itw-20230930

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 30, 2023

	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
0.250% Euro Notes due 2024	ITW24A	New York Stock Exchange
0.625% Euro Notes due 2027	ITW27	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
3.00% 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	☐
		Emerging growth company	☐

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 30, 2023: 300,885,880


	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	15
I tem 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34

	PART II - Other Information

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	36
Item 6.	Exhibits	37

Signatures		38

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,				September 30,
In millions except per share amounts	2023		2022		2023		2022
Operating Revenue	$	4,031	$	4,011	$	12,124	$	11,961
Cost of revenue	2,319		2,371		7,004		7,120
Selling, administrative, and research and development expenses	615		624		1,980		1,935
Amortization and impairment of intangible assets	27		33		88		102
Operating Income	1,070		983		3,052		2,804
Interest expense	(67)		(52)		(196)		(147)
Other income (expense)	10		26		40		64
Income Before Taxes	1,013		957		2,896		2,721
Income Taxes	241		230		656		594
Net Income	$	772	$	727	$	2,240	$	2,127

Net Income Per Share:
Basic	$	2.55	$	2.36	$	7.38	$	6.85
Diluted	$	2.55	$	2.35	$	7.36	$	6.83

Shares of Common Stock Outstanding During the Period:
Average	301.9		308.8		303.4		310.6
Average assuming dilution	303.0		309.7		304.5		311.6

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,				September 30,
In millions	2023		2022		2023		2022
Net Income	$	772	$	727	$	2,240	$	2,127

Foreign currency translation adjustments, net of tax	(82)		(210)		(61)		(394)
Pension and other postretirement benefit adjustments, net of tax	—		5		—		14
Other comprehensive income (loss)	(82)		(205)		(61)		(380)

Comprehensive Income	$	690	$	522	$	2,179	$	1,747

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 30, 2023		December 31, 2022
Assets
Current Assets:
Cash and equivalents	$	990	$	708
Trade receivables	3,163		3,171
Inventories	1,799		2,054
Prepaid expenses and other current assets	336		329
Assets held for sale	—		8
Total current assets	6,288		6,270

Net plant and equipment	1,904		1,848
Goodwill	4,828		4,864
Intangible assets	682		768
Deferred income taxes	455		494
Other assets	1,238		1,178
	$	15,395	$	15,422

Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt	$	1,248	$	1,590

SEC Form 10-Q filed by Illinois Tool Works Inc.