Business Context and Reporting Period
Company: Illinois Tool Works Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 28, 2026
Event: Announcement of 2026 Second Quarter results of operations.
Key Financial Metrics
The filing serves as a notification of the earnings announcement and defines specific non-GAAP measures used by management. Specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity are not contained within this Form 8-K text; they are referenced as being available in the press release furnished as Exhibit 99.1.
- Free Cash Flow: Defined as net cash provided by operating activities less additions to plant and equipment. Used to measure cash available for dividends, share repurchases, acquisitions, and debt repayment.
- After-tax ROIC: Defined as operating income after taxes divided by average invested capital (annualized for interim periods). Operating income after taxes excludes interest expense and other income/expense.
Material Changes and Adjustments
The filing details specific adjustments made to non-GAAP measures for comparability regarding discrete tax benefits:
- Q1 2026: Excluded a discrete tax benefit of $34 million from net income and the effective tax rate for the six months ended June 30, 2026.
- Q1 2025: Excluded a discrete tax benefit of $21 million from net income and the effective tax rate for the six months ended June 30, 2025, and the year ended December 31, 2025.
- Q3 2025: Excluded a net discrete tax benefit of $27 million from net income and the effective tax rate for the year ended December 31, 2025.
Guidance, Outlook, and Risks
The filing does not contain specific forward-looking guidance, management commentary on future outlook, or a discussion of risks and contingencies beyond the standard definitions of non-GAAP measures. The text notes that the Company believes these non-GAAP measures are useful for evaluating financial performance and the ability to generate cash internally.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated July 28, 2026) for actual Q2 2026 revenue, net income, and cash flow figures.
- Verify the reconciliation of Free Cash Flow to net cash provided by operating activities in the press release.
- Confirm the calculation of After-tax ROIC and the specific exclusions applied to operating income after taxes.
- Check the impact of the excluded discrete tax benefits ($34M in Q1 2026) on the reported effective tax rate versus the adjusted rate.