What are the key non-GAAP financial measures ITW emphasizes?

ITW emphasizes Free Cash Flow (FCF) to show cash available for various corporate actions and After-tax Return on Invested Capital (After-tax ROIC) to demonstrate operational efficiency in generating profits from its capital investments. These measures are presented to offer investors a clearer view of the company's performance beyond standard GAAP metrics.

Where can I find the calculations and reconciliations for the non-GAAP measures?

The filing explicitly states that detailed reconciliations of the non-GAAP financial measures (like Free Cash Flow and After-tax ROIC) to their most comparable GAAP measures are included within the press release furnished as Exhibit 99.1.

Why did ITW adjust its 2024 diluted EPS?

For the twelve months ended December 31, 2024, ITW presented a non-GAAP diluted EPS that excluded the cumulative effect of a change in inventory accounting method and the impact from the sale of a noncontrolling interest in Wilsonart International Holdings LLC. This adjustment is intended to improve the comparability of its financial performance with other periods.

ITW 8-K: Earnings & Results

Q: What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to officially report Illinois Tool Works Inc.'s (ITW) fourth quarter and full-year 2025 financial results. The detailed information is provided in a press release furnished as Exhibit 99.1.

Summary

Illinois Tool Works Inc. (ITW) filed an 8-K on February 3, 2026, to report its fourth quarter and full-year 2025 financial results. The filing primarily refers to a press release (Exhibit 99.1) which details the company's operational performance and financial condition for the periods ending December 31, 2025. Investors should note that ITW emphasizes its use of non-GAAP financial measures, including Free Cash Flow and After-tax Return on Invested Capital (ROIC), to provide a clearer picture of operational efficiency and cash generation capabilities. The company uses these non-GAAP metrics to offer insights into its ability to generate cash for strategic initiatives like dividends, share repurchases, and acquisitions, as well as to assess the effectiveness of its capital deployment. The filing also mentions the presentation of adjusted diluted net income per share for the twelve months ended December 31, 2024, excluding certain discrete items and accounting changes to enhance comparability. Investors are encouraged to review the accompanying press release for detailed reconciliations and calculations of these non-GAAP measures.

Key Highlights

1ITW filed an 8-K on February 3, 2026, to report 2025 fourth quarter and full-year financial results.
2The report references Exhibit 99.1, a press release containing the detailed financial results and operational performance.
3The company prominently uses and explains non-GAAP financial measures, including Free Cash Flow (FCF) and After-tax Return on Invested Capital (ROIC).
4ITW highlights FCF as a key metric for assessing cash available for dividends, share repurchases, acquisitions, and debt repayment.
5After-tax ROIC is presented as a measure of operational effectiveness in generating profits from invested capital.
6The company adjusted its 2024 diluted EPS to exclude the impact of inventory accounting changes and a noncontrolling interest sale for enhanced comparability.
7Detailed reconciliations of non-GAAP measures to their closest GAAP equivalents are available in the furnished press release.

ILLINOIS TOOL WORKS INC 8-K Report, Financial Results (Feb 3, 2026)

Summary

Key Highlights

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