← All companies ← ITT Manual IVT → ← ITT Industrial Machinery JBT →

ITW, Illinois Tool Works Inc.

Illinois Tool Works Inc. is a global manufacturer of a diversified range of industrial products and equipment with 88 divisions in 49 countries.

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: 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.

Latest annual: FY2025 10-K

ITW · Illinois Tool Works Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$16.0B

+0.9% YoY · 5% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $16.5B 5-yr avg $15.7B

Gross margin 44% 5-yr avg 43%

Operating margin 26.5% 5-yr avg 25.2%

ROIC 29% 5-yr avg 30%

Owner-earnings margin 18% 5-yr avg 17%

Free cash flow margin 18% 5-yr avg 16%

Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~32 days after · the wire records it on arrival

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Gross margin has run about 42% and operating margin about 24% through the cycle, a solid spread between what it charges and what the product costs to make. That margin has stayed fairly steady relative to where it runs (22%–27% over the years), so unit growth and cost discipline, not a moving line, are the lever. Read this kind of business on the capital-goods cycle and the aftermarket. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 29%, above 15% in 10 of 10 years). Owner earnings agree: roughly 17% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

54% of revenue comes from outside the United States.

Revenue by geography, FY2025

United States46%$7.4B
EMEA26%$4.2B
Asia Pacific19%$3.1B
Canada/Mexico7%$1.1B
South America2%$323M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMJun 2026
											Income statement
$13.6B	$14.3B	$14.8B	$14.1B	$12.6B	$14.5B	$15.9B	$16.1B	$15.9B	$16.0B	$16.5B	RevenueRevenue
$5.7B	$6.0B	$6.2B	$5.9B	$5.2B	$6.0B	$6.5B	$6.8B	$7.0B	$7.1B	$7.3B	Gross profitGross prof.
42%	42%	42%	42%	41%	41%	41%	42%	44%	44%	44%	Gross marginGross mgn
2%	2%	2%	2%	2%	2%	2%	2%	2%	2%	2%	R&D / revenueR&D/rev
$3.1B	$3.5B	$3.6B	$3.4B	$2.9B	$3.5B	$3.8B	$4.0B	$4.3B	$4.2B	$4.4B	Operating incomeOp. inc.
22.5%	24.3%	24.3%	24.1%	22.9%	24.1%	23.8%	25.1%	26.8%	26.3%	26.5%	Operating marginOp. mgn
$2.9B	$3.3B	$3.4B	$3.3B	$2.7B	$3.3B	$3.8B	$3.8B	—	—	—	Pretax incomePretax
$2.0B	$1.7B	$2.6B	$2.5B	$2.1B	$2.7B	$3.0B	$3.0B	$3.5B	$3.1B	$3.2B	Net incomeNet inc.
30%	48%	24%	23%	22%	19%	21%	23%	21%	23%	22%	Effective tax rateTax rate
											Cash flow & returns
$2.3B	$2.4B	$2.8B	$3.0B	$2.8B	$2.6B	$2.3B	$3.5B	$3.3B	$3.1B	$3.3B	Operating cash flowOp. cash
$246M	$256M	$272M	$267M	$273M	$277M	$276M	$282M	$301M	$317M	$328M	DepreciationDeprec.
($18M)	$423M	($64M)	$166M	$383M	($467M)	($1.0B)	$231M	($569M)	($326M)	($266M)	Working capital & otherWC & other
$273M	$297M	$364M	$326M	$236M	$296M	$412M	$455M	$437M	$419M	$409M	CapexCapex
2.0%	2.1%	2.5%	2.3%	1.9%	2.0%	2.6%	2.8%	2.7%	2.6%	2.5%	Capex / revenueCapex/rev
$2.0B	$2.1B	$2.5B	$2.7B	$2.6B	$2.3B	$2.1B	$3.3B	$3.0B	$2.8B	$2.9B	Owner earningsOwner earn.
14.9%	14.7%	17.2%	18.9%	20.4%	15.6%	13.0%	20.2%	18.7%	17.5%	17.7%	Owner earnings marginOE mgn
$2.0B	$2.1B	$2.4B	$2.7B	$2.6B	$2.3B	$1.9B	$3.1B	$2.8B	$2.7B	$2.9B	Free cash flowFCF
14.9%	14.7%	16.6%	18.9%	20.4%	15.6%	12.2%	19.1%	17.9%	16.9%	17.7%	Free cash flow marginFCF mgn
$453M	$3M	$0	$4M	$0	$731M	$2M	$0	$115M	$119M	$120M	AcquisitionsAcquis.
$821M	$941M	$1.1B	$1.3B	$1.4B	$1.5B	$1.5B	$1.6B	$1.7B	$1.8B	$1.8B	Dividends paidDiv. paid
$2.0B	$1.0B	$2.0B	$1.5B	$706M	$1.0B	$1.8B	$1.5B	$1.5B	$1.5B	—	BuybacksBuybacks
($532M)	($251M)	($325M)	($183M)	($214M)	($984M)	($110M)	($403M)	($144M)	($521M)	—	Investing cash flowInv. cash
($2.3B)	($1.7B)	($4.0B)	($2.3B)	($2.0B)	($2.6B)	($3.0B)	($2.8B)	($3.2B)	($2.7B)	—	Financing cash flowFin. cash
($133M)	$145M	($112M)	($9M)	$39M	($46M)	($57M)	$3M	($65M)	$42M	—	Exchange-rate effectFX
($618M)	$622M	($1.6B)	$477M	$583M	($1.0B)	($819M)	$357M	($117M)	($97M)	—	Change in cashΔ cash
22%	20%	30%	30%	26%	29%	30%	31%	33%	29%	29%	ROICROIC
48%	37%	79%	83%	66%	74%	98%	98%	105%	95%	110%	Return on equityROE
29%	16%	44%	40%	23%	34%	48%	45%	54%	40%	47%	Retained to equityRetained/eq
											Balance sheet
$2.5B	$3.1B	$1.5B	$2.0B	$2.6B	$1.5B	$708M	$1.1B	$948M	$851M	$839M	Cash & investmentsCash+inv
$2.4B	$2.6B	$2.6B	$2.5B	$2.5B	$2.8B	$3.2B	$3.1B	$3.0B	$3.2B	$3.6B	ReceivablesReceiv.
$1.1B	$1.2B	$1.3B	$1.2B	$1.2B	$1.7B	$2.1B	$1.7B	$1.6B	$1.7B	$1.8B	InventoryInvent.
$511M	$590M	$524M	$472M	$534M	$585M	$594M	$581M	$519M	$522M	$636M	Accounts payablePayables
$2.9B	$3.3B	$3.4B	$3.2B	$3.2B	$3.9B	$4.6B	$4.2B	$4.1B	$4.4B	$4.7B	Operating working capitalOper. WC
$6.1B	$7.3B	$5.8B	$6.3B	$6.5B	$6.4B	$6.3B	$6.2B	$5.9B	$6.2B	$6.6B	Current assetsCur. assets
$2.8B	$3.1B	$3.5B	$2.2B	$2.6B	$3.5B	$4.5B	$4.7B	$4.3B	$5.1B	$6.0B	Current liabilitiesCur. liab.
2.2×	2.4×	1.6×	2.9×	2.5×	1.8×	1.4×	1.3×	1.4×	1.2×	1.1×	Current ratioCurr. ratio
$1.7B	$1.8B	$1.8B	$1.7B	$1.8B	$1.8B	$1.8B	$2.0B	$2.0B	$2.2B	—	Net PP&ENet PP&E
$4.6B	$4.8B	$4.6B	$4.5B	$4.7B	$5.0B	$4.9B	$4.9B	$4.8B	$5.1B	$5.1B	GoodwillGoodwill
$15.2B	$16.8B	$14.9B	$15.1B	$15.6B	$16.1B	$15.4B	$15.5B	$15.1B	$16.1B	$16.5B	Total assetsAssets
$7.8B	$7.5B	$7.4B	$7.8B	$8.1B	$7.7B	$7.8B	$8.2B	$7.9B	$9.0B	$9.7B	Total debtDebt
$5.4B	$4.4B	$5.9B	$5.8B	$5.6B	$6.2B	$7.1B	$7.1B	$6.9B	$8.1B	$8.9B	Net debt / (cash)Net debt
12.9×	13.4×	13.9×	15.4×	14.0×	17.2×	18.7×	15.2×	15.1×	14.4×	14.5×	Interest coverageInt. cov.
$4.3B	$4.6B	$3.3B	$3.0B	$3.2B	$3.6B	$3.1B	$3.0B	$3.3B	$3.2B	$2.9B	Shareholders’ equityEquity
0.3%	0.3%	0.3%	0.3%	0.3%	0.4%	0.4%	0.4%	0.4%	0.4%	0.4%	Stock comp / revenueSBC/rev
											Per share
357M	347M	337M	326M	318M	316M	311M	304M	298M	292M	288M	Shares out (diluted)Shares
$38.08	$41.27	$43.81	$43.33	$39.50	$45.69	$51.28	$53.05	$53.38	$54.89	$57.16	Revenue / shareRev/sh
$5.70	$4.86	$7.60	$7.74	$6.63	$8.51	$9.77	$9.74	$11.71	$10.49	$11.09	EPS (diluted)EPS
$5.68	$6.07	$7.53	$8.20	$8.08	$7.15	$6.67	$10.73	$10.01	$9.61	$10.14	Owner earnings / shareOE/sh
$5.68	$6.07	$7.26	$8.20	$8.08	$7.15	$6.23	$10.16	$9.55	$9.26	$10.14	Free cash flow / shareFCF/sh
$2.30	$2.71	$3.33	$4.06	$4.33	$4.62	$4.96	$5.32	$5.69	$6.11	$6.36	Dividends / shareDiv/sh
$0.76	$0.86	$1.08	$1.00	$0.74	$0.94	$1.33	$1.50	$1.47	$1.43	$1.42	Cap. spending / shareCapex/sh
$11.93	$13.23	$9.66	$9.31	$10.00	$11.46	$9.94	$9.92	$11.14	$11.04	$10.05	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+4.1%/yr	+6.8%/yr
Owner earnings / share	+6.0%/yr	+3.5%/yr
EPS	+7.0%/yr	+9.6%/yr
Dividends / share	+11.5%/yr	+7.1%/yr
Capital spending / share	+7.2%/yr	+14.1%/yr
Book value / share	−0.9%/yr	+2.0%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Operating income-1.1%
“Operating income $ 484 $ 482 0.4 % 3.7 % — % 0.9 % (4.2) % 0.4 % Operating margin % 27.4 % 26.7 % 70 bps 80 bps — 20 bps (30) bps 70 bps •Operating revenue decreased due to the unfavorable effect of foreign currency translation, partially offset by higher organic revenue. •Organic revenue grew 0.9% due to increases in South America, Europe and Asia Pacific, partially offset by a decrease in North America.”
✓ figure matches the filed record
Asia Pacific+4.0%
“Asia Pacific organic revenue declined 9.2% primarily due to lower demand in the Australia and New Zealand residential end markets. •Operating margin of 29.3% increased 90 basis points primarily driven by benefits from the Company's enterprise initiatives and favorable price/cost of 10 basis points, partially offset by unfavorable operating leverage of 110 basis points, higher employee-related expenses and higher restructuring expenses.”
✓ direction matches the filed record

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $2.8B of owner earnings, the operating cash left after the $317M it takes just to hold its position. It put $102M more into growth; free cash flow, after that spending, was $2.7B.

Reported net income$3.1B

Owner earnings$2.8B · 18% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$3.1B	$3.5B	$3.0B	$3.0B	$2.7B
Depreciationnon-cash charge added back	+$317M	+$301M	+$282M	+$276M	+$277M
Stock-based compensationreal costnon-cash, but a real cost	+$69M	+$61M	+$69M	+$63M	+$53M
Working capital & othertiming of cash in and out, other non-cash items	−$326M	−$569M	+$231M	−$1.0B	−$467M
Cash from operations	$3.1B	$3.3B	$3.5B	$2.3B	$2.6B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$317M	−$301M	−$282M	−$276M	−$296M
Owner earnings	$2.8B	$3.0B	$3.3B	$2.1B	$2.3B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$102M	−$136M	−$173M	−$136M	—
Free cash flow	$2.7B	$2.8B	$3.1B	$1.9B	$2.3B
Owner-earnings marginowner earnings ÷ revenue	18%	19%	20%	13%	16%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $317M, roughly its depreciation, the rate its assets wear out). The other $102M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $69M), owner earnings is nearer $2.7B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 14.4×

Comfortable

Operating income $4.2B ÷ interest expense $292M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $8.1B · 1.9× operating profit

Modest net debt

Cash $851M − debt $9.0B

What this means
Netting $851M of cash and short-term investments against $9.0B of debt leaves $8.1B owed, about 1.9× a year's operating profit (2.1× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 120d

Long (60+ days)

DSO 73 + DIO 68 − DPO 21 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 29%

Very high (≥25%) through the cycle

10-yr median, range 20%–33%; 29% latest = NOPAT $3.3B ÷ invested capital $11.3B

Industry peers: median 9%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 29% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 17%

High through the cycle

10-yr median margin, range 13%–20%; latest $2.8B = operating cash $3.1B − maintenance capex $317M

Industry peers: median 10%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 18% of revenue this year, a 17% median across 10 years. Treating stock comp as the real expense it is (less $69M of SBC) leaves $2.7B.
Are earnings backed by cash? 1.02×

Cash-backed

Cash from ops $3.1B ÷ net income $3.1B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 117%

Returned more than it generated

Dividends + buybacks $3.3B ÷ Owner Earnings $2.8B — this fiscal year

What this means
The company returned more than it generated: against $2.8B of Owner Earnings, $3.3B (117%) went back to shareholders, $1.8B dividends, $1.5B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $69M stock comp, the real buyback was about $1.4B. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands. This year's proportion is 117%; across the record (2016–2025) it is 111%, the capital-allocation section below.
Investing or harvesting? 1.32×

Expanding

Capex $419M ÷ property depreciation $317M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

The promise and the pay packet

Is the buyback buying ownership, or mopping up? 0.4%

The count is genuinely shrinking

Stock compensation $69M (fiscal 2025), 0.4% of revenue · repurchases $1.5B · diluted shares -5.9% since 2022

What this means
Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $16.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.21×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $9.0B vs $1.1B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +51%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $11.13/share (latest year $10.77), the averaged base the calculator's gate runs on, and book value is $11.33/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 10 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 24% → 26% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 24% early to 26% lately, median 24% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +4%/yr

What this means
Owner earnings grew about 4% a year over the record.
Worst year 2016 · 22.5% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −2.2%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Jun 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$6.6B

Cash & short-term investments$839M
Receivables$3.6B
Inventory$1.8B
Other current assets$441M

Current liabilities$6.0B

Debt due within a year$3.1B
Accounts payable$636M
Other current liabilities$2.2B

Current ratio1.11×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.81×stricter: inventory excluded

Cash ratio0.14×strictest: cash alone against what's due

Working capital$647Mthe cushion left after near-term bills

Debt due this year vs. cash$3.1B due · $839M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Jun 30, 2026 balance sheet

Revenue, latest quarter vs. a year ago+6.1%the freshest read on whether the business is still growing

Current ratio, recent quarters1.4× → 1.1×

Deeper floors

Tangible book value($2.7B)equity stripped of goodwill & intangibles

Debt incl. operating leases$9.9B$242M of it operating leases

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$999M

'27$1.5B

'28$759M

'29$0

'30$585M

Bars scaled to the largest single year.

Due in the next 12 months$999Mthe first rung: what must be repaid or rolled over within the year

Within two years$2.5Bthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.5Bin 2027the lumpiest maturity, where a refinancing, if needed, is largest

Due over the next five years$3.8Bthe near slice; the balance sheet carries $9.0B of debt in all

Against what the business has and earns

Cash & short-term investments, Jun 30, 2026$839M

One year of owner earnings (FY2025)$2.8B

Together, against $999M due next year3.7×

Cash on hand as of Jun 30, 2026 plus a year’s owner earnings comes to $3.6B against the $999M due in the twelve months after the Dec 31, 2025 schedule: 3.7 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

How the cash was used, 2016–2025

Over the record, the business generated $28.2B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$3.5B · 12%
Dividends$13.7B · 49%
Buybacks$14.5B · 51%

Returned to owners$28.1B
111% of the owner earnings the business produced over the span, $13.7B as dividends and $14.5B as buybacks.
Source of funding−$3.5B
Reinvestment and shareholder returns ran $3.5B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $7.8B to $9.7B, and cash and short-term investments drew down $1.6B.
Average price paid for buybacks—
Buybacks ran $14.5B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−19.3%
The diluted count fell from 357M to 288M, so the buybacks outran the stock issued to staff.
Dividend record$6.11/sh
Paid in 10 of the years on record, the per-share dividend growing about 11% a year. It was never cut over the span.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$5.7B35% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$7.0Bover 19 years since fiscal 2007 buying other businesses, against $3.5B of capital spent building over the 10-year record

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Beside that spending sits $1.9B of cumulative amortization of acquired intangibles charged against earnings since fiscal 2007 — the purchase price of past deals, expensed over time.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and amortization summed across the company's full tagged history, write-downs across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	E. Scott Santi	$20.8M	$41.8M	$2.3B
2022	—	$22.2M	$18.7M	$2.1B
2023	—	$22.5M	$34.8M	$3.3B
2024	Christopher A. O’Herlihy	$10.9M	$11.0M	$3.0B
2025	—	$15.2M	$14.9M	$2.8B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years. A dash under the name means the filing tags the figure without naming the officer.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio208:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$69M
The slice of the business handed to employees in shares in fiscal 2025, 0.4% of revenue, equal to 1.6% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Peers, Industrial Machinery

The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.

Company	Revenuelatest FY, USD	Gross marginmedian over the record	Op. marginmedian over the record	ROICmedian over the record	Owner earn. marginmedian over the record
ITWIllinois Tool Works Inc.	$16.0B	42%	24.2%	29%	17%
KNEBVKONE Oyj	$13.1B	—	11.6%	38%	10%
XYLXylem Inc. Common Stock New	$9.0B	38%	11.3%	9%	10%
IRIngersoll Rand Inc.	$7.7B	39%	12.4%	6%	15%
RRXRegal Rexnord Corporation	$5.9B	28%	9.9%	7%	9%
ZBRAZebra Technologies	$5.4B	47%	13.7%	13%	15%
GTESGates Industrial	$3.4B	39%	13.1%	8%	9%
EFXTEnerflex Ltd	$2.6B	21%	7.2%	7%2y	13%
Group median	—	39%	12.0%	8%	11%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Illinois Tool Works Inc. has delivered.

Today’s price $

Through the cycle, Illinois Tool Works Inc. earns about $2.8B on its 17.4% median owner-earnings margin. This year’s 17.5% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($2.8B) Net of stock comp (−$74M TTM) Steady-state · maintenance capex ($3.0B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.71% 10-year Treasury (Aug 18, 2026) + 4.29 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+8%/yr

Owner-earnings growth · ’16→’25+3%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.71%, as of Aug 18, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $2.9B on 285M shares outstanding, per the 10-Q cover, as of 2026-06-30; net debt $8.9B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($409M) runs well above depreciation ($328M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $3.0B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh ITW against another business →

The owners of ITW: the meeting and the votes →

Cite: Owner Scorecard, "Illinois Tool Works Inc. (ITW), the owner's record," https://ownerscorecard.com/c/ITW, data as of 2026-08-17.

Manual order: ← ITT its page in the Manual IVT →

Industry order: ← ITT the Industrial Machinery chapter JBT →