ILLINOIS TOOL WORKS INCITW
ILLINOIS TOOL WORKS INC Segments Disclosure
Segment Information
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. Businesses in this segment produce components and fasteners for automotive-related applications.
Food Equipment— This segment is a highly focused and branded industry leader in commercial food equipment differentiated by innovation and integrated service offerings.
Test & Measurement and Electronics— This segment is a branded and innovative producer of test and measurement and electronic manufacturing and MRO solutions that improve efficiency and quality for customers in diverse end markets. Businesses in this segment produce equipment, consumables, and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics.
Welding— This segment is a branded value-added equipment and specialty consumable manufacturer with innovative and leading technology. Businesses in this segment produce arc welding equipment, consumables and accessories for a wide array of industrial and commercial applications.
Polymers & Fluids— This segment is a branded supplier to niche markets that require value-added, differentiated products. Businesses in this segment produce engineered adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance.
Construction Products— This segment is a branded supplier of innovative engineered fastening systems and solutions.
Specialty Products— This segment is focused on diversified niche market opportunities with substantial patent protection producing beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners.
The Company's chief operating decision maker ("CODM") is the President & Chief Executive Officer. The CODM primarily uses operating revenue, operating income and related operating margins in assessing the current and expected long-term performance of the Company's segments, including the application of the Company's enterprise strategies which focus on profitable growth and continuous improvement to margins and returns through the application of the Company's business model. Operating income and margins are also used by the CODM when evaluating segment investments in capital projects and restructuring initiatives. The CODM regularly reviews summarized financial information related to segment operating revenue, variable margins, overhead expenses, operating income and operating margins as compared to forecasted results.
The accounting policies for the Company's segments are the same as the policies described in Note 1. Description of Business and Summary of Significant Accounting Policies. Intersegment sales transactions are accounted for at prices consistent with sales to third parties and are not considered material. Segments are allocated a fixed overhead charge for general corporate administrative expenses based on a percentage of the segment's operating revenue. Expenses not allocated to the segments are reported separately as Unallocated. Because the Unallocated category includes a variety of items, it is subject to fluctuations on a quarterly and annual basis.
Segment operating revenue, significant expenses and operating income for 2025, 2024 and 2023 was as follows:
| In millions | 2025 | 2024 | 2023 | ||||||||||||||
| Operating revenue: | |||||||||||||||||
| Automotive OEM | $ | 3,288 | $ | 3,188 | $ | 3,235 | |||||||||||
| Food Equipment | 2,699 | 2,647 | 2,622 | ||||||||||||||
| Test & Measurement and Electronics | 2,825 | 2,818 | 2,832 | ||||||||||||||
| Welding | 1,890 | 1,851 | 1,902 | ||||||||||||||
| Polymers & Fluids | 1,765 | 1,764 | 1,804 | ||||||||||||||
| Construction Products | 1,820 | 1,909 | 2,033 | ||||||||||||||
| Specialty Products | 1,775 | 1,743 | 1,697 | ||||||||||||||
| Total segments | 16,062 | 15,920 | 16,125 | ||||||||||||||
| Intersegment revenue | (18) | (22) | (18) | ||||||||||||||
| Operating Revenue | $ | 16,044 | $ | 15,898 | $ | 16,107 | |||||||||||
| Variable cost of revenue: | |||||||||||||||||
| Automotive OEM | $ | 1,790 | $ | 1,781 | $ | 1,869 | |||||||||||
| Food Equipment | 1,241 | 1,228 | 1,222 | ||||||||||||||
| Test & Measurement and Electronics | 1,216 | 1,206 | 1,267 | ||||||||||||||
| Welding | 839 | 838 | 892 | ||||||||||||||
| Polymers & Fluids | 835 | 847 | 877 | ||||||||||||||
| Construction Products | 814 | 890 | 984 | ||||||||||||||
| Specialty Products | 821 | 814 | 833 | ||||||||||||||
| Total segments | $ | 7,556 | $ | 7,604 | $ | 7,944 | |||||||||||
| Overhead expenses: | |||||||||||||||||
| Automotive OEM | $ | 805 | $ | 782 | $ | 805 | |||||||||||
| Food Equipment | 705 | 700 | 687 | ||||||||||||||
| Test & Measurement and Electronics | 915 | 909 | 879 | ||||||||||||||
| Welding | 430 | 416 | 405 | ||||||||||||||
| Polymers & Fluids | 437 | 433 | 445 | ||||||||||||||
| Construction Products | 456 | 460 | 471 | ||||||||||||||
| Specialty Products | 401 | 401 | 415 | ||||||||||||||
| Total segments | $ | 4,149 | $ | 4,101 | $ | 4,107 | |||||||||||
| Operating income: | |||||||||||||||||
| Automotive OEM | $ | 693 | $ | 625 | $ | 561 | |||||||||||
| Food Equipment | 753 | 719 | 713 | ||||||||||||||
| Test & Measurement and Electronics | 694 | 703 | 686 | ||||||||||||||
| Welding | 621 | 597 | 605 | ||||||||||||||
| Polymers & Fluids | 493 | 484 | 482 | ||||||||||||||
| Construction Products | 550 | 559 | 578 | ||||||||||||||
| Specialty Products | 553 | 528 | 449 | ||||||||||||||
| Total segments | 4,357 | 4,215 | 4,074 | ||||||||||||||
| Unallocated | (141) | 49 | (34) | ||||||||||||||
| Operating Income | 4,216 | 4,264 | 4,040 | ||||||||||||||
| Interest expense | (292) | (283) | (266) | ||||||||||||||
| Other income (expense) | 42 | 441 | 49 | ||||||||||||||
| Income Before Taxes | $ | 3,966 | $ | 4,422 | $ | 3,823 | |||||||||||
Unallocated expenses in 2025 included higher health and welfare expenses and insurance-related expenses as compared to the prior year. Unallocated expenses in 2024 included the favorable pre-tax cumulative effect of the LIFO accounting method change of $117 million in the first quarter of 2024. Refer to Note 1. Description of Business and Summary of Significant Accounting Policies for additional information regarding this change in accounting method.
Segment depreciation and amortization and impairment of intangible assets for 2025, 2024 and 2023 was as follows:
| In millions | 2025 | 2024 | 2023 | ||||||||||||||
| Depreciation and amortization and impairment of intangible assets: | |||||||||||||||||
| Automotive OEM | $ | 136 | $ | 129 | $ | 123 | |||||||||||
| Food Equipment | 41 | 46 | 41 | ||||||||||||||
| Test & Measurement and Electronics | 73 | 82 | 80 | ||||||||||||||
| Welding | 36 | 33 | 29 | ||||||||||||||
| Polymers & Fluids | 41 | 42 | 46 | ||||||||||||||
| Construction Products | 32 | 33 | 33 | ||||||||||||||
| Specialty Products | 38 | 37 | 43 | ||||||||||||||
| Total | $ | 397 | $ | 402 | $ | 395 | |||||||||||
Asset and capital expenditure information by segment is not regularly provided to or reviewed by the CODM and is therefore not disclosed.
Enterprise-wide information for the twelve months ended December 31, 2025, 2024 and 2023 was as follows:
| In millions | 2025 | 2024 | 2023 | ||||||||||||||
| Operating Revenue by Geographic Region: | |||||||||||||||||
| United States | $ | 7,395 | $ | 7,374 | $ | 7,576 | |||||||||||
| Canada/Mexico | 1,085 | 1,156 | 1,146 | ||||||||||||||
| Total North America | 8,480 | 8,530 | 8,722 | ||||||||||||||
| Europe, Middle East and Africa | 4,162 | 4,101 | 4,147 | ||||||||||||||
| Asia Pacific | 3,079 | 2,961 | 2,935 | ||||||||||||||
| South America | 323 | 306 | 303 | ||||||||||||||
| Total operating revenue | $ | 16,044 | $ | 15,898 | $ | 16,107 | |||||||||||
Operating revenue by geographic region is based on the customers' locations. The Company had approximately 40% and 44% of its total net plant and equipment in the United States as of December 31, 2025 and 2024, respectively. Additionally, the Company had 16% and 16% of its total net plant and equipment in China as of December 31, 2025 and 2024, respectively. No other country represented more than 10% of the Company's net plant and equipment as of December 31, 2025 and 2024. No single customer accounted for more than 5% of consolidated revenues for the twelve months ended December 31, 2025, 2024 or 2023.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 9, 2024 | |
| 2022 | Feb 10, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 10, 2017 | |
| 2015 | Feb 12, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.