ILLINOIS TOOL WORKS INC 8-K

What Happened

• Illinois Tool Works Inc. (ITW) announced its results for the second quarter of 2026 in a press release dated July 28, 2026 (furnished as Exhibit 99.1 to the Form 8‑K). The filing emphasizes the Company’s use of certain non‑GAAP financial measures to help evaluate cash generation and return on invested capital.

Key Details

• The press release includes a reconciliation of free cash flow to net cash provided by operating activities; ITW defines free cash flow as net cash provided by operating activities less additions to plant and equipment.
• ITW uses free cash flow and free cash flow to net income conversion rate to assess cash available for dividends, share repurchases, acquisitions and debt repayment.
• ITW defines After‑tax ROIC as operating income after taxes divided by average invested capital (annualized for interim periods); operating income after taxes excludes interest and other non‑operating items.
• For comparability, ITW excluded discrete tax benefits from net income: $34 million in Q1 2026, $21 million in Q1 2025, and a net $27 million in Q3 2025 in calculating After‑tax ROIC and related metrics.

Why It Matters

• These disclosures show ITW is emphasizing cash‑generation and capital‑efficiency metrics (free cash flow and After‑tax ROIC) that investors use to judge the company’s ability to fund dividends, buybacks, acquisitions and debt repayment. The reconciliation and the disclosed tax‑adjustments help users compare results across periods, but the measures are non‑GAAP and may be calculated differently by other companies.