5,597
Accounts payable and accrued expenses	(2,143)			(2,071)
Accounts payable and accrued expenses	(2,175)			(2,211)			(2,175)			(2,211)
Debt	(9,148)			(8,263)
Debt	(8,942)			(8,346)			(8,942)			(8,346)
Other, net	701			327
Other, net	651			291			651			291
Total net assets (stockholders' equity)	3,230			3,242
Total net assets (stockholders' equity)	3,209			3,392			3,209			3,392
Cash and equivalents	(827)			(873)
Cash and equivalents	(924)			(947)			(924)			(947)
Debt	9,148			8,263
Debt	8,942			8,346			8,942			8,346
Total invested capital	$	11,551		$	10,632
Total invested capital	$	11,227		$	10,791		$	11,227		$	10,791
Average invested capital (2)	$	11,447		$	10,432
Average invested capital (2)	$	11,293		$	10,682		$	10,863		$	10,466
Net income to average invested capital (3)	26.8		%	26.9		%
Net income to average invested capital (3)	29.1		%	43.4		%	27.9		%	34.9		%
After-tax return on average invested capital (3)	27.1		%	27.7		%
After-tax return on average invested capital (3)	29.8		%	30.0		%	29.1		%	31.3		%

34(1) Effective tax rate used for interest expense and other (income) expense for the three months ended March 31, 2026 and 2025 was 24.1% and 24.0%, respectively.

(1) Effective tax rate used for interest expense and other (income) expense for the three months ended September 30, 2025 and 2024 was 24.3% and 23.7%, respectively. Effective tax rate used for interest expense and other (income) expense for the nine months ended September 30, 2025 and 2024 was 24.3% and 23.9%, respectively.28

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

(3) Returns for the three months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 were converted to an annual rate by multiplying the calculated return by 4. ~~Returns for the nine months ended September 30, 2025 and 2024 were converted to an annual rate by dividing the calculated return by 3 and multiplying it by 4.~~

A reconciliation of the tax rate for the three ~~and nine~~ month ~~periods~~period ended ~~September 30~~March 31, ~~2025~~2026, excluding the ~~third~~first quarter ~~2025~~2026 ~~net~~ discrete tax benefit of $2734 million, ~~which~~primarily ~~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~~U.S. 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:

	Three Months Ended				~~Nine Months Ended~~
	September 30, 2025				September 30, 2025
	March 31, 2026
Dollars in millions	Income Taxes		Tax Rate		~~Income Taxes~~		~~Tax Rate~~
As reported	$	~~228~~199	2120.86	%	$	~~666~~	~~22.7~~	%
Net Discrete tax benefit related to the third quarter 2025	27		2.5	%	27		0.9	%
Discrete tax benefit related to the first quarter 2026	34		3.5	%
Discrete tax benefit related to the first quarter 2025	—		—	%	21		0.7	%
As adjusted	$	233	24.1	%
As adjusted	$	255	24.3	%	$	714	24.3	%

~~After-tax~~A ~~ROIC~~reconciliation ~~for the nine months ended September 30, 2024 included 110 basis points~~ of ~~favorable impact related to~~ the ~~cumulative~~tax ~~effect~~rate offor the ~~change~~three ~~from~~month ~~the~~period ~~LIFO~~ended ~~method~~March of31, ~~accounting~~2025, toexcluding the ~~FIFO~~first ~~method~~quarter ~~for~~2025 ~~certain~~discrete ~~U.S. businesses ($117 million pre-~~tax, orbenefit of $8821 million ~~after-tax)~~related into the ~~first~~reversal ~~quarter~~ of ~~2024.~~a ~~Refer~~valuation toallowance ~~Note~~on 1.net ~~Significant~~operating ~~Accounting~~loss ~~Policies~~carryforwards, inis ~~Item~~as 1.follows: ~~Financial Statements for additional information regarding this change in accounting method.~~

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:


	Three Months Ended
	March 31, 2025
Dollars in millions	Income Taxes		Tax Rate
As reported	$	195	21.7	%
Discrete tax benefit related to the first quarter 2025	21		2.3	%
As adjusted	$	216	24.0	%

	Three Months Ended				Nine Months Ended
	September 30, 2024				September 30, 2024
Dollars in millions	Income Taxes		Tax Rate		Income Taxes		Tax Rate
As reported	$	202	14.9	%	$	701	20.4	%
Net discrete tax benefit related to the third quarter 2024	121		8.8	%	121		3.5	%
As adjusted	$	323	23.7	%	$	822	23.9	%

Refer to Note 4. Income Taxes in Item 1. Financial Statements for additional information regarding the discrete tax items noted above.

Refer to Note 5. Income Taxes in Item 1. Financial Statements for additional information regarding the discrete tax benefit related to the first and third quarter 2025 and the third quarter 2024.

Working Capital

Management uses working capital as a measurement of the short-term liquidity of the Company. Net working capital as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 is summarized as follows:

In millions

~~September~~March 3031, ~~2025~~2026

December 31, ~~2024~~2025

Increase/(Decrease)

Current assets:

Cash and equivalents

~~924~~827

~~948~~851

(24)

Trade receivables

3,~~255~~380

23,~~991~~227

~~264~~153

Inventories

1,~~725~~726

1,~~605~~659

~~120~~67

Prepaid expenses and other current assets

~~416~~402

~~312~~463

~~104~~(61)

Total current assets

6,~~320~~335

56,~~856~~200

~~464~~135

Current liabilities:

Short-term debt

12,~~267~~545

12,~~555~~286

~~(288)~~259

Accounts payable and accrued expenses

2,~~175~~143

2,~~095~~158

80(15)

Other

~~690~~643

~~658~~682

32(39)

Total current liabilities

45,~~132~~331

45,~~308~~126

~~(176)~~205

Net working capital

21,~~188~~004

1,~~548~~074

~~640~~(70)

As of ~~September~~March 3031, ~~2025~~2026, a significant portion of the Company's cash and equivalents was held by international subsidiaries. Cash and equivalents held internationally ~~may be subject to foreign withholding taxes if repatriated to the U.S. Cash and equivalents held internationally~~ are typically used for international operating needs or reinvested to fund expansion of existing international businesses. International funds may also be used to fund international acquisitions or, if not considered ~~permanently invested, may be repatriated to the U.S. The Company has accrued for foreign withholding taxes related to foreign held cash and equivalents that are not permanently invested.~~

permanently invested, may be repatriated to the U.S. and subject to foreign withholding taxes. The Company has accrued for foreign withholding taxes related to foreign held cash and equivalents that are not permanently invested.

In the U.S., the Company utilizes cash flows from operations to fund domestic cash needs and the Company's capital allocation priorities. This includes operating needs of the U.S. businesses, dividend payments, share repurchases, acquisitions, servicing of domestic debt obligations, reinvesting to fund expansion of existing U.S. businesses and general corporate needs. The Company may also use its commercial paper program, which is supported by a long-term credit facility, for short-term liquidity needs. 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.

Debt

Total debt as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 was as follows:

In millions	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Short-term debt	$	12,~~267~~545	$	12,~~555~~286
Long-term debt	76,~~675~~603		6,~~308~~683
Total debt	$	89,~~942~~148	$	78,~~863~~969

Short-term debt included commercial paper of $1.35 billion and $~~778~~1.3 ~~million~~billion as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025, respectively. The weighted-average interest rate on commercial paper as of ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 was 43.1781% and 43.5684%, respectively. Short-term debt also included $999 million as of March 31, 2026 and December 31, 2025 related to the 2.65% notes due November 15, 2026, which were reclassified from Long-term debt to Short-term debt in the fourth quarter of 2025.

AsOn ofFebruary ~~December 31~~24, ~~2024~~2025, ~~Short-term~~the ~~debt~~Company ~~also~~entered ~~included~~into ~~$777 million~~an ~~related~~amendment to the Euro-denominated credit agreement entered into on May 5, 2023 (the "Euro Credit Agreement"). ~~On February 24, 2025, the Company entered into an amendment~~ to ~~the Euro Credit Agreement to~~ extend the termination date from April 30, 2025 to February 28, 2027, with an option to further extend the termination date to September 15, 2027. The amendment also decreased the interest rate spread applicable to the loans from 0.75% to 0.70% and removed the option for a one-month interest period. As of ~~September~~March 3031, 2026, the Company had $866 million outstanding under the Euro Credit Agreement with an interest rate of 2.71%, which was included in Long-term debt as the Company intends to exercise its option to extend the termination date. As of December 31, 2025, the Company had $~~880~~881 million outstanding under the Euro Credit Agreement with an interest rate of 2.7377%, which was included in Long-term debt.

36On February 20, 2026, the Company entered into a $3.0 billion, five-year revolving credit facility with a termination date of February 20, 2031, which is available to provide additional liquidity, including to support the potential issuances of commercial paper. This agreement replaced the existing $3.0 billion, five-year revolving credit facility with a termination date of October 21, 2027. No amounts were outstanding under the revolving credit facility as of March 31, 2026.

The Company also has a $3.0 billion revolving credit facility with a termination date of October 21, 2027, which is available to provide additional liquidity, including to support the potential issuances of commercial paper. No amounts were outstanding under the revolving credit facility as of September 30, 2025 or December 31, 2024.

Total Debt to EBITDA

The Company uses the ratio of total debt to EBITDA as a measure of its ability to repay its outstanding debt obligations. EBITDA and the ratio of total debt to EBITDA are non-GAAP financial measures. The Company believes that total debt to EBITDA is a meaningful metric to investors in evaluating the Company's long term financial liquidity and may be different than the method used by other companies to calculate total debt to EBITDA. The ratio of total debt to EBITDA represents total debt divided by net income before interest expense, other income (expense), income taxes, depreciation, and amortization and impairment of intangible assets on a trailing twelve month basis. Total debt to EBITDA for the trailing twelve month periods ended ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025 was as follows:

Dollars in millions	~~September~~March 3031, ~~2025~~2026		December 31, ~~2024~~2025
Total debt	$	89,~~942~~148	$	78,~~863~~969
Net income	$	3,~~026~~134	$	3,~~488~~066
Add:
Interest expense	~~285~~297		~~283~~292
Other (income) expense	(4850)		(~~441~~42)
Income taxes	~~899~~904		~~934~~900
Depreciation	~~311~~324		~~301~~317
Amortization and impairment of intangible assets	8577		~~101~~80
EBITDA	$	4,~~558~~686	$	4,~~666~~613
Total debt to EBITDA ratio	2.0		1.79

Stockholders' Equity

The changes to stockholders' equity during the ~~nine~~three months ended ~~2025~~2026 were as follows:

In millions
Total stockholders' equity, December 31, 2024	$	3,317
Total stockholders' equity, December 31, 2025	$	3,226
Net income	~~2,276~~768
Repurchases of common stock	(~~1,125~~375)
Dividends declared	(~~1,344~~464)
Other comprehensive income (loss)	125
Other, net	8450
Total stockholders' equity, September 30, 2025	$	3,209
Total stockholders' equity, March 31, 2026	$	3,230

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "expect," "plans," "intend," "may," "strategy," "prospects," "estimate," "will," "should," "could," "project," "target," "anticipate," "guidance," "forecast," and other similar words, and may include, without limitation, statements regarding the duration and potential effects of global supply chain challenges, the current and expected impact of U.S. trade policy, including tariffs and related retaliatory countermeasures, ~~the expected impact of the One Big Beautiful Bill Act,~~ future financial and operating performance, free cash flow, economic and regulatory conditions in various geographic regions, the impact of foreign currency fluctuations, the timing and amount of benefits from the Company's enterprise strategy initiatives, the timing and amount of dividends and share repurchases, the protection of the Company's intellectual property, the likelihood of future goodwill or intangible asset impairment charges, the impact of adopting new accounting pronouncements, the adequacy of internally generated funds and credit facilities to service debt and finance the Company's capital allocation priorities, the sufficiency of U.S. generated cash to fund cash requirements in the U.S., the cost and availability of additional financing, the availability of raw materials and energy and the impact of raw material cost inflation, the Company's portion of future benefit payments related to pension and postretirement benefits, the Company's information technology infrastructure, potential acquisitions and divestitures and the expected performance of acquired businesses and impact of divested businesses, the impact of U.S. and global tax legislation and the estimated timing and amount

3731

fluctuations, the timing and amount of benefits from the Company's enterprise strategy initiatives, the timing and amount of dividends and share repurchases, the protection of the Company's intellectual property, the likelihood of future goodwill or intangible asset impairment charges, the impact of adopting new accounting pronouncements, the adequacy of internally generated funds and credit facilities to service debt and finance the Company's capital allocation priorities, the sufficiency of U.S. generated cash to fund cash requirements in the U.S., the cost and availability of additional financing, the availability of raw materials and energy and the impact of raw material cost inflation, the Company's enterprise initiatives, the Company's portion of future benefit payments related to ~~pension and postretirement benefits,~~ the Company's information technology infrastructure, potential acquisitions and divestitures and the expected performance of acquired businesses and impact of divested businesses, the impact of U.S. and global tax legislation and the estimated timing and amount related to the resolution of tax matters, the cost of compliance with environmental regulations, the impact of interest rate changes, the impact of failure of the Company's employees to comply with applicable laws and regulations, and the outcome of outstanding legal proceedings. These statements are subject to certain risks, uncertainties, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that may influence future results include (1) weaknesses or downturns in the markets served by the Company, (2) changes or deterioration in international and domestic political and economic conditions, such as the Russia and Ukraine conflict, the conflict in Iran, or U.S.-China trade relations and the impact of related economic and other sanctions, (3) the unfavorable impact of foreign currency fluctuations, (4) the Company's enterprise strategy initiatives may not have the desired impact on organic revenue growth, (5) market conditions and cost and availability of financing to fund the Company's share repurchases, (6) a delay or decrease in the introduction of new products into the Company's product lines, (7) any failure to protect the Company's intellectual property, (8) potential negative impact of impairments to goodwill and other intangible assets on the Company's return on invested capital, financial condition or results of operations, (9) raw material price increases and supply shortages or delays, (10) financial market risks to the Company's obligations under its defined benefit pension plans, (11) negative effects of service interruptions, data corruption, cyber-based attacks, security breaches of our technology networks and systems or those of our vendors and third-party service providers, or violations of data privacy laws, (12) the potential negative impact of acquisitions on the Company's profitability and returns, (13) potential negative effects of divestitures, including retained liabilities and unknown contingent liabilities, (14) impact of tax legislation and regulatory action and changing tax rates, (15) potential adverse outcomes in legal proceedings or enforcement actions, (16) uncertainties related to environmental regulation and the physical risks of climate change, (17) potential failure of the Company's employees, agents or business partners to comply with anti-bribery, competition, import/export, trade sanctions, data privacy, human rights and other laws, (18) public health crises and related government actions, and (19) increases in inflation or interest rates and the possibility of economic recession. A more detailed description of these risks is contained under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025. These risks are not all inclusive and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Any forward-looking statements made by ITW speak only as of the date on which they are made. ITW is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.

ITW practices fair disclosure for all interested parties. Investors should be aware that while ITW regularly communicates with securities analysts and other investment professionals, it is against ITW's policy to disclose to them any material non-public information or other confidential commercial information. Investors should not assume that ITW agrees with any statement or report issued by any analyst irrespective of the content of the statement or report.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

~~There~~For ~~have~~a ~~been~~discussion noof ~~material~~the ~~changes~~Company's toquantitative ~~exposures~~and toqualitative disclosures about market risk, assee ~~reported~~Part 1 - Item 7A - Quantitative and Qualitative Disclosures About Market Risk in the Company's ~~2024~~2025 Annual Report on Form 10-K. Additionally, refer to Note 8. Debt and Note 9. Accumulated Other Comprehensive Income (Loss) in Item 1. Financial Statements for further information regarding the Company's outstanding debt and net investment hedge.

ITEM 4. Controls and Procedures

The Company's management, with the participation of the Company's President & Chief Executive Officer and Senior Vice President & Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e)) as of ~~September~~March 3031, ~~2025~~2026. Based on such evaluation, the Company's President & Chief Executive Officer and Senior Vice President & Chief Financial Officer have concluded that, as of ~~September~~March 3031, ~~2025~~2026, the Company's disclosure controls and procedures were effective.

In connection with the evaluation by management, including the Company's President & Chief Executive Officer and Senior Vice President & Chief Financial Officer, no changes in the Company's internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the quarter ended ~~September~~March 3031, ~~2025~~2026 were identified that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

3832

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

None. The Company's threshold for disclosing environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.

ITEM 1A. Risk Factors

The Company's business, financial condition, results of operations and cash flows are subject to various risks which could cause actual results to vary materially from recent results or from anticipated future results. Refer to the description of the Company's risk factors previously disclosed in Part I - Item 1A - Risk Factors in the Company's ~~2024~~2025 Annual Report on Form 10-K. There have been no material changes to the risk factors described therein.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

On August 4, 2023, the Company announced a new stock repurchase program which provides for the repurchase of up to ~~an additional~~ $5.0 billion of the Company's common stock over an open-ended period of time (the "2023 Program"). As of ~~September~~March 3031, ~~2025~~2026, there were approximately $21.46 billion of authorized repurchases remaining under the 2023 Program.

Share repurchase activity for the ~~third~~first quarter of ~~2025~~2026 was as follows:

In millions except per share amounts
Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Value of Shares That May Yet Be Purchased Under Programs
July 2025	0.6	$	258.00	0.6	$	2,602
January 2026	0.5	$	256.37	0.5	$	1,865
August 2025	0.5	$	261.27	0.5	$	2,471
February 2026	0.4	$	291.52	0.4	$	1,746
September 2025	0.4	$	263.12	0.4	$	2,365
March 2026	0.5	$	269.83	0.5	$	1,615
Total	1.54			1.54

~~ITEM 5. Other Information~~33

The information set forth below is included for the purpose of providing disclosure under “Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers” of Form 8-K.

(e) At its October 24, 2025 meeting, the Compensation Committee of the Board of Directors of the Company approved the Illinois Tool Works Inc. 2026 Executive Contributory Retirement Income Plan (the "2026 Plan") which will replace the Illinois Tools Works Inc. Executive Contributory Retirement Income Plan (the "Existing Plan"), as restated and amended, as of January 1, 2026. The terms of the 2026 Plan are substantially the same as the Existing Plan but include certain administrative changes. Under the 2026 Plan, similar to the Existing Plan, certain executives may elect to defer a portion of their salary and/or executive cash incentive payments and receive matching contributions they would otherwise receive if such deferrals had been made under the Company's tax-qualified Savings and Investment Plan, without regard to IRS imposed limits. Amounts deferred and related Company contributions will be adjusted for deemed investment results based on an interest rate or deemed investment index or vehicle established by the Compensation Committee. The foregoing summary of the 2026 Plan is qualified by reference to the full text of the 2026 Plan, which is filed as Exhibit 10 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

ITEM 6. Exhibits

Exhibit Index

Exhibit Number						Exhibit Description
10*						Illinois Tool Works Inc. 2026 Executive Contributory Retirement Income Plan, effective January 1, 2026.
31						Rule 13a-14(a) Certifications.
32						Section 1350 Certification.
101						The following financial and related information from the Illinois Tool Works Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 is formatted in Inline Extensible Business Reporting Language (iXBRL) and submitted electronically herewith: (i) Statement of Income, (ii) Statement of Comprehensive Income, (iii) Statement of Financial Position, (iv) Statement of Changes in Stockholders' Equity, (v) Statement of Cash Flows, and (vi) related Notes to Financial Statements.
10.1						Credit Agreement dated as of February 20, 2026, among Illinois Tool Works Inc., JPMorgan Chase Bank, N.A., as Agent, Citibank, N.A., as Syndication Agent, and a syndicate of Lenders (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-4797), filed on February 23, 2026).
101						The following financial and related information from the Illinois Tool Works Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 is formatted in Inline Extensible Business Reporting Language (iXBRL) and submitted electronically herewith: (i) Statement of Income, (ii) Statement of Comprehensive Income, (iii) Statement of Financial Position, (iv) Statement of Changes in Stockholders' Equity, (v) Statement of Cash Flows, and (vi) related Notes to Financial Statements.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Management contract or compensatory plan or arrangement.34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ILLINOIS TOOL WORKS INC.
Dated:	~~October~~May 247, ~~2025~~2026	By:	/s/ Randall J. Scheuneman
			Randall J. Scheuneman
			Vice President & Chief Accounting Officer
			(Principal Accounting Officer and Duly Authorized Officer)

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