ILLINOIS TOOL WORKS INCITW

ILLINOIS TOOL WORKS INC Earnings Per Share Disclosure

10-KFiled Feb 13, 20261 min read
Net Income Per Share
Net income per basic share is computed by dividing net income by the weighted-average number of shares outstanding for the period. Net income per diluted share is computed by dividing net income by the weighted-average number of shares assuming dilution for stock options and restricted stock units. Dilutive shares reflect the potential additional shares that would be outstanding if the dilutive stock options outstanding were exercised and the unvested restricted stock units vested during the period. The computation of net income per share for the twelve months ended December 31, 2025, 2024 and 2023 was as follows:

In millions except per share amounts202520242023
Net Income$3,066 $3,488 $2,957 
Net income per share—Basic:
Weighted-average common shares291.5 296.8 302.6 
Net income per share—Basic$10.52 $11.75 $9.77 
Net income per share—Diluted:
Weighted-average common shares291.5 296.8 302.6 
Effect of dilutive stock options and restricted stock units0.8 1.0 1.0 
Weighted-average common shares assuming dilution292.3 297.8 303.6 
Net income per share—Diluted$10.49 $11.71 $9.74 

Options that were considered antidilutive were not included in the computation of diluted net income per share. There were 0.4 million, 0.2 million and 0.3 million antidilutive options outstanding for the twelve months ended December 31, 2025, 2024 and 2023, respectively.

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

Income TaxesRevenuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew Standards