Illinois Tool Works Inc. Reports Fourth Quarter and Full Year 2025 Financial Results with Record Operating Margins

Illinois Tool Works reported Q4 2025 revenue of $4.1 billion, a 4.1% increase, with GAAP EPS rising 7%.

Quiver AI Summary

Illinois Tool Works Inc. reported a 4.1% increase in fourth quarter revenue, reaching $4.1 billion, and a 7% rise in GAAP EPS to $2.72, indicating a strong finish to 2025. For the full year, revenue rose to $16 billion, up 0.9%, with Customer-Back Innovation contributing significantly to growth. The company achieved an operating margin of 26.3% and exceeded EPS guidance at $10.49. Looking ahead to 2026, ITW forecasts revenue growth of 2 to 4%, a GAAP EPS target between $11.00 and $11.40, and plans to enhance operating margins, with expectations for all segments to report positive growth. The company also intends to repurchase approximately $1.5 billion of its shares.

Potential Positives

Fourth quarter revenue of $4.1 billion reflects a 4.1% year-over-year increase, showcasing resilient performance.
GAAP EPS increased by 7% to $2.72, exceeding prior guidance, indicating strong profitability.
Operating margin expanded to 26.5%, demonstrating improved efficiency and successful execution of enterprise initiatives.
2026 guidance projects GAAP EPS growth of 7% from the prior year and expects all segments to deliver positive organic growth, suggesting confidence in future performance.

Potential Negatives

Organic revenue growth was flat for the full year 2025, indicating potential weaknesses in underlying demand.
Guidance for 2026 indicates a slower revenue growth projection of only 2% to 4%, which may suggest challenges in maintaining growth momentum.
Amortization expenses from acquisition-related intangible assets had an unfavorable impact on GAAP earnings per share, affecting overall profitability.

FAQ

What were Illinois Tool Works' Q4 2025 revenue figures?

Illinois Tool Works reported fourth quarter 2025 revenue of $4.1 billion, reflecting a 4.1% increase.

How much did GAAP EPS increase in 2025?

GAAP EPS for 2025 was $10.49, marking a 7% increase compared to the previous year.

What is the 2026 revenue growth projection for ITW?

ITW projects 2026 revenue growth between 2 to 4% with organic growth of 1 to 3%.

What drove ITW's revenue growth in 2025?

Customer-Back Innovation initiatives contributed 2.4% to revenue growth in 2025.

How does ITW plan to manage share repurchases in 2026?

ITW intends to repurchase approximately $1.5 billion of its own shares in 2026.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

$ITW Insider Trading Activity

$ITW insiders have traded $ITW stock on the open market 3 times in the past 6 months. Of those trades, 1 have been purchases and 2 have been sales.

Here’s a breakdown of recent trading of $ITW stock by insiders over the last 6 months:

RANDALL J SCHEUNEMAN (VP & Chief Accounting Officer) sold 6,802 shares for an estimated $1,803,074
DAVID BYRON JR SMITH purchased 6,709 shares for an estimated $1,678,122
PAMELA B STROBEL sold 1,521 shares for an estimated $373,025

To track insider transactions, check out Quiver Quantitative's insider trading dashboard.

$ITW Revenue

$ITW had revenues of $4.1B in Q3 2025. This is an increase of 2.34% from the same period in the prior year.

You can track ITW financials on Quiver Quantitative's ITW stock page.

$ITW Congressional Stock Trading

Members of Congress have traded $ITW stock 4 times in the past 6 months. Of those trades, 2 have been purchases and 2 have been sales.

Here’s a breakdown of recent trading of $ITW stock by members of Congress over the last 6 months:

REPRESENTATIVE RICHARD MCCORMICK purchased up to $15,000 on 11/05.
REPRESENTATIVE LISA C. MCCLAIN has traded it 3 times. They made 1 purchase worth up to $15,000 on 10/30 and 2 sales worth up to $30,000 on 10/31, 10/30.

To track congressional stock trading, check out Quiver Quantitative's congressional trading dashboard.

$ITW Hedge Fund Activity

We have seen 692 institutional investors add shares of $ITW stock to their portfolio, and 869 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

UBS AM, A DISTINCT BUSINESS UNIT OF UBS ASSET MANAGEMENT AMERICAS LLC added 1,240,175 shares (+51.8%) to their portfolio in Q3 2025, for an estimated $323,388,033
BLACKROCK, INC. removed 786,555 shares (-3.6%) from their portfolio in Q3 2025, for an estimated $205,102,081
ROYAL BANK OF CANADA added 408,297 shares (+67.9%) to their portfolio in Q3 2025, for an estimated $106,467,525
WORLDQUANT MILLENNIUM ADVISORS LLC added 331,007 shares (+2116.4%) to their portfolio in Q3 2025, for an estimated $86,313,385
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC added 316,512 shares (+293.0%) to their portfolio in Q3 2025, for an estimated $82,533,669
SG AMERICAS SECURITIES, LLC added 278,085 shares (+316.3%) to their portfolio in Q4 2025, for an estimated $68,492,335
MILLENNIUM MANAGEMENT LLC added 251,833 shares (+229.1%) to their portfolio in Q3 2025, for an estimated $65,667,973

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

$ITW Analyst Ratings

Wall Street analysts have issued reports on $ITW in the last several months. We have seen 0 firms issue buy ratings on the stock, and 3 firms issue sell ratings.

Here are some recent analyst ratings:

Wells Fargo issued a "Underweight" rating on 01/07/2026
Goldman Sachs issued a "Sell" rating on 12/16/2025
Barclays issued a "Underweight" rating on 10/27/2025

To track analyst ratings and price targets for $ITW, check out Quiver Quantitative's $ITW forecast page.

$ITW Price Targets

Multiple analysts have issued price targets for $ITW recently. We have seen 5 analysts offer price targets for $ITW in the last 6 months, with a median target of $250.0.

Here are some recent targets:

Joseph O'Dea from Wells Fargo set a target price of $250.0 on 01/07/2026
Joe Ritchie from Goldman Sachs set a target price of $230.0 on 12/16/2025
Andrew Obin from B of A Securities set a target price of $255.0 on 11/18/2025
Jamie Cook from Truist Securities set a target price of $275.0 on 10/27/2025
Julian Mitchell from Barclays set a target price of $244.0 on 10/27/2025

Full Release

Fourth Quarter 2025 Highlights

Revenue of $4.1 billion, an increase of 4.1%
Operating margin of 26.5%, as enterprise initiatives contributed 140 bps
GAAP EPS of $2.72, an increase of 7%

2025 Highlights

Revenue of $16 billion, an increase of 0.9%
Customer-Back Innovation contributed 2.4% to revenue growth, an increase of 40 bps
Operating margin of 26.3%, as enterprise initiatives contributed 130 bps
GAAP EPS of $10.49 exceeded the prior guidance mid-point of $10.45

2026 Guidance

Revenue growth of 2 to 4%, organic growth of 1 to 3%
Operating margin expansion of approximately 100 bps with enterprise initiatives contributing 100 bps
GAAP EPS of $11.00 to $11.40, an increase of 7% at the mid-point

GLENVIEW, Ill., Feb. 03, 2026 (GLOBE NEWSWIRE) -- Illinois Tool Works Inc. (NYSE: ITW) today reported its fourth quarter and full year 2025 results.

“ITW delivered a solid finish to the year, marked by more than four percent revenue growth and a seven percent increase in GAAP earnings per share. As a result of our disciplined execution across all seven segments, we expanded both operating margin and income to record levels in the quarter,” said Christopher O’Herlihy, President and Chief Executive Officer.

“Our results over the past year demonstrate that ITW is well-positioned to deliver solid financial performance in any environment as we consistently exceeded market growth while improving profitability and margins. Notably, our Customer-Back Innovation initiatives were a primary catalyst, contributing 2.4 percent to revenue growth in 2025. Building on this momentum, we expect to continue outperforming our end markets in 2026 as we leverage ITW’s unique business model to drive consistent, above-market organic growth with best-in-class margins and returns. I extend my sincere gratitude to our global colleagues for their unwavering dedication to serving our customers and executing our strategy with excellence,” O’Herlihy concluded.

Fourth Quarter 2025 Results

Fourth quarter revenue of $4.1 billion increased by 4.1 percent and organic revenue growth was 1.3 percent. Foreign currency translation increased revenue by 2.5 percent and acquisitions added 0.3 percent.

GAAP EPS of $2.72 increased seven percent. Operating margin of 26.5 percent increased 30 basis points as enterprise initiatives contributed 140 basis points. Segment operating margin increased 120 basis points to 27.7 percent. Operating cash flow was $1 billion, and free cash flow was $0.9 billion with a conversion of 109 percent to net income. During the quarter, the company repurchased $375 million of its own shares and the effective tax rate was 22.8 percent.

Full Year 2025 Results

Full year revenue of $16 billion increased 0.9 percent as organic revenue was flat. Foreign currency translation increased revenue by 0.8 percent and acquisitions contributed 0.1 percent to revenues.

GAAP EPS of $10.49 exceeded the prior guidance mid-point of $10.45. Operating income was $4.2 billion and operating margin was 26.3 percent with enterprise initiatives contributing 130 basis points. Segment operating margin of 27.2 percent increased 70 basis points. Pricing and supply chain actions successfully offset the tariff impact for the year. Six of seven segments expanded operating margins with three segments achieving operating margins above 30 percent.

Operating cash flow was $3.1 billion and free cash flow was $2.7 billion, with a conversion of 88 percent to net income. The company invested approximately $0.8 billion to support the long-term growth of its highly profitable businesses and returned $3.3 billion to shareholders through dividends and share repurchases. The effective tax rate was 22.7 percent.

2026 Guidance

ITW is initiating 2026 guidance including GAAP EPS in the range of $11.00 to $11.40 per share, which represents seven percent earnings growth at the mid-point. The company projects revenue growth of two to four percent and organic growth of one to three percent based on current levels of demand and present foreign exchange rates.

Operating margin is projected to be in the range of 26.5 to 27.5 percent, an improvement of approximately 100 basis points with enterprise initiatives contributing 100 basis points.

All seven segments are expected to deliver positive organic growth and operating margin expansion in 2026.

Free cash flow is projected to be greater than 100 percent of net income, and the company plans to repurchase approximately $1.5 billion of its own shares. The projected effective tax rate is 23.5 to 24.5 percent.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is included in the attached supplemental reconciliation schedule. The estimated guidance of free cash flow to net income conversion rate is based on assumptions that are difficult to predict, and estimated guidance for the most directly comparable GAAP measure and a reconciliation of this forward-looking estimate to its most directly comparable GAAP estimate have been omitted due to the unreasonable efforts required in connection with such a reconciliation and the lack of reliable forward-looking cash flow information. For the same reasons, the company is unable to address the potential significance of the unavailable information, which could be material to future results.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements regarding the potential impact of tariffs, the Company’s projected pricing actions, the impact of enterprise initiatives, future financial and operating performance, free cash flow and free cash flow to net income conversion rate, organic and total revenue, operating and incremental margin, price/cost impact, statements regarding diluted earnings per share, after-tax return on invested capital, effective tax rates, exchange rates, expected timing and amount of share repurchases, end market economic and regulatory conditions, and the Company’s 2026 guidance. These statements are subject to certain risks, uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that could cause actual results to differ materially from the Company’s expectations include those that are detailed in ITW’s Form 10-K for 2024 and subsequent reports filed with the SEC.

About Illinois Tool Works

ITW (NYSE: ITW) is a Fortune 300 global multi-industrial manufacturing leader with revenue of $16 billion in 2025. The company’s seven industry-leading segments leverage the unique ITW Business Model to drive solid growth with best-in-class margins and returns in markets where highly innovative, customer-focused solutions are required. ITW’s approximately 43,000 dedicated colleagues around the world thrive in the company’s decentralized and entrepreneurial culture. www.itw.com .

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES STATEMENT OF INCOME (UNAUDITED)

	Three Months Ended December 31,						Twelve Months Ended December 31,
In millions except per share amounts		2025			2024			2025			2024
Operating Revenue	$	4,093		$	3,932		$	16,044		$	15,898
Cost of revenue		2,284			2,221			8,969			8,858
Selling, administrative, and research and development expenses		704			655			2,779			2,675
Amortization and impairment of intangible assets		20			25			80			101
Operating Income		1,085			1,031			4,216			4,264
Interest expense		(75	)		(68	)		(292	)		(283	)
Other income (expense)		14			20			42			441
Income Before Taxes		1,024			983			3,966			4,422
Income taxes		234			233			900			934
Net Income	$	790		$	750		$	3,066		$	3,488

Net Income Per Share:
Basic	$	2.73		$	2.55		$	10.52		$	11.75
Diluted	$	2.72		$	2.54		$	10.49		$	11.71

Cash Dividends Per Share:
Paid	$	1.61		$	1.50		$	6.11		$	5.70
Declared	$	1.61		$	1.50		$	6.22		$	5.80

Shares of Common Stock Outstanding During the Period:
Average		289.5			294.7			291.5			296.8
Average assuming dilution		290.2			295.8			292.3			297.8

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES STATEMENT OF FINANCIAL POSITION (UNAUDITED)

In millions	December 31, 2025			December 31, 2024
Assets
Current Assets:
Cash and equivalents	$	851		$	948
Trade receivables		3,227			2,991
Inventories		1,659			1,605
Prepaid expenses and other current assets		463			312
Total current assets		6,200			5,856

Net plant and equipment		2,230			2,036
Goodwill		5,098			4,839
Intangible assets		591			592
Deferred income taxes		519			369
Other assets		1,510			1,375
	$	16,148		$	15,067

Liabilities and Stockholders' Equity
Current Liabilities:
Short-term debt	$	2,286		$	1,555
Accounts payable		522			519
Accrued expenses		1,636			1,576
Cash dividends payable		465			441
Income taxes payable		217			217
Total current liabilities		5,126			4,308

Noncurrent Liabilities:
Long-term debt		6,683			6,308
Deferred income taxes		154			119
Other liabilities		959			1,015
Total noncurrent liabilities		7,796			7,442

Stockholders' Equity:
Common stock		6			6
Additional paid-in-capital		1,771			1,669
Retained earnings		30,150			28,893
Common stock held in treasury		(26,875	)		(25,375	)
Accumulated other comprehensive income (loss)		(1,827	)		(1,877	)
Noncontrolling interest		1			1
Total stockholders' equity		3,226			3,317
	$	16,148		$	15,067

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES SEGMENT DATA (UNAUDITED)

Three Months Ended December 31, 2025
Dollars in millions	Total Revenue			Operating Income			Operating Margin
Automotive OEM	$	827		$	180		21.8	%
Food Equipment		698			196		28.0	%
Test & Measurement and Electronics		789			221		28.1	%
Welding		462			153		33.3	%
Polymers & Fluids		457			132		29.0	%
Construction Products		431			126		29.0	%
Specialty Products		433			124		28.7	%
Intersegment		(4	)		—		—	%
Total Segments		4,093			1,132		27.7	%
Unallocated		—			(47	)	—	%
Total Company	$	4,093		$	1,085		26.5	%

Twelve Months Ended December 31, 2025
Dollars in millions	Total Revenue			Operating Income			Operating Margin
Automotive OEM	$	3,288		$	693		21.1	%
Food Equipment		2,699			753		27.9	%
Test & Measurement and Electronics		2,825			694		24.6	%
Welding		1,890			621		32.9	%
Polymers & Fluids		1,765			493		27.9	%
Construction Products		1,820			550		30.2	%
Specialty Products		1,775			553		31.2	%
Intersegment		(18	)		—		—	%
Total Segments		16,044			4,357		27.2	%
Unallocated		—			(141	)	—	%
Total Company	$	16,044		$	4,216		26.3	%

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES SEGMENT DATA (UNAUDITED)

Q4 2025 vs. Q4 2024 Favorable/(Unfavorable)
Operating Revenue	Automotive OEM		Food Equipment		Test & Measurement and Electronics		Welding		Polymers & Fluids		Construction Products		Specialty Products		Total ITW
Organic	1.9	%	0.7	%	1.8	%	2.3	%	4.7	%	(3.5	)%	1.1	%	1.3	%
Acquisitions/ Divestitures	—	%	—	%	1.5	%	—	%	—	%	—	%	—	%	0.3	%
Translation	3.6	%	3.1	%	2.2	%	1.0	%	1.8	%	2.0	%	2.9	%	2.5	%
Operating Revenue	5.5	%	3.8	%	5.5	%	3.3	%	6.5	%	(1.5	)%	4.0	%	4.1	%

Q4 2025 vs. Q4 2024 Favorable/(Unfavorable)
Change in Operating Margin	Automotive OEM	Food Equipment	Test & Measurement and Electronics	Welding	Polymers & Fluids	Construction Products	Specialty Products	Total ITW
Operating Leverage	40 bps	10 bps	40 bps	40 bps	80 bps	(80) bps	30 bps	30 bps
Changes in Variable Margin & OH Costs	130 bps	70 bps	130 bps	200 bps	60 bps	190 bps	10 bps	10 bps
Total Organic	170 bps	80 bps	170 bps	240 bps	140 bps	110 bps	40 bps	40 bps
Acquisitions/ Divestitures	—	—	(60) bps	—	—	—	—	(10) bps
Restructuring/Other	30 bps	—	—	(30) bps	(30) bps	(10) bps	(10) bps	—
Total Operating Margin Change	200 bps	80 bps	110 bps	210 bps	110 bps	100 bps	30 bps	30 bps

Total Operating Margin % *	21.8 %	28.0 %	28.1 %	33.3 %	29.0 %	29.0 %	28.7 %	26.5 %

* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets	20 bps	10 bps	120 bps	—	130 bps	10 bps	20 bps	50 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.05) on GAAP earnings per share for the fourth quarter of 2025.

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES SEGMENT DATA (UNAUDITED)

Full Year 2025 vs Full Year 2024 Favorable/(Unfavorable)
Operating Revenue	Automotive OEM		Food Equipment		Test & Measurement and Electronics		Welding		Polymers & Fluids		Construction Products		Specialty Products		Total ITW
Organic	2.0	%	0.8	%	(1.4	)%	2.0	%	(0.2	)%	(5.1	)%	1.0	%	—	%
Acquisitions/ Divestitures	—	%	—	%	0.4	%	—	%	—	%	—	%	—	%	0.1	%
Translation	1.2	%	1.1	%	1.2	%	0.1	%	0.3	%	0.5	%	0.8	%	0.8	%
Operating Revenue	3.2	%	1.9	%	0.2	%	2.1	%	0.1	%	(4.6	)%	1.8	%	0.9	%

Full Year 2025 vs Full Year 2024 Favorable/(Unfavorable)
Change in Operating Margin	Automotive OEM	Food Equipment	Test & Measurement and Electronics	Welding	Polymers & Fluids	Construction Products	Specialty Products	Total ITW
Operating Leverage	40 bps	20 bps	(40) bps	30 bps	10 bps	(110) bps	20 bps	—
Changes in Variable Margin & OH Costs	110 bps	40 bps	60 bps	30 bps	50 bps	170 bps	70 bps	(50) bps
Total Organic	150 bps	60 bps	20 bps	60 bps	60 bps	60 bps	90 bps	(50) bps
Acquisitions/ Divestitures	—	—	(20) bps	—	—	—	—	—
Restructuring/Other	—	10 bps	(30) bps	—	(10) bps	30 bps	—	—
Total Operating Margin Change	150 bps	70 bps	(30) bps	60 bps	50 bps	90 bps	90 bps	(50) bps

Total Operating Margin % *	21.1 %	27.9 %	24.6 %	32.9 %	27.9 %	30.2 %	31.2 %	26.3 %

* Includes unfavorable operating margin impact of amortization expense from acquisition-related intangible assets	20 bps	10 bps	130 bps	10 bps	150 bps	10 bps	10 bps	50 bps **
** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.21) on GAAP earnings per share for 2025.

	ILLINOIS TOOL WORKS INC. and SUBSIDIARIES GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

	AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

		Three Months Ended December 31,						Twelve Months Ended December 31,
Dollars in millions			2025			2024			2025			2024
Numerator:
Net income		$	790		$	750		$	3,066		$	3,488
Net discrete tax benefit related to the third quarter 2025			—			—			(27	)		—
Discrete tax benefit related to the first quarter 2025			—			—			(21	)		—
Net discrete tax benefit related to the third quarter 2024			—			—			—			(121	)
Interest expense, net of tax ⁽¹⁾			57			51			222			215
Other (income) expense, net of tax ⁽¹⁾			(10	)		(16	)		(32	)		(336	)
Operating income after taxes		$	837		$	785		$	3,208		$	3,246

Denominator:
Invested capital:
	Cash and equivalents	$	851		$	948		$	851		$	948
	Trade receivables		3,227			2,991			3,227			2,991
	Inventories		1,659			1,605			1,659			1,605
	Net plant and equipment		2,230			2,036			2,230			2,036
	Goodwill and intangible assets		5,689			5,431			5,689			5,431
	Accounts payable and accrued expenses		(2,158	)		(2,095	)		(2,158	)		(2,095	)
	Debt		(8,969	)		(7,863	)		(8,969	)		(7,863	)
	Other, net		697			264			697			264
Total net assets (stockholders' equity)			3,226			3,317			3,226			3,317
	Cash and equivalents		(851	)		(948	)		(851	)		(948	)
	Debt		8,969			7,863			8,969			7,863
Total invested capital		$	11,344		$	10,232		$	11,344		$	10,232

Average invested capital ⁽²⁾		$	11,285		$	10,511		$	10,959		$	10,419

Net income to average invested capital ⁽³⁾			28.0	%		28.6	%		28.0	%		33.5	%
After-tax return on average invested capital ⁽³⁾			29.7	%		29.9	%		29.3	%		31.2	%

⁽¹⁾	Effective tax rate used for interest expense and other (income) expense for the three months ended December 31, 2025 and 2024 was 22.8% and 23.7%, respectively, and 23.9%, and 23.8% for the twelve months ended December 31, 2025 and 2024, respectively.

⁽²⁾	Average invested capital is calculated using the total invested capital balances at the start of the period and at the end of each quarter within each of the periods presented.

⁽³⁾	Returns for the three months ended December 31, 2025 and 2024 were converted to an annual rate by multiplying the calculated return by 4.

A reconciliation of the 2025 effective tax rate, excluding the third quarter 2025 net discrete tax benefit of $27 million, which included a favorable discrete tax benefit of $43 million related to the estimated U.S. federal tax liability for 2024, partially offset by a $16 million discrete tax expense related primarily to the resolution of a foreign tax audit, and excluding the first quarter 2025 discrete tax benefit of $21 million related to the reversal of a valuation allowance on net operating loss carryforwards, is as follows:

	Twelve Months Ended December 31, 2025
Dollars in millions	Income Taxes		Tax Rate
As reported	$	900	22.7	%
Net discrete tax benefit related to the third quarter 2025		27	0.7	%
Discrete tax benefit related to the first quarter 2025		21	0.5	%
As adjusted	$	948	23.9	%

A reconciliation of the 2024 effective tax rate excluding the third quarter 2024 net discrete tax benefit of $121 million, which included favorable discrete tax benefits of $107 million related to the utilization of capital loss carryforwards upon the sale of Wilsonart and $87 million related to a reorganization of the Company's intellectual property, partially offset by a $73 million discrete tax expense related to the remeasurement of unrecognized tax benefits associated with various intercompany transactions, is as follows:

	Twelve Months Ended December 31, 2024
Dollars in millions	Income Taxes		Tax Rate
As reported	$	934	21.1	%
Net discrete tax benefit related to the third quarter 2024		121	2.7	%
As adjusted	$	1,055	23.8	%

FREE CASH FLOW (UNAUDITED)

	Three Months Ended December 31,						Twelve Months Ended December 31,
Dollars in millions		2025			2024			2025			2024
Net cash provided by operating activities	$	963		$	1,114		$	3,126		$	3,281
Less: Additions to plant and equipment		(105	)		(118	)		(419	)		(437	)
Free cash flow	$	858		$	996		$	2,707		$	2,844

Net income	$	790		$	750		$	3,066		$	3,488

Net cash provided by operating activities to net income conversion rate		122	%		149	%		102	%		94	%
Free cash flow to net income conversion rate		109	%		133	%		88	%		82	%

	ADJUSTED NET INCOME PER SHARE - DILUTED (UNAUDITED)

		Twelve Months Ended December 31, 2024
As reported		$	11.71
Impact of sale of noncontrolling interest in Wilsonart ⁽¹⁾			(1.26	)
Cumulative effect of change in inventory accounting method, net of tax ⁽²⁾			(0.30	)
As adjusted		$	10.15

⁽¹⁾	Includes the $363 million pre-tax gain on the sale of noncontrolling interest in Wilsonart and related taxes.

⁽²⁾	Represents the cumulative effect of the change from the LIFO method of accounting to the FIFO method for certain U.S. businesses ($117 million pre-tax, or $88 million after-tax).

Investor Relations & Media Contact:
Erin Linnihan
Tel: 224.661.7431
[email protected] | [email protected]