ILLINOIS TOOL WORKS INC — Call Transcript 2026

Morning. This is the 2026 annual meeting of stockholders of Illinois Tool Works Inc. I will now turn the meeting over to Mr. E. Scott Santi, the Non-Executive Chairman of the Board of Directors. Good morning, welcome to the ITW 2026 annual meeting of stockholders. To make the meeting accessible to all stockholders, we are conducting this annual meeting virtually in a format designed to provide the same rights and opportunities for participation as an in-person meeting. Following the business portion of this meeting, Chris O'Herlihy, our CEO and member of the board of directors, will provide an update on the company. During the company update portion of this meeting, we will make certain forward-looking statements. This is a standard reminder that actual results can differ materially from the results discussed today. You should refer to the cautionary statements and other information included in our 2025 Form 10-K, 2026 first quarter 10-Q, and our subsequent filings with the SEC. At the end of the company update portion of this meeting, we will allow our stockholders an opportunity to ask questions. Only validated stockholders may ask questions by submitting them in writing in the designated field provided on the virtual meeting website. For more information, please refer to the rules of conduct available under Meeting Materials at the bottom of your screen. Recording of this meeting is prohibited. The purpose of this meeting is to consider and vote on the proposals described in our proxy statement, which we will review in more detail in a few minutes. Ms. Sarah Blazer of Broadridge Financial Solutions, our proxy service provider and tabulator, has been appointed as Inspector of Election and is present at today's meeting. I am pleased to report that I have been informed by the Inspector of Election, Ms. Blazer, that approximately 90% of the outstanding shares of common stock entitled to vote as of the record date are represented in person or by proxy. Accordingly, a quorum is present. I hereby call this meeting to order and appoint Mr. Chris Rauch, Senior Vice President, General Counsel, and Secretary, as secretary of this meeting. The polls on all proposals set forth in our notice of the 2026 annual meeting and proxy statement are now open. To vote, click on Vote Here at the bottom of the webcast screen. Before we move on to the formal business of the meeting, I'd like to take a moment to introduce our director nominees, all of whom are with us today. Mr. Daniel J. Brutto, retired President of UPS International and Senior Vice President of United Parcel Service Inc. Susan Crown, Chairman and Chief Executive Officer of Owl Creek Partners, LLC. Darrell L. Ford, Executive Vice President, Chief Human Resources Officer of UPS International. Kelly J. Grier, retired U.S. Chair and Managing Partner of Ernst & Young LLP. James W. Griffith, Retired President and Chief Executive Officer of The Timken Company. Jay L. Henderson, Retired Vice Chairman, Client Service of PricewaterhouseCoopers LLP. Jaime Irick, President and Chief Executive Officer of Transcat, Inc. Richard H. Lenny, Non-Executive Chairman of Conagra Brands, Inc. Christopher A. O'Herlihy, President and Chief Executive Officer of Illinois Tool Works. Jennifer F. Scanlon, President and Chief Executive Officer of UL Solutions Inc. David B. Smith, Jr., Executive Vice President for Policy and Legal Affairs and General Counsel of the Mutual Fund Directors Forum. Pamela B. Strobel, Retired Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company. Myself, E. Scott Santi, Non-Executive Chairman of ITW. Finally, I would also like to take a moment to introduce and recognize the ITW executive leadership team. Our President and CEO, Chris O'Herlihy. Our Senior Vice Presidents, Michael M. Larsen, Chief Financial Officer, Mary K. Lawler, Chief Human Resources Officer, and Christopher P. Rauch, General Counsel and Secretary. Our Executive Vice Presidents, Axel R. J. Beck, T. Kenneth Escoe, Xavier Gracia, Patricia A. Hartzell, Guilherme Silva, Sharon A. Szafranski, and Mark Thibeault. With that, I'll hand it over to Mr. Rauch for the formal business portion of the meeting. Chris? Thank you, Scott. Claudine Hallock from Deloitte & Touche LLP, the company's independent public accounting firm, is also present at today's meeting. I have an affidavit, a mailing from Broadridge Financial Solutions, certifying that notice of this meeting, including the proxy materials or notice of availability of proxy materials, was duly given. All stockholders of record at the close of business on March 9, 2026 are entitled to vote at this annual meeting. A certified list of the stockholders entitled to vote at this meeting was made available to stockholders for 10 days prior to the meeting in accordance with Delaware law. The proposals to be considered and voted upon at this meeting are described in detail in our proxy statement in the same order as they appear on the screen on the portal. The first item of business before the meeting is the election of 13 director nominees to serve until 2027 Annual Meeting of Stockholders or until his or her successor has been duly elected and qualified. The director nominees, whose names and biographies appear in our proxy statement, were already introduced by the chairman. No additional nominations were received within the time period provided in the bylaws. I declare the nominations closed. The second item of business before the meeting is an advisory vote to approve the executive compensation of the company's named executive officers as disclosed in the proxy statement. The third item of business before the meeting is the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm in 2026. The fourth item of business before the meeting is a non-binding stockholder proposal regarding directors who fail to receive a majority vote. Our board of directors has recommended that ITW stockholders vote against this proposal for the reasons outlined in the company's proxy statement. This proposal was submitted by Mr. John Chevedden. Mr. Chevedden, you will have three minutes to present the proposal. You may unmute your line and begin. Hello, this is John Chevedden. Proposal 4, directors who fail to maintain a majority vote. Shareholders request that the board of directors take the necessary steps to ensure that directors who fail to obtain a majority vote in a future uncontested election shall leave the board as soon as possible, but in no case shall such directors serve more than nine months on the board after such failed election. A vote of rejection by Illinois Tool Works shareholders needs to be respected. ITW shareholders often only vote on three company items in a year. The least ITW can do is to respect all shareholder votes. If ITW accepts shareholder approval of executive pay, ITW should be prepared to accept shareholder rejection of a director. Nine months is adequate time for ITW to find a highly qualified replacement director. This proposal will give ITW directors more of an incentive to perform. Now is a good time to improve shareholder oversight of ITW. ITW stock was at $248 in 2021 and was at only $255 now in spite of a robust stock market. ITW faces challenges. ITW shareholders may believe that the board refreshment is a way to address challenges. ITW shareholders' effort at board refreshment could be thwarted if ITW can ignore ITW shareholders if they vote to not elect a director. Please vote for proposal four to make sure ITW respects shareholder votes regarding directors. Thank you, Mr. Chevedden. Operator, please close the proponent's line. Any stockholder who has not yet voted or who wishes to change their vote may do so now by clicking on the Vote Here button on the web portal and following the instructions there. If you sent in your proxy form or voted by telephone or the internet and do not wish to change your vote, your vote has been cast, and you do not need to take any further action. All right. Now that everyone has had the opportunity to vote, I declare the polls closed. I have the preliminary voting results from the Inspector of Election, and I'd now like to report the preliminary voting results. With respect to item one, each of the 13 director nominees has been duly elected by the affirmative vote of more than 95% of the votes cast. With respect to item 2, the advisory vote on the company's executive compensation, the proposal has been approved by the affirmative vote of approximately 96% of votes cast. With respect to item 3, the appointment of Deloitte as ITW's independent registered public accounting firm for 2026 has been ratified by the affirmative vote of approximately 95% of the votes cast. Finally, with respect to item 4, the stockholder proposal regarding directors who failed to receive a majority vote, the proposal received the support of approximately 11% of the votes cast and did not receive enough votes to pass. Final results will be available for stockholders review after the votes have been certified by the inspector of election in our Form 8-K to be filed with the Securities and Exchange Commission within four business days of this meeting. There being no further business for the 2026 Annual Meeting of Stockholders, the business portion of this meeting is now adjourned. I will now turn the meeting to Chris O'Herlihy, our CEO, for a company update, after which we'll address shareholder questions. Thank you, Scott and Chris. Good morning, everyone. In 2025, we consistently outperformed our underlying end markets, solidly improved profitability, and made meaningful progress on our next phase key strategic priorities despite a challenging external environment. Our revenue of $16 billion included a 2.4% contribution from Customer-Back Innovation as we remained laser focused on building high quality organic growth fueled by Customer-Back Innovation into a defining ITW strength. We executed with discipline, earning a best in class operating margin of 26.3%, a best in class after tax return on invested capital of 29.3%, and a GAAP EPS of $10.49. In addition to this high level execution, we invested $800 million to support the long-term profitable growth of our core businesses. We raised our dividend for the 62nd consecutive year and returned $3.3 billion to you, our shareholders. Through the execution of our enterprise strategy over the past 13 years, we have successfully transformed ITW from a middle of the pack industrial company to one of the best performing, highest quality and most respected industrial companies in the world. In doing so, we demonstrated that our competitive advantages are unique and formidable. Now, in this next phase of the enterprise strategy, we sustain our focus on leveraging the ITW business model to its full potential. In 2025, we advanced our progress on our strategic priorities and continued to improve our Customer-Back Innovation execution. High quality above market organic growth of 4%+ through the cycle remains our highest priority. We are confident that the ITW business model and the enterprise strategy make ITW stronger and better positioned than at any point in our history. Customer-Back Innovation, or CBI, is the primary engine for achieving our long term organic growth target. It means that our divisions partner with key customers as trusted problem solvers, addressing their most critical pain points. This approach, based on decades of innovation experience at ITW, delivers better outcomes for our customers and higher margin growth and returns on investment for ITW. We aggressively protect our innovations with a growing portfolio of over 21,800 patents granted and pending. In 2025, we made solid progress leveraging our reinvigorated Customer-Back Innovation framework in every division, building repeatable, disciplined innovation processes for each specific market. As you can see here, CBI contributed 2.4% to organic growth, a 40 basis point improvement from 2024. Patent filings, a key leading indicator of future growth, increased 9% last year and 18% in 2024. With this momentum, we're firmly on track to consistently deliver an annual 3% plus CBI contribution to growth by 2030. ITW maintains a highly focused capital allocation strategy. Our guiding principle is to deploy capital only where we can leverage our business model into a compelling competitive advantage and deliver sustained, differentiated financial performance. In practice, this means our top priority is investing in our highly profitable core businesses, which supports organic growth efforts and sustains productivity. Next, we pay an attractive dividend that grows in line with earnings over time. Finally, we look to identify and execute high quality acquisitions that can supplement our long term organic growth potential and generate attractive risk adjusted returns on invested capital. After meeting those three priorities, surplus capital is allocated to an active share repurchase program. With this foundation, we enter 2026 with solid momentum and a clear path towards our performance goals. Let's review our expectations for ITW in 2030. As a result of executing on our long term enterprise strategy priorities, our total shareholder return model is what you can expect from ITW. Here you can see that achieving our organic growth target while sustaining our foundational strengths, including best in class margins and disciplined capital allocation, will result in double-digit compound annual total shareholder return. In a highly volatile and increasingly uncertain world, ITW is uniquely positioned to deliver these results over any five years plus timeframe throughout our next phase and beyond. Finally, we are making solid progress on all of our next phase 2030 performance goals. These targets are consistent with our strong continuous improvement philosophy and build on everything we've accomplished in the past. It is our strong belief that ITW's proprietary business model and enterprise strategy framework will be powerful and competitively differentiating in any environment, and we have significant room for further improvement on our path to ITW's full potential. In conclusion, ITW, your company now in its 114th year, is stronger and better positioned than ever before to deliver differentiated performance driven by clear, actionable strategies and our unwavering commitment to do what we say execution, which will continue to be the cornerstone of our success in the next phase and beyond. We are well on track to deliver on our 2030 performance goals. I conclude by expressing our deepest gratitude to our 43,000 ITW colleagues around the world for their unwavering dedication to serving our customers and executing our strategy with excellence each and every day. We thank you, our fellow shareholders, for your continued support. Thank you. Thank you, Chris. With that, we will now be happy to address questions from validated stockholders submitted through the web portal. We will attempt to answer as many questions as time allows. If there are pertinent questions that cannot be addressed during today's annual meeting due to time constraints, answers will be made available as soon as practicable following the annual meeting. We appreciate your questions. Since there are no questions, we will conclude our Q&A session and today's meeting. Mr. Chairman, that concludes the questions. Thank you, Chris. That concludes today's meeting. Thank you everyone for attending. This now concludes the meeting. Thank you for joining and have a pleasant day.

Speaker 5: Morning. This is the 2026 annual meeting of stockholders of Illinois Tool Works Inc. I will now turn the meeting over to Mr. E. Scott Santi, the Non-Executive Chairman of the Board of Directors. Morning. morning This is the 2026 annual meeting of stockholders of Illinois Tool Works Inc. I will now turn the meeting over to Mr. E. this is the 2026 annual meeting of stockholders of illinois tool works inc i will now turn the meeting over to mr. e Scott Santi, the Non-Executive Chairman of the Board of Directors. scott santi the non-executive chairman of the board of directors

Speaker 3: Good morning, welcome to the ITW 2026 annual meeting of stockholders. To make the meeting accessible to all stockholders, we are conducting this annual meeting virtually in a format designed to provide the same rights and opportunities for participation as an in-person meeting. Following the business portion of this meeting, Chris O'Herlihy, our CEO and member of the board of directors, will provide an update on the company. During the company update portion of this meeting, we will make certain forward-looking statements. This is a standard reminder that actual results can differ materially from the results discussed today. You should refer to the cautionary statements and other information included in our 2025 Form 10-K, 2026 first quarter 10-Q, and our subsequent filings with the SEC. Good morning, welcome to the ITW 2026 annual meeting of stockholders. good morning welcome to the itw 2026 annual meeting of stockholders To make the meeting accessible to all stockholders, we are conducting this annual meeting virtually in a format designed to provide the same rights and opportunities for participation as an in-person meeting. to make the meeting accessible to all stockholders we are conducting this annual meeting virtually in a format designed to provide the same rights and opportunities for participation as an in-person meeting Following the business portion of this meeting, Chris O'Herlihy, our CEO and member of the board of directors, will provide an update on the company. following the business portion of this meeting chris o'herlihy our ceo and member of the board of directors will provide an update on the company During the company update portion of this meeting, we will make certain forward-looking statements. during the company update portion of this meeting we will make certain forward-looking statements This is a standard reminder that actual results can differ materially from the results discussed today. this is a standard reminder that actual results can differ materially from the results discussed today You should refer to the cautionary statements and other information included in our 2025 Form 10-K, 2026 first quarter 10-Q, and our subsequent filings with the SEC. you should refer to the cautionary statements and other information included in our 2025 form 10-k 2026 first quarter 10-q and our subsequent filings with the sec At the end of the company update portion of this meeting, we will allow our stockholders an opportunity to ask questions. Only validated stockholders may ask questions by submitting them in writing in the designated field provided on the virtual meeting website. For more information, please refer to the rules of conduct available under Meeting Materials at the bottom of your screen. Recording of this meeting is prohibited. The purpose of this meeting is to consider and vote on the proposals described in our proxy statement, which we will review in more detail in a few minutes. Ms. Sarah Blazer of Broadridge Financial Solutions, our proxy service provider and tabulator, has been appointed as Inspector of Election and is present at today's meeting. At the end of the company update portion of this meeting, we will allow our stockholders an opportunity to ask questions. at the end of the company update portion of this meeting we will allow our stockholders an opportunity to ask questions Only validated stockholders may ask questions by submitting them in writing in the designated field provided on the virtual meeting website. only validated stockholders may ask questions by submitting them in writing in the designated field provided on the virtual meeting website For more information, please refer to the rules of conduct available under Meeting Materials at the bottom of your screen. for more information please refer to the rules of conduct available under meeting materials at the bottom of your screen Recording of this meeting is prohibited. recording of this meeting is prohibited The purpose of this meeting is to consider and vote on the proposals described in our proxy statement, which we will review in more detail in a few minutes. the purpose of this meeting is to consider and vote on the proposals described in our proxy statement which we will review in more detail in a few minutes Ms. Sarah Blazer of Broadridge Financial Solutions, our proxy service provider and tabulator, has been appointed as Inspector of Election and is present at today's meeting. ms sarah blazer of broadridge financial solutions our proxy service provider and tabulator has been appointed as inspector of election and is present at today's meeting I am pleased to report that I have been informed by the Inspector of Election, Ms. Blazer, that approximately 90% of the outstanding shares of common stock entitled to vote as of the record date are represented in person or by proxy. Accordingly, a quorum is present. I hereby call this meeting to order and appoint Mr. Chris Rauch, Senior Vice President, General Counsel, and Secretary, as secretary of this meeting. The polls on all proposals set forth in our notice of the 2026 annual meeting and proxy statement are now open. To vote, click on Vote Here at the bottom of the webcast screen. Before we move on to the formal business of the meeting, I'd like to take a moment to introduce our director nominees, all of whom are with us today. I am pleased to report that I have been informed by the Inspector of Election, Ms. Blazer, that approximately 90% of the outstanding shares of common stock entitled to vote as of the record date are represented in person or by proxy. i am pleased to report that i have been informed by the inspector of election ms blazer that approximately 90% of the outstanding shares of common stock entitled to vote as of the record date are represented in person or by proxy Accordingly, a quorum is present. accordingly a quorum is present I hereby call this meeting to order and appoint Mr. Chris Rauch, Senior Vice President, General Counsel, and Secretary, as secretary of this meeting. i hereby call this meeting to order and appoint mr chris rauch senior vice president general counsel and secretary as secretary of this meeting The polls on all proposals set forth in our notice of the 2026 annual meeting and proxy statement are now open. the polls on all proposals set forth in our notice of the 2026 annual meeting and proxy statement are now open To vote, click on Vote Here at the bottom of the webcast screen. to vote click on vote here at the bottom of the webcast screen Before we move on to the formal business of the meeting, I'd like to take a moment to introduce our director nominees, all of whom are with us today. before we move on to the formal business of the meeting i'd like to take a moment to introduce our director nominees all of whom are with us today Mr. Daniel J. Brutto, retired President of UPS International and Senior Vice President of United Parcel Service Inc. Susan Crown, Chairman and Chief Executive Officer of Owl Creek Partners, LLC. Darrell L. Ford, Executive Vice President, Chief Human Resources Officer of UPS International. Kelly J. Grier, retired U.S. Chair and Managing Partner of Ernst & Young LLP. James W. Griffith, Retired President and Chief Executive Officer of The Timken Company. Jay L. Henderson, Retired Vice Chairman, Client Service of PricewaterhouseCoopers LLP. Jaime Irick, President and Chief Executive Officer of Transcat, Inc. Richard H. Lenny, Non-Executive Chairman of Conagra Brands, Inc. Christopher A. O'Herlihy, President and Chief Executive Officer of Illinois Tool Works. Jennifer F. Scanlon, President and Chief Executive Officer of UL Solutions Inc. Mr. Daniel J. mr daniel j Brutto, retired President of UPS International and Senior Vice President of United Parcel Service Inc. Susan Crown, Chairman and Chief Executive Officer of Owl Creek Partners, LLC. brutto retired president of ups international and senior vice president of united parcel service inc susan crown chairman and chief executive officer of owl creek partners llc Darrell L. darrell l Ford, Executive Vice President, Chief Human Resources Officer of UPS International. ford executive vice president chief human resources officer of ups international Kelly J. kelly j Grier, retired U.S. grier retired u.s Chair and Managing Partner of Ernst & Young LLP. chair and managing partner of ernst & young llp James W. james w Griffith, Retired President and Chief Executive Officer of The Timken Company. griffith retired president and chief executive officer of the timken company Jay L. Henderson , Retired Vice Chairman, Client Service of PricewaterhouseCoopers LLP. jay l. henderson retired vice chairman client service of pricewaterhousecoopers llp Jaime Irick, President and Chief Executive Officer of Transcat, Inc. Richard H. jaime irick president and chief executive officer of transcat inc richard h Lenny, Non-Executive Chairman of Conagra Brands, Inc. Christopher A. lenny non-executive chairman of conagra brands inc christopher a O'Herlihy, President and Chief Executive Officer of Illinois Tool Works. o'herlihy president and chief executive officer of illinois tool works Jennifer F. jennifer f Scanlon, President and Chief Executive Officer of UL Solutions Inc. scanlon president and chief executive officer of ul solutions inc David B. Smith, Jr., Executive Vice President for Policy and Legal Affairs and General Counsel of the Mutual Fund Directors Forum. Pamela B. Strobel, Retired Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company. Myself, E. Scott Santi, Non-Executive Chairman of ITW. Finally, I would also like to take a moment to introduce and recognize the ITW executive leadership team. Our President and CEO, Chris O'Herlihy. Our Senior Vice Presidents, Michael M. Larsen, Chief Financial Officer, Mary K. Lawler, Chief Human Resources Officer, and Christopher P. Rauch, General Counsel and Secretary. Our Executive Vice Presidents, Axel R. J. Beck, T. Kenneth Escoe, Xavier Gracia, Patricia A. Hartzell, Guilherme Silva, Sharon A. Szafranski, and Mark Thibeault. With that, I'll hand it over to Mr. Rauch for the formal business portion of the meeting. Chris? David B. david b Smith, Jr., Executive Vice President for Policy and Legal Affairs and General Counsel of the Mutual Fund Directors Forum. smith jr executive vice president for policy and legal affairs and general counsel of the mutual fund directors forum Pamela B. pamela b Strobel, Retired Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company. strobel retired executive vice president and chief administrative officer of exelon corporation and president of exelon business services company Myself, E. myself, e Scott Santi, Non-Executive Chairman of ITW. scott santi non-executive chairman of itw Finally, I would also like to take a moment to introduce and recognize the ITW executive leadership team. finally i would also like to take a moment to introduce and recognize the itw executive leadership team Our President and CEO, Chris O'Herlihy. our president and ceo chris o'herlihy Our Senior Vice Presidents, Michael M. Larsen, Chief Financial Officer, Mary K. our senior vice presidents michael m. larsen chief financial officer mary k Lawler, Chief Human Resources Officer, and Christopher P. Rauch, General Counsel and Secretary. lawler chief human resources officer and christopher p. rauch general counsel and secretary Our Executive Vice Presidents, Axel R. J. our executive vice presidents axel r. j Beck, T. beck, t Kenneth Escoe, Xavier Gracia, Patricia A. kenneth escoe xavier gracia patricia a Hartzell, Guilherme Silva, Sharon A. Szafranski, and Mark Thibeault. hartzell guilherme silva sharon a. szafranski and mark thibeault With that, I'll hand it over to Mr. Rauch for the formal business portion of the meeting. with that i'll hand it over to mr rauch for the formal business portion of the meeting Chris? chris

Speaker 2: Thank you, Scott. Claudine Hallock from Deloitte & Touche LLP, the company's independent public accounting firm, is also present at today's meeting. I have an affidavit, a mailing from Broadridge Financial Solutions, certifying that notice of this meeting, including the proxy materials or notice of availability of proxy materials, was duly given. All stockholders of record at the close of business on March 9, 2026 are entitled to vote at this annual meeting. A certified list of the stockholders entitled to vote at this meeting was made available to stockholders for 10 days prior to the meeting in accordance with Delaware law. The proposals to be considered and voted upon at this meeting are described in detail in our proxy statement in the same order as they appear on the screen on the portal. Thank you, Scott. thank you scott Claudine Hallock from Deloitte & Touche LLP, the company's independent public accounting firm, is also present at today's meeting. claudine hallock from deloitte & touche llp the company's independent public accounting firm is also present at today's meeting I have an affidavit, a mailing from Broadridge Financial Solutions, certifying that notice of this meeting, including the proxy materials or notice of availability of proxy materials, was duly given. i have an affidavit a mailing from broadridge financial solutions certifying that notice of this meeting including the proxy materials or notice of availability of proxy materials was duly given All stockholders of record at the close of business on March 9, 2026 are entitled to vote at this annual meeting. all stockholders of record at the close of business on march 9 2026 are entitled to vote at this annual meeting A certified list of the stockholders entitled to vote at this meeting was made available to stockholders for 10 days prior to the meeting in accordance with Delaware law. a certified list of the stockholders entitled to vote at this meeting was made available to stockholders for 10 days prior to the meeting in accordance with delaware law The proposals to be considered and voted upon at this meeting are described in detail in our proxy statement in the same order as they appear on the screen on the portal. the proposals to be considered and voted upon at this meeting are described in detail in our proxy statement in the same order as they appear on the screen on the portal The first item of business before the meeting is the election of 13 director nominees to serve until 2027 Annual Meeting of Stockholders or until his or her successor has been duly elected and qualified. The director nominees, whose names and biographies appear in our proxy statement, were already introduced by the chairman. No additional nominations were received within the time period provided in the bylaws. I declare the nominations closed. The second item of business before the meeting is an advisory vote to approve the executive compensation of the company's named executive officers as disclosed in the proxy statement. The third item of business before the meeting is the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm in 2026. The first item of business before the meeting is the election of 13 director nominees to serve until 2027 Annual Meeting of Stockholders or until his or her successor has been duly elected and qualified. the first item of business before the meeting is the election of 13 director nominees to serve until 2027 annual meeting of stockholders or until his or her successor has been duly elected and qualified The director nominees, whose names and biographies appear in our proxy statement, were already introduced by the chairman. the director nominees whose names and biographies appear in our proxy statement were already introduced by the chairman No additional nominations were received within the time period provided in the bylaws. no additional nominations were received within the time period provided in the bylaws I declare the nominations closed. i declare the nominations closed The second item of business before the meeting is an advisory vote to approve the executive compensation of the company's named executive officers as disclosed in the proxy statement. the second item of business before the meeting is an advisory vote to approve the executive compensation of the company's named executive officers as disclosed in the proxy statement The third item of business before the meeting is the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm in 2026. the third item of business before the meeting is the ratification of the appointment of deloitte & touche llp as the company's independent registered public accounting firm in 2026 The fourth item of business before the meeting is a non-binding stockholder proposal regarding directors who fail to receive a majority vote. Our board of directors has recommended that ITW stockholders vote against this proposal for the reasons outlined in the company's proxy statement. This proposal was submitted by Mr. John Chevedden. Mr. Chevedden, you will have three minutes to present the proposal. You may unmute your line and begin. The fourth item of business before the meeting is a non-binding stockholder proposal regarding directors who fail to receive a majority vote. the fourth item of business before the meeting is a non-binding stockholder proposal regarding directors who fail to receive a majority vote Our board of directors has recommended that ITW stockholders vote against this proposal for the reasons outlined in the company's proxy statement. our board of directors has recommended that itw stockholders vote against this proposal for the reasons outlined in the company's proxy statement This proposal was submitted by Mr. John Chevedden. this proposal was submitted by mr john chevedden Mr. Chevedden, you will have three minutes to present the proposal. mr chevedden you will have three minutes to present the proposal You may unmute your line and begin. you may unmute your line and begin

Speaker 4: Hello, this is John Chevedden. Proposal 4, directors who fail to maintain a majority vote. Shareholders request that the board of directors take the necessary steps to ensure that directors who fail to obtain a majority vote in a future uncontested election shall leave the board as soon as possible, but in no case shall such directors serve more than nine months on the board after such failed election. A vote of rejection by Illinois Tool Works shareholders needs to be respected. ITW shareholders often only vote on three company items in a year. The least ITW can do is to respect all shareholder votes. If ITW accepts shareholder approval of executive pay, ITW should be prepared to accept shareholder rejection of a director. Nine months is adequate time for ITW to find a highly qualified replacement director. Hello, this is John Chevedden. hello this is john chevedden Proposal 4, directors who fail to maintain a majority vote. proposal 4 directors who fail to maintain a majority vote Shareholders request that the board of directors take the necessary steps to ensure that directors who fail to obtain a majority vote in a future uncontested election shall leave the board as soon as possible, but in no case shall such directors serve more than nine months on the board after such failed election. shareholders request that the board of directors take the necessary steps to ensure that directors who fail to obtain a majority vote in a future uncontested election shall leave the board as soon as possible but in no case shall such directors serve more than nine months on the board after such failed election A vote of rejection by Illinois Tool Works shareholders needs to be respected. a vote of rejection by illinois tool works shareholders needs to be respected ITW shareholders often only vote on three company items in a year. itw shareholders often only vote on three company items in a year The least ITW can do is to respect all shareholder votes. the least itw can do is to respect all shareholder votes If ITW accepts shareholder approval of executive pay, ITW should be prepared to accept shareholder rejection of a director. if itw accepts shareholder approval of executive pay itw should be prepared to accept shareholder rejection of a director Nine months is adequate time for ITW to find a highly qualified replacement director. nine months is adequate time for itw to find a highly qualified replacement director This proposal will give ITW directors more of an incentive to perform. Now is a good time to improve shareholder oversight of ITW. ITW stock was at $248 in 2021 and was at only $255 now in spite of a robust stock market. ITW faces challenges. ITW shareholders may believe that the board refreshment is a way to address challenges. ITW shareholders' effort at board refreshment could be thwarted if ITW can ignore ITW shareholders if they vote to not elect a director. Please vote for proposal four to make sure ITW respects shareholder votes regarding directors. This proposal will give ITW directors more of an incentive to perform. this proposal will give itw directors more of an incentive to perform Now is a good time to improve shareholder oversight of ITW. now is a good time to improve shareholder oversight of itw ITW stock was at $248 in 2021 and was at only $255 now in spite of a robust stock market. itw stock was at $248 in 2021 and was at only $255 now in spite of a robust stock market ITW faces challenges. itw faces challenges ITW shareholders may believe that the board refreshment is a way to address challenges. itw shareholders may believe that the board refreshment is a way to address challenges ITW shareholders' effort at board refreshment could be thwarted if ITW can ignore ITW shareholders if they vote to not elect a director. itw shareholders' effort at board refreshment could be thwarted if itw can ignore itw shareholders if they vote to not elect a director Please vote for proposal four to make sure ITW respects shareholder votes regarding directors. please vote for proposal four to make sure itw respects shareholder votes regarding directors

Speaker 2: Thank you, Mr. Chevedden. Operator, please close the proponent's line. Any stockholder who has not yet voted or who wishes to change their vote may do so now by clicking on the Vote Here button on the web portal and following the instructions there. If you sent in your proxy form or voted by telephone or the internet and do not wish to change your vote, your vote has been cast, and you do not need to take any further action. All right. Now that everyone has had the opportunity to vote, I declare the polls closed. I have the preliminary voting results from the Inspector of Election, and I'd now like to report the preliminary voting results. Thank you, Mr. Chevedden. thank you mr chevedden Operator, please close the proponent's line. operator please close the proponent's line Any stockholder who has not yet voted or who wishes to change their vote may do so now by clicking on the Vote Here button on the web portal and following the instructions there. any stockholder who has not yet voted or who wishes to change their vote may do so now by clicking on the vote here button on the web portal and following the instructions there If you sent in your proxy form or voted by telephone or the internet and do not wish to change your vote, your vote has been cast, and you do not need to take any further action. if you sent in your proxy form or voted by telephone or the internet and do not wish to change your vote your vote has been cast and you do not need to take any further action All right. all right Now that everyone has had the opportunity to vote, I declare the polls closed. now that everyone has had the opportunity to vote i declare the polls closed I have the preliminary voting results from the Inspector of Election, and I'd now like to report the preliminary voting results. i have the preliminary voting results from the inspector of election and i'd now like to report the preliminary voting results With respect to item one, each of the 13 director nominees has been duly elected by the affirmative vote of more than 95% of the votes cast. With respect to item 2, the advisory vote on the company's executive compensation, the proposal has been approved by the affirmative vote of approximately 96% of votes cast. With respect to item 3, the appointment of Deloitte as ITW's independent registered public accounting firm for 2026 has been ratified by the affirmative vote of approximately 95% of the votes cast. Finally, with respect to item 4, the stockholder proposal regarding directors who failed to receive a majority vote, the proposal received the support of approximately 11% of the votes cast and did not receive enough votes to pass. With respect to item one, each of the 13 director nominees has been duly elected by the affirmative vote of more than 95% of the votes cast. with respect to item one each of the 13 director nominees has been duly elected by the affirmative vote of more than 95% of the votes cast With respect to item 2, the advisory vote on the company's executive compensation, the proposal has been approved by the affirmative vote of approximately 96% of votes cast. with respect to item 2 the advisory vote on the company's executive compensation the proposal has been approved by the affirmative vote of approximately 96% of votes cast With respect to item 3, the appointment of Deloitte as ITW's independent registered public accounting firm for 2026 has been ratified by the affirmative vote of approximately 95% of the votes cast. with respect to item 3 the appointment of deloitte as itw's independent registered public accounting firm for 2026 has been ratified by the affirmative vote of approximately 95% of the votes cast Finally, with respect to item 4, the stockholder proposal regarding directors who failed to receive a majority vote, the proposal received the support of approximately 11% of the votes cast and did not receive enough votes to pass. finally with respect to item 4 the stockholder proposal regarding directors who failed to receive a majority vote the proposal received the support of approximately 11% of the votes cast and did not receive enough votes to pass Final results will be available for stockholders review after the votes have been certified by the inspector of election in our Form 8-K to be filed with the Securities and Exchange Commission within four business days of this meeting. There being no further business for the 2026 Annual Meeting of Stockholders, the business portion of this meeting is now adjourned. I will now turn the meeting to Chris O'Herlihy, our CEO, for a company update, after which we'll address shareholder questions. Final results will be available for stockholders review after the votes have been certified by the inspector of election in our Form 8-K to be filed with the Securities and Exchange Commission within four business days of this meeting. final results will be available for stockholders review after the votes have been certified by the inspector of election in our form 8-k to be filed with the securities and exchange commission within four business days of this meeting There being no further business for the 2026 Annual Meeting of Stockholders, the business portion of this meeting is now adjourned. there being no further business for the 2026 annual meeting of stockholders the business portion of this meeting is now adjourned I will now turn the meeting to Chris O'Herlihy, our CEO, for a company update, after which we'll address shareholder questions. i will now turn the meeting to chris o'herlihy our ceo for a company update after which we'll address shareholder questions

Speaker 1: Thank you, Scott and Chris. Good morning, everyone. In 2025, we consistently outperformed our underlying end markets, solidly improved profitability, and made meaningful progress on our next phase key strategic priorities despite a challenging external environment. Our revenue of $16 billion included a 2.4% contribution from Customer-Back Innovation as we remained laser focused on building high quality organic growth fueled by Customer-Back Innovation into a defining ITW strength. We executed with discipline, earning a best in class operating margin of 26.3%, a best in class after tax return on invested capital of 29.3%, and a GAAP EPS of $10.49. In addition to this high level execution, we invested $800 million to support the long-term profitable growth of our core businesses. Thank you, Scott and Chris. thank you scott and chris Good morning, everyone. good morning everyone In 2025, we consistently outperformed our underlying end markets, solidly improved profitability, and made meaningful progress on our next phase key strategic priorities despite a challenging external environment. Our revenue of $16 billion included a 2.4% contribution from Customer-Back Innovation as we remained laser focused on building high quality organic growth fueled by Customer-Back Innovation into a defining ITW strength. in 2025 we consistently outperformed our underlying end markets solidly improved profitability and made meaningful progress on our next phase key strategic priorities despite a challenging external environment. our revenue of $16 billion included a 2.4% contribution from customer-back innovation as we remained laser focused on building high quality organic growth fueled by customer-back innovation into a defining itw strength We executed with discipline, earning a best in class operating margin of 26.3%, a best in class after tax return on invested capital of 29.3%, and a GAAP EPS of $10.49. we executed with discipline earning a best in class operating margin of 26.3% a best in class after tax return on invested capital of 29.3% and a gaap eps of $10.49 In addition to this high level execution, we invested $800 million to support the long-term profitable growth of our core businesses. in addition to this high level execution we invested $800 million to support the long-term profitable growth of our core businesses We raised our dividend for the 62nd consecutive year and returned $3.3 billion to you, our shareholders. Through the execution of our enterprise strategy over the past 13 years, we have successfully transformed ITW from a middle of the pack industrial company to one of the best performing, highest quality and most respected industrial companies in the world. In doing so, we demonstrated that our competitive advantages are unique and formidable. Now, in this next phase of the enterprise strategy, we sustain our focus on leveraging the ITW business model to its full potential. In 2025, we advanced our progress on our strategic priorities and continued to improve our Customer-Back Innovation execution. High quality above market organic growth of 4%+ through the cycle remains our highest priority. We raised our dividend for the 62nd consecutive year and returned $3.3 billion to you, our shareholders. we raised our dividend for the 62nd consecutive year and returned $3.3 billion to you our shareholders Through the execution of our enterprise strategy over the past 13 years, we have successfully transformed ITW from a middle of the pack industrial company to one of the best performing, highest quality and most respected industrial companies in the world. through the execution of our enterprise strategy over the past 13 years we have successfully transformed itw from a middle of the pack industrial company to one of the best performing highest quality and most respected industrial companies in the world In doing so, we demonstrated that our competitive advantages are unique and formidable. in doing so we demonstrated that our competitive advantages are unique and formidable Now, in this next phase of the enterprise strategy, we sustain our focus on leveraging the ITW business model to its full potential. now in this next phase of the enterprise strategy we sustain our focus on leveraging the itw business model to its full potential In 2025, we advanced our progress on our strategic priorities and continued to improve our Customer-Back Innovation execution. in 2025 we advanced our progress on our strategic priorities and continued to improve our customer-back innovation execution High quality above market organic growth of 4%+ through the cycle remains our highest priority. high quality above market organic growth of 4%+ through the cycle remains our highest priority We are confident that the ITW business model and the enterprise strategy make ITW stronger and better positioned than at any point in our history. Customer-Back Innovation, or CBI, is the primary engine for achieving our long term organic growth target. It means that our divisions partner with key customers as trusted problem solvers, addressing their most critical pain points. This approach, based on decades of innovation experience at ITW, delivers better outcomes for our customers and higher margin growth and returns on investment for ITW. We aggressively protect our innovations with a growing portfolio of over 21,800 patents granted and pending. In 2025, we made solid progress leveraging our reinvigorated Customer-Back Innovation framework in every division, building repeatable, disciplined innovation processes for each specific market. We are confident that the ITW business model and the enterprise strategy make ITW stronger and better positioned than at any point in our history. we are confident that the itw business model and the enterprise strategy make itw stronger and better positioned than at any point in our history Customer-Back Innovation , or CBI, is the primary engine for achieving our long term organic growth target. customer-back innovation or cbi is the primary engine for achieving our long term organic growth target It means that our divisions partner with key customers as trusted problem solvers, addressing their most critical pain points. it means that our divisions partner with key customers as trusted problem solvers addressing their most critical pain points This approach, based on decades of innovation experience at ITW, delivers better outcomes for our customers and higher margin growth and returns on investment for ITW. this approach based on decades of innovation experience at itw delivers better outcomes for our customers and higher margin growth and returns on investment for itw We aggressively protect our innovations with a growing portfolio of over 21,800 patents granted and pending. we aggressively protect our innovations with a growing portfolio of over 21,800 patents granted and pending In 2025, we made solid progress leveraging our reinvigorated Customer-Back Innovation framework in every division, building repeatable, disciplined innovation processes for each specific market. in 2025 we made solid progress leveraging our reinvigorated customer-back innovation framework in every division building repeatable disciplined innovation processes for each specific market As you can see here, CBI contributed 2.4% to organic growth, a 40 basis point improvement from 2024. Patent filings, a key leading indicator of future growth, increased 9% last year and 18% in 2024. With this momentum, we're firmly on track to consistently deliver an annual 3% plus CBI contribution to growth by 2030. ITW maintains a highly focused capital allocation strategy. Our guiding principle is to deploy capital only where we can leverage our business model into a compelling competitive advantage and deliver sustained, differentiated financial performance. In practice, this means our top priority is investing in our highly profitable core businesses, which supports organic growth efforts and sustains productivity. Next, we pay an attractive dividend that grows in line with earnings over time. As you can see here, CBI contributed 2.4% to organic growth, a 40 basis point improvement from 2024. as you can see here cbi contributed 2.4% to organic growth a 40 basis point improvement from 2024 Patent filings, a key leading indicator of future growth, increased 9% last year and 18% in 2024. patent filings a key leading indicator of future growth increased 9% last year and 18% in 2024 With this momentum, we're firmly on track to consistently deliver an annual 3% plus CBI contribution to growth by 2030. with this momentum we're firmly on track to consistently deliver an annual 3% plus cbi contribution to growth by 2030 ITW maintains a highly focused capital allocation strategy. itw maintains a highly focused capital allocation strategy Our guiding principle is to deploy capital only where we can leverage our business model into a compelling competitive advantage and deliver sustained, differentiated financial performance. our guiding principle is to deploy capital only where we can leverage our business model into a compelling competitive advantage and deliver sustained differentiated financial performance In practice, this means our top priority is investing in our highly profitable core businesses, which supports organic growth efforts and sustains productivity. in practice this means our top priority is investing in our highly profitable core businesses which supports organic growth efforts and sustains productivity Next, we pay an attractive dividend that grows in line with earnings over time. next we pay an attractive dividend that grows in line with earnings over time Finally, we look to identify and execute high quality acquisitions that can supplement our long term organic growth potential and generate attractive risk adjusted returns on invested capital. After meeting those three priorities, surplus capital is allocated to an active share repurchase program. With this foundation, we enter 2026 with solid momentum and a clear path towards our performance goals. Let's review our expectations for ITW in 2030. As a result of executing on our long term enterprise strategy priorities, our total shareholder return model is what you can expect from ITW. Here you can see that achieving our organic growth target while sustaining our foundational strengths, including best in class margins and disciplined capital allocation, will result in double-digit compound annual total shareholder return. Finally, we look to identify and execute high quality acquisitions that can supplement our long term organic growth potential and generate attractive risk adjusted returns on invested capital. finally we look to identify and execute high quality acquisitions that can supplement our long term organic growth potential and generate attractive risk adjusted returns on invested capital After meeting those three priorities, surplus capital is allocated to an active share repurchase program. after meeting those three priorities surplus capital is allocated to an active share repurchase program With this foundation, we enter 2026 with solid momentum and a clear path towards our performance goals. with this foundation we enter 2026 with solid momentum and a clear path towards our performance goals Let's review our expectations for ITW in 2030. let's review our expectations for itw in 2030 As a result of executing on our long term enterprise strategy priorities, our total shareholder return model is what you can expect from ITW. as a result of executing on our long term enterprise strategy priorities our total shareholder return model is what you can expect from itw Here you can see that achieving our organic growth target while sustaining our foundational strengths, including best in class margins and disciplined capital allocation, will result in double-digit compound annual total shareholder return. here you can see that achieving our organic growth target while sustaining our foundational strengths including best in class margins and disciplined capital allocation will result in double-digit compound annual total shareholder return In a highly volatile and increasingly uncertain world, ITW is uniquely positioned to deliver these results over any five years plus timeframe throughout our next phase and beyond. Finally, we are making solid progress on all of our next phase 2030 performance goals. These targets are consistent with our strong continuous improvement philosophy and build on everything we've accomplished in the past. It is our strong belief that ITW's proprietary business model and enterprise strategy framework will be powerful and competitively differentiating in any environment, and we have significant room for further improvement on our path to ITW's full potential. In a highly volatile and increasingly uncertain world, ITW is uniquely positioned to deliver these results over any five years plus timeframe throughout our next phase and beyond. in a highly volatile and increasingly uncertain world itw is uniquely positioned to deliver these results over any five years plus timeframe throughout our next phase and beyond Finally, we are making solid progress on all of our next phase 2030 performance goals. finally we are making solid progress on all of our next phase 2030 performance goals These targets are consistent with our strong continuous improvement philosophy and build on everything we've accomplished in the past. these targets are consistent with our strong continuous improvement philosophy and build on everything we've accomplished in the past It is our strong belief that ITW's proprietary business model and enterprise strategy framework will be powerful and competitively differentiating in any environment, and we have significant room for further improvement on our path to ITW's full potential. it is our strong belief that itw's proprietary business model and enterprise strategy framework will be powerful and competitively differentiating in any environment and we have significant room for further improvement on our path to itw's full potential In conclusion, ITW, your company now in its 114th year, is stronger and better positioned than ever before to deliver differentiated performance driven by clear, actionable strategies and our unwavering commitment to do what we say execution, which will continue to be the cornerstone of our success in the next phase and beyond. We are well on track to deliver on our 2030 performance goals. I conclude by expressing our deepest gratitude to our 43,000 ITW colleagues around the world for their unwavering dedication to serving our customers and executing our strategy with excellence each and every day. We thank you, our fellow shareholders, for your continued support. Thank you. In conclusion, ITW, your company now in its 114th year, is stronger and better positioned than ever before to deliver differentiated performance driven by clear, actionable strategies and our unwavering commitment to do what we say execution, which will continue to be the cornerstone of our success in the next phase and beyond. in conclusion itw your company now in its 114th year is stronger and better positioned than ever before to deliver differentiated performance driven by clear actionable strategies and our unwavering commitment to do what we say execution which will continue to be the cornerstone of our success in the next phase and beyond We are well on track to deliver on our 2030 performance goals. we are well on track to deliver on our 2030 performance goals I conclude by expressing our deepest gratitude to our 43,000 ITW colleagues around the world for their unwavering dedication to serving our customers and executing our strategy with excellence each and every day. i conclude by expressing our deepest gratitude to our 43,000 itw colleagues around the world for their unwavering dedication to serving our customers and executing our strategy with excellence each and every day We thank you, our fellow shareholders, for your continued support. we thank you our fellow shareholders for your continued support Thank you. thank you

Speaker 2: Thank you, Chris. With that, we will now be happy to address questions from validated stockholders submitted through the web portal. We will attempt to answer as many questions as time allows. If there are pertinent questions that cannot be addressed during today's annual meeting due to time constraints, answers will be made available as soon as practicable following the annual meeting. We appreciate your questions. Since there are no questions, we will conclude our Q&A session and today's meeting. Mr. Chairman, that concludes the questions. Thank you, Chris. thank you chris With that, we will now be happy to address questions from validated stockholders submitted through the web portal. with that we will now be happy to address questions from validated stockholders submitted through the web portal We will attempt to answer as many questions as time allows. we will attempt to answer as many questions as time allows If there are pertinent questions that cannot be addressed during today's annual meeting due to time constraints, answers will be made available as soon as practicable following the annual meeting. if there are pertinent questions that cannot be addressed during today's annual meeting due to time constraints answers will be made available as soon as practicable following the annual meeting We appreciate your questions. we appreciate your questions Since there are no questions, we will conclude our Q&A session and today's meeting. since there are no questions we will conclude our q&a session and today's meeting Mr. Chairman, that concludes the questions. mr chairman that concludes the questions

Speaker 3: Thank you, Chris. That concludes today's meeting. Thank you everyone for attending. Thank you, Chris. thank you chris That concludes today's meeting. that concludes today's meeting Thank you everyone for attending. thank you everyone for attending

Speaker 5: This now concludes the meeting. Thank you for joining and have a pleasant day. This now concludes the meeting. this now concludes the meeting Thank you for joining and have a pleasant day. thank you for joining and have a pleasant day