Attachment: 10-K

Exhibit
Exhibit 4(j)

Description of the Company’s Common Stock
Registered Pursuant to Section 12
of the Securities Exchange Act of 1934

The following description of the Company’s capital stock is intended as a summary only. This description is based upon, and is qualified by reference to, the Company’s Amended and Restated Certificate of Incorporation (“certificate of incorporation”) and By-laws, each as filed with the Company’s Annual Report on Form 10-K, and the applicable provisions of Delaware corporation law.

General

As of January 31, 2020, the authorized capital stock of Illinois Tool Works Inc. (“ITW”) consists of 700,000,000 shares of common stock, par value $0.01 per share, and 300,000 shares of preferred stock, no par value. As of January 31, 2020, there were 318,864,237 shares of common stock issued and outstanding. No preferred stock is issued and outstanding.

Common Stock

Holders of common stock are entitled to one vote for each share held of record, in person or by proxy, at all meetings of the stockholders and on all propositions presented to such meetings (other than the election of any directors who may be elected by vote of the preferred stock voting as a class). The common stock does not entitle holders to cumulative voting rights in the election of directors. Holders of common stock do not have preemptive rights.

All outstanding shares of common stock are fully paid and nonassessable. Dividends may be paid on the common stock when and if declared by the Board of Directors out of funds legally available therefor. Upon liquidation, dissolution, or winding up of the affairs of ITW, its assets remaining, after provision for payment of creditors and holders of any preferred stock, are distributable pro rata among holders of its common stock.

The common stock is listed and traded on the NYSE under the symbol “ITW.” The transfer agent and registrar of the common stock is Broadridge Corporate Issuer Solutions, Inc., Philadelphia, PA.

Preferred Stock

ITW’s preferred stock is issuable in series. The preferred stock is senior to the common stock, both as to payment of dividends and distribution of assets. The designation, preferences and rights of each series may be established by the Board of Directors, including voting rights, dividends, redemption features, payments on liquidation and sinking fund provisions, if any. The preferred stock may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital or to finance acquisitions. The preferred stock also could be issued to persons friendly to current management with terms that could render more difficult or discourage attempts to gain control of ITW by means of a merger, tender offer, proxy contest or otherwise and thereby protect the continuity of current management. The preferred stock also could be used to dilute the stock ownership of persons seeking to obtain control of ITW.

Special Charter and By-law Provisions

ITW’s Amended and Restated Certificate of Incorporation and By-laws, as amended and restated, contain provisions that could render more difficult a merger, tender offer, proxy contest or attempt to gain control of the Board of Directors. The Amended and Restated Certificate of Incorporation prohibits stockholder action by written consent. The Amended and Restated Certificate of Incorporation and By-laws permit only the Board of Directors to fill vacancies on the Board of Directors, whether created by an increase in the number of directors or otherwise, and permit special meetings of stockholders to be called only by the chairman, the president or a majority of the Board of Directors, or, subject to procedural requirements set forth in the By‑laws, by stockholders that own at least 20%


of the Company’s outstanding common stock. The By-laws provide advance notice procedures for stockholders seeking to bring business before an annual meeting of stockholders or to nominate candidates for election as directors at any meeting of stockholders. Under the By-laws, up to 20 stockholders owning at least 3% of the Company’s outstanding common stock for at least 3 years may include nominations in the Company’s proxy materials for up to the greater of 25% of the Board of Directors or 2 directors, provided the stockholder(s) and nominee(s) satisfy the requirements specified in the By-laws. The By-laws also specify certain requirements regarding the form and content of a stockholder’s notice.

Exhibit
Exhibit 4(k)

Description of 1.75% Euro Notes due 2022 and 3.00% Euro Notes due 2034
Registered Pursuant to Section 12
of the Securities Exchange Act of 1934

The following summary of the Company’s above referenced debt securities, each issued as a separate class thereof, is based on and qualified by the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between Illinois Tool Works and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”), and the 1.75% Euro Notes due 2022 and the 3.00% Euro Notes due 2034 (collectively, the “Notes”). For a complete description of the terms and provisions of the Notes, refer to the Indenture and to the Officers’ Certificate establishing the terms, and setting forth the forms, of the Notes, each of which is filed as an exhibit to this Annual Report on Form 10-K. Throughout this exhibit, references to “we,” “our,” and “us” refer to Illinois Tool Works Inc.

General

On May 12, 2014, we registered €500,000,000 aggregate principal amount of 1.750% notes due 2022 (the “2022 notes”) and €500,000,000 aggregate principal amount of 3.000% notes due 2034 (the “2034 notes,” and together with the 2022 notes referred to in this section, the “notes”). The notes were issued each as a separate series of debt securities under the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between us and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”).

The 2022 notes are traded on the New York Stock Exchange under the symbol “ITW22.” The 2034 notes are traded on the New York Stock Exchange under the symbol “ITW34.”

We have issued a significant amount of other debt securities under the Indenture that have neither been registered pursuant to Section 12 of the Securities Exchange Act of 1934 nor listed on the NYSE. You should refer to our description of the amount of debt outstanding as disclosed in our Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

Ranking

The notes are our direct, unsecured obligations. They rank equally with all of our other unsecured and unsubordinated indebtedness from time to time outstanding. The notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and structurally subordinated to all of the existing and future indebtedness and other liabilities of our subsidiaries.

Payments in Euros

All payments of interest and principal, including payments made upon any redemption of the notes, will be payable in euros. If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. In such circumstances, the amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default under the notes or the indenture governing the notes. Neither the trustee nor the paying agent shall have any responsibility for any calculation or conversion in connection with the foregoing.

Investors are subject to foreign exchange risks as to payments of principal and interest that may have important economic and tax consequences to them.





Principal, Interest Payments and Maturity

The 2022 notes are limited to €500,000,000 aggregate principal amount and will mature on May 20, 2022. The 2034 notes are limited to €500,000,000 aggregate principal amount and will mature on May 19, 2034.

The notes of each series will bear interest at a rate of 1.750% and 3.000%, respectively, accruing from May 20, 2014 or the most recent interest payment date to which interest has been paid or provided for. We pay interest on the 2022 notes annually in arrears on May 20 of each year, beginning on May 20, 2015, and we pay interest on the 2034 notes annually in arrears on May 19 of each year, beginning on May 19, 2015, in each case, to persons in whose names the notes are registered at the close of business on the preceding May 1. With respect to each series of notes, we compute the amount of interest payable on the basis of (i) the actual number of days in the period for which interest is being calculated and (ii) the actual number of days from (and including) the last date on which interest was paid on the notes of such series (or May 20, 2014, if no interest has been paid on the notes of such series) to (but excluding) the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

The notes may be registered for transfer or exchanged without payment of any charge (other than any tax or other governmental charge payable in connection therewith).

The notes do not have the benefit of any sinking fund and are not convertible or exchangeable.
 
Optional Redemption

We may redeem the notes of each series, in whole or in part, on any date that is not less than three months prior to the stated maturity thereof, at our option, at a redemption price (calculated by us) equal to the greater of:

(1) 100% of the principal amount of the notes to be redeemed; or

(2) the sum of the present values of the Remaining Scheduled Payments (as defined below) of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below) plus 15 basis points plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

At any time on or after the date that is three months prior to the maturity date of the 2022 notes or the 2034 notes, as applicable, we may also redeem some or all of the maturing notes, at our option, at a redemption price equal to 100% of the principal amount of the applicable notes being redeemed plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

“Comparable Government Bond Rate” means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes to be redeemed, if they were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond (as defined below) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by us.

“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by us, a German government bond whose maturity is closest to the maturity of the notes to be redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.






“Remaining Scheduled Payments” means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be deemed to be reduced by the amount of interest accrued thereon to such redemption date.

We will, or will cause the trustee on our behalf to, mail notice of a redemption to holders of the applicable notes to be redeemed by first-class mail (or otherwise transmit in accordance with applicable procedures of Euroclear/Clearstream) at least 30 and not more than 60 days prior to the date fixed for redemption. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the applicable notes or portions thereof called for redemption. On or before the redemption date, we will deposit with the paying agent or set aside, segregate and hold in trust (if we are acting as paying agent), funds sufficient to pay the redemption price of, and accrued and unpaid interest on, such notes to be redeemed on that redemption date. If fewer than all of the notes of the applicable series are to be redeemed, the trustee will select, not more than 60 days prior to the redemption date, the particular notes of such series or portions thereof for redemption from the outstanding notes of such series not previously called by such method as the trustee deems fair and appropriate and in accordance with the applicable procedures of the depositary; provided, however, that no notes of a principal amount of €100,000 or less shall be redeemed in part.
 
Payment of Additional Amounts

All payments of principal and interest on the notes by us are made free and clear of and without withholding or deduction for or on account of any present or future tax, assessment or other governmental charge imposed by the United States (or any political subdivision or taxing authority thereof or therein having power to tax) (a “Relevant Taxing Jurisdiction”), unless the withholding of such taxes, assessments or other governmental charge is required by law or the official interpretation or administration thereof. Subject to the exceptions and limitations set forth below, we pay as additional interest on notes such additional amounts (the “additional amounts”) as are necessary in order that the net payment by us of the principal of and interest on such notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or future tax, assessment or other governmental charge imposed by any Relevant Taxing Jurisdiction, will not be less than the amount provided in such notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply:
 
 
1.
to any tax, assessment or other governmental charge that is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds such note), or a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as:
 
 
a.
being or having been engaged in a trade or business in the United States or having or having had a permanent establishment in the Relevant Taxing Jurisdiction;
 
 
b.
having a current or former connection with the Relevant Taxing Jurisdiction (other than a connection arising solely as a result of the ownership of such notes, the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the Relevant Taxing Jurisdiction;
 
 
c.
being or having been a foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation for United States income tax purposes or a corporation that has accumulated earnings to avoid United States federal income tax;
 
 
d.
being or having been a “10-percent shareholder” of ITW as defined in section 871(h)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision; or
 





 
e.
being or having been a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in section 881(c)(3)(A) of the Code or any successor provisions;
 
 
2.
to any holder that is not the sole beneficial owner of such notes, or a portion of such notes, or that is a fiduciary, partnership or limited liability company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;
 
 
3.
to any tax, assessment or other governmental charge that would not have been imposed but for the failure of the holder or any other person to (a) submit an applicable United States Internal Revenue Service (“IRS”) Form W-8 (with any required attachments) to establish the status as a non-United States person as required for purposes of the portfolio interest exemption or IRS Form W-9 to establish the status as a United States person, or comply with other certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with a Relevant Taxing Jurisdiction of the holder or beneficial owner of such notes, if compliance is required by statute, by regulation of the Relevant Taxing Jurisdiction or by an applicable income tax treaty to which the Relevant Taxing Jurisdiction is a party as a precondition to exemption from such tax, assessment or
 
 
other governmental charge or (b) comply with any informational gathering and reporting requirements or take any similar action (including entering into any agreement with the IRS), in each case, that are required to obtain the maximum available exemption from withholding by a Relevant Taxing Jurisdiction that is available to payments received by or on behalf of the holder;
 
4.
to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a paying agent from the payment;
 
 
5.
to any tax, assessment or other governmental charge that would not have been imposed or withheld but for a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later;
 
 
6.
to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax, assessment or other governmental charge;
 
 
7.
to any withholding or deduction that is imposed on a payment and that is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive amending, supplementing or replacing such Directive, or any law implementing or complying with, or introduced in order to conform to, such Directive or Directives;
 
 
8.
to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any note, if such payment can be made without such withholding by at least one other paying agent;
 
 
9.
to any tax, assessment or other governmental charge that would not have been imposed or levied but for the presentation by the holder of any note, where presentation is required, for payment on a date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;
 





 
10.
to any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the beneficial owner being a bank (i) purchasing such notes in the ordinary course of its lending business or (ii) that is neither (A) buying such notes for investment purposes only nor (B) buying such notes for resale to a third-party that either is not a bank or holding such notes for investment purposes only;
 
 
11.
to any tax, assessment or other governmental charge imposed under sections 1471 through 1474 of the Code as of the issue date (or any amended or successor provisions), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to section 1471(b) of the Code or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code; or
 
 
12.
in the case of any combination of items (1) through (11) above.

The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading “—Payment of Additional Amounts,” we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

As used under this heading “—Payment of Additional Amounts” and under the heading “—Redemption for Tax Reasons,” the term “United States” means the United States of America, the states of the United States, and the District of Columbia, and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia, or any estate or trust the income of which is subject to United States federal income taxation regardless of its source.
 
Redemption for Tax Reasons

If, (a) as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of any Relevant Taxing Jurisdiction, or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings (including by virtue of a holding, judgment or order by a court of competent jurisdiction or a change in published administrative practice), which change or amendment is announced or becomes effective on or after the date of this prospectus supplement, we become or, based on a written opinion of independent counsel selected by us, are likely to become obligated to pay additional amounts as described herein under the heading “—Payment of Additional Amounts” with respect to the notes of either series, or (b) any act is taken by a Relevant Taxing Jurisdiction on or after the date of this prospectus supplement whether or not such act is taken with respect to us or any affiliate, that results in us being required or, based upon a written opinion of independent counsel selected by us, being likely to be required to pay such additional amounts, then we may at any time at our option redeem, in whole, but not in part, the notes of such series on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of their principal amount, together with accrued and unpaid interest on the notes being redeemed to, but excluding, the redemption date.

Covenants

The following covenants apply to the notes. Each of the covenants is subject to the provision for exempted indebtedness described below.

For your reference, we have provided below definitions of the capitalized terms used in the description of the covenants.






Limitation on Liens

We will not, nor will we permit any Restricted Subsidiary to, issue, assume or guarantee any debt for money borrowed if such debt is secured by a mortgage, security interest, lien, pledge or other encumbrance (referred to in this prospectus supplement as a “lien”) on any Principal Property, or on any shares of stock or indebtedness of any Restricted Subsidiary, without in any such case effectively providing that the notes (and if we so choose, any other debt or obligation that ranks equally with the notes) are secured equally and ratably with, or prior to, such debt. These restrictions do not apply to debt secured by:
 
 
•
 
liens on property of a corporation existing at the time it becomes a subsidiary or at the time it is merged into or consolidated with or purchased by us or a subsidiary;
 
 
•
 
liens on property existing at the time of its acquisition and certain purchase money liens;
 
 
•
 
liens securing the cost of construction of new plants, incurred within 180 days of completion of construction;
 
 
•
 
liens securing the debt of a Restricted Subsidiary owing to us or another Restricted Subsidiary;
 
 
•
 
liens in connection with the issuance of certain industrial revenue bonds or similar financings;
 
 
•
 
liens existing on the date of the indenture;
 
 
•
 
certain other liens specified in the indenture that are customarily exempted from restrictions in offerings of securities similar to the notes; and
 
 
•
 
any extensions, renewals or replacements, in whole or in part, of any lien referred to above, as long as the principal amount of debt secured by any such lien does not increase and the lien is limited to all or part of the same property that previously secured the lien.
 
Limitation on Sale and Lease-Back

We will not, nor will we permit any Restricted Subsidiary to, engage in a sale and lease-back transaction of any Principal Property (except for certain temporary leases and leases with a Restricted Subsidiary) unless:
 
 
•
 
we or the Restricted Subsidiary could (subject to the limitation on liens) incur debt secured by a lien on the Principal Property to be leased without equally and ratably securing the notes; or
 
 
•
 
within 180 days following such a transaction, we retire long-term debt equal to the value of the transaction.

Exempted Indebtedness

We and our Restricted Subsidiaries may incur debt and enter into sale and lease-back transactions without regard to the two covenants described above if the sum of such debt and the value of such sale and lease-back transactions on a cumulative basis does not exceed 10% of the Consolidated Net Tangible Assets (which is total assets less current liabilities, goodwill and other intangibles) as shown on our audited consolidated balance sheet in our latest annual report to our stockholders.






Definitions

“Principal Property” means any manufacturing plant or other facility within the United States that we or a subsidiary own or lease, unless our Board of Directors determines that the plant or facility, together with any others so determined, is not of material importance to the total business of us and our Restricted Subsidiaries.

“Restricted Subsidiary” means any subsidiary (other than a subsidiary principally engaged in leasing or financing installment receivables or financing operations outside the United States) that owns or leases a Principal Property if:
 
 
•
 
substantially all of its property is located in the United States;
 
 
•
 
substantially all of its business is carried on in the United States; or
 
 
•
 
it is incorporated in any State of the United States.

Consolidation or Merger

Under the terms of the indenture, we may consolidate or merge with another corporation or sell, convey or lease all or substantially all of our assets to another corporation or entity. The successor or acquiring corporation or entity must expressly assume all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the notes and performance of the covenants (it being understood that any obligation to pay Additional Amounts shall be determined mutatis mutandis, by treating the jurisdiction under the laws of which such successor or acquiring corporation or entity is organized and any political subdivision or taxing authority as therein having the power to tax, as a Relevant Taxing Jurisdiction). If, upon any such consolidation, merger, sale, conveyance or lease, or upon any such consolidation, merger, sale, conveyance or lease with respect to a Restricted Subsidiary, any Principal Property or shares of stock or indebtedness of a Restricted Subsidiary would become subject to a lien that is not in favor of us, a Restricted Subsidiary or any such successor or acquiring corporation or entity, we must, before or at the time of such transaction, effectively provide that the notes will be secured (if we so choose, equally and ratably with any other obligation of us or a Restricted Subsidiary that ranks equally with the notes) by a direct lien on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary that is prior to all liens other than pre-existing liens on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary, and that will continue as long as such Principal Property, shares of stock or indebtedness is subject to the lien arising in such transaction.
 
Events of Default

An event of default for any series of the notes includes the following:
 
 
•
 
failure to pay any installment of interest, including any additional amounts, on the notes of that series that continues for 30 days after such payment is due;
 
 
•
 
failure to pay principal of or premium, if any, on the notes of that series when due;
 
 
•
 
failure to perform any of the other covenants or agreements in the notes or in the indenture and relating to the notes of that series that continues for 60 days after notice to us by the trustee or holders of at least 25% in aggregate principal amount of the outstanding notes of that series; or
 
 
•
 
certain events of bankruptcy, insolvency or reorganization of us.






An event of default with respect to a particular series of notes issued under the indenture does not necessarily constitute an event of default with respect to any other series. The indenture provides that the trustee will, with certain exceptions, notify the holders of the affected series of notes of the occurrence of any of the events of default listed above (not including any applicable grace period and irrespective of the giving of notice as described in the third bullet) known to the trustee within 90 days after the occurrence thereof. Except in the case of a default in the payment of principal of, or premium, if any, or interest on a series of the notes, the trustee may withhold notice if it determines in good faith that withholding notice is in the interest of the holders.

If an event of default is continuing for any series of the notes, the trustee or the holders of not less than 25% in aggregate principal amount of the affected series of notes then outstanding may declare the principal amount of that series of the notes to be due and payable immediately. In such a case, subject to certain conditions, the holders of a majority in aggregate principal amount of that series of the notes then outstanding can annul the declaration and waive past defaults.

We are required to provide an annual officers’ certificate to the trustee concerning our compliance with certain covenants we make in the indenture. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is not obligated to exercise any of its rights or powers at the request or direction of any of the holders of notes unless the holders have offered the trustee security or indemnity reasonably satisfactory to the trustee. The holders of a majority in principal amount of the outstanding notes of each series affected by an event of default may direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture or exercising any of the trustee’s trusts or powers with respect to that series of the notes; however, the trustee may decline to follow such direction in certain circumstances.

If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. The amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default. Neither the trustee nor the paying agent shall have any responsibility for effecting such currency conversions.

Modification and Amendment of the Indenture

We may enter into supplemental indentures with the trustee without the consent of the holders of the notes to, among other things:
 
 
•
 
evidence the assumption by a successor corporation of our obligations under the indenture;
 
 
•
 
appoint additional or separate trustees to act under the indenture;
 
 
•
 
add covenants for the protection of the holders of the notes; and
 
 
•
 
cure any ambiguity or correct any inconsistency in the indenture.
 
With the consent of the holders of a majority in aggregate principal amount of the notes of each affected series issued under the indenture at the time outstanding, we may execute supplemental indentures with the trustee to add provisions or change or eliminate any provision of the indenture or any supplemental indenture relating to such series or to modify the rights of the holders of those notes. However, no such supplemental indenture will (1) extend the fixed maturity of any notes, reduce the principal amount (including in the case of discounted notes the amount payable upon acceleration of the maturity thereof), reduce the rate or extend the time of payment of any interest, reduce any premium payable upon redemption, or change the currency in which any notes are payable, without the





consent of each holder of affected notes, or (2) reduce the aforesaid majority in principal amount of the notes of any series, the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all notes of such series.

Defeasance and Discharge of Indenture or Certain Obligations; Satisfaction and Discharge

At our option, we (1) will be discharged from all obligations under the indenture in respect of the notes of a series (except for certain obligations to register the transfer of or to exchange such notes, replace stolen, lost or mutilated notes, maintain paying agencies and hold monies for payment in trust) or (2) need not comply with certain covenants of the indenture that are applicable to each series of notes (including the limitation on liens and the limitation on sale and lease-back) and will not be limited by the restrictions in the indenture with respect to merger, consolidation or sale, conveyance or lease of substantially all of our assets, in each case if we irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due and satisfy other conditions in the indenture. In order to select either option, we must provide the trustee, among other things, an opinion of counsel based on a ruling from or published by the Internal Revenue Service (in the case of option (1)), or an opinion of counsel (in the case of option (2)), in each case to the effect that beneficial owners of the applicable notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of our exercise of the option, and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as if we had not exercised such option.

In the event we exercise our option under (2) above with respect to any series of notes and the notes of such series are declared due and payable because of the occurrence of any event of default other than default with respect to such obligations, the amount of money and Federal Republic of Germany obligations on deposit with the trustee will be sufficient to pay amounts due on the notes of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the notes of that series at the time of the acceleration resulting from such event of default. We would remain liable, however, for such payments.

In addition to the foregoing, at our option, we will be discharged from all our obligations under the indenture (except for certain obligations to register the transfer of or to exchange such notes and provide compensation and reimbursement of expenses to the trustee) in respect of the notes of a series of which all of the notes have been delivered to the trustee for cancellation (other than destroyed, lost or stolen notes that have been replaced or paid) or that have matured or will mature or be redeemed within one year (where arrangements satisfactory to the trustee for giving notice of redemption have been made), if we, among other things, irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due.

“Federal Republic of Germany obligations” means direct noncallable obligations of the Federal Republic of Germany, noncallable obligations the payment of the principal of and interest on which is fully guaranteed by the Federal Republic of Germany, and noncallable obligations on which the full faith and credit of the Federal Republic of Germany is pledged to the payment of the principal thereof and interest thereon.
 
Governing Law

The indenture and the notes will be governed by, and construed and enforced in accordance with, the laws of the State of Illinois applicable to agreements made or instruments entered into and, in each case, performed in said state.

Relationship with Trustee

The Bank of New York Mellon Trust Company, N.A. currently serves as the trustee with respect to certain of our other outstanding debt securities.






Open Market Purchases

We may at any time and from time to time purchase notes in the open market or otherwise.


Exhibit
Exhibit 4(l)

Description of 1.25% Euro Notes due 2023 and 2.125% Euro Notes due 2030
Registered Pursuant to Section 12
of the Securities Exchange Act of 1934
    
The following summary of the Company’s above referenced debt securities, each issued as a separate class thereof, is based on and qualified by the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between Illinois Tool Works Inc. and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”), and the 1.25% Euro Notes due 2023 and the 2.125% Euro Notes due 2030 (collectively, the “Notes”). For a complete description of the terms and provisions of the Notes, refer to the Indenture and to the Officers’ Certificate establishing the terms, and setting forth the forms, of the Notes, each of, which is filed as an exhibit to this Annual Report on Form 10-K. Throughout this exhibit, references to “we,” “our,” and “us” refer to Illinois Tool Works Inc.

General

On May 19, 2015, we registered €500,000,000 aggregate principal amount of 1.250% notes due 2023 (the “2023 notes”) and €500,000,000 aggregate principal amount of 2.125% notes due 2030 (the “2030 notes,” and together with the 2023 notes referred to in this section, the “notes”). The notes were issued each as a separate series of debt securities under the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between us and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”).

The 2023 notes are traded on the New York Stock Exchange under the symbol “ITW23.” The 2030 notes are traded on the New York Stock Exchange under the symbol “ITW30.”

We have issued a significant amount of other debt securities under the Indenture that have neither been registered pursuant to Section 12 of the Securities Exchange Act of 1934 nor listed on the NYSE. You should refer to our description of the amount of debt outstanding as disclosed in our Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

Ranking

The notes are our direct, unsecured obligations. They rank equally with all of our other unsecured and unsubordinated indebtedness from time to time outstanding. The notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and structurally subordinated to all of the existing and future indebtedness and other liabilities of our subsidiaries.

Payments in Euros

All payments of interest and principal, including payments made upon any redemption of the notes, will be payable in euros. If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. In such circumstances, the amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default under the notes or the indenture governing the notes. Neither the trustee nor the paying agent shall have any responsibility for any calculation or conversion in connection with the foregoing.

Investors are subject to foreign exchange risks as to payments of principal and interest that may have important economic and tax consequences to them.


Principal, Interest Payments and Maturity

The 2023 notes are limited to €500,000,000 aggregate principal amount and will mature on May 22, 2023. The 2030 notes are limited to €500,000,000 aggregate principal amount and will mature on May 22, 2030.

The notes of each series bear interest at a rate of 1.25% and 2.125%, respectively, accruing from May 22, 2015 or the most recent interest payment date to which interest has been paid or provided for. We pay interest on the notes annually in arrears on May 22 of each year, beginning on May 22, 2016, to persons in whose names the notes are registered at the close of business on the preceding May 1. With respect to each series of notes, we compute the amount of interest payable on the basis of (i) the actual number of days in the period for which interest is being calculated and (ii) the actual number of days from (and including) the last date on which interest was paid on the notes of such series (or May 22, 2015, if no interest has been paid on the notes of such series) to (but excluding) the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

The notes may be registered for transfer or exchanged without payment of any charge (other than any tax or other governmental charge payable in connection therewith).

The notes do not have the benefit of any sinking fund and are not convertible or exchangeable.

Optional Redemption

We may redeem the notes of each series, in whole or in part, on any date that is not less than three months prior to the stated maturity thereof, at our option, at a redemption price (calculated by us) equal to the greater of:

(1) 100% of the principal amount of the notes to be redeemed; or

(2) the sum of the present values of the Remaining Scheduled Payments (as defined below) of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below) plus 15 basis points for the 2023 notes and 25 basis points for the 2030 notes, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

At any time on or after the date that is three months prior to the maturity date of the 2023 notes or the 2030 notes, if applicable, we may also redeem some or all of the maturing 2023 notes or 2030 notes, as applicable, at our option, at a redemption price equal to 100% of the principal amount of the applicable notes being redeemed, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

“Comparable Government Bond Rate” means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes to be redeemed, if they were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond (as defined below) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by us.

“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by us, a German government bond whose maturity is closest to the maturity of the notes to be redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.


“Remaining Scheduled Payments” means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be deemed to be reduced by the amount of interest accrued thereon to such redemption date.

We will, or will cause the trustee on our behalf to, mail notice of a redemption to holders of the applicable notes to be redeemed by first-class mail (or otherwise transmit in accordance with applicable procedures of Euroclear/Clearstream) at least 30 and not more than 60 days prior to the date fixed for redemption. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the applicable notes or portions thereof called for redemption. On or before the redemption date, we will deposit with the paying agent or set aside, segregate and hold in trust (if we are acting as paying agent), funds sufficient to pay the redemption price of, and accrued and unpaid interest on, such notes to be redeemed on that redemption date. If fewer than all of the notes of the applicable series are to be redeemed, the trustee will select, not more than 60 days prior to the redemption date, the particular notes of such series or portions thereof for redemption from the outstanding notes of such series not previously called by such method as the trustee deems fair and appropriate and in accordance with the applicable procedures of the depositary; provided, however, that no notes of a principal amount of €100,000 or less shall be redeemed in part.

Payment of Additional Amounts

All payments of principal and interest on the notes by us are made free and clear of and without withholding or deduction for or on account of any present or future tax, assessment or other governmental charge imposed by the United States (or any political subdivision or taxing authority thereof or therein having power to tax) (a “Relevant Taxing Jurisdiction”), unless the withholding of such taxes, assessments or other governmental charge is required by law or the official interpretation or administration thereof. Subject to the exceptions and limitations set forth below, we pay as additional interest on notes such additional amounts (the “additional amounts”) as are necessary in order that the net payment by us of the principal of and interest on such notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or future tax, assessment or other governmental charge imposed by any Relevant Taxing Jurisdiction, will not be less than the amount provided in such notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply:
 
 
1.
to any tax, assessment or other governmental charge that is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds such note), or a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as:
 
 
a.
being or having been engaged in a trade or business in a Relevant Taxing Jurisdiction or having or having had a permanent establishment in the Relevant Taxing Jurisdiction;
 
 
b.
having a current or former connection with the Relevant Taxing Jurisdiction (other than a connection arising solely as a result of the ownership of such notes, the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the Relevant Taxing Jurisdiction;
 
 
c.
being or having been a foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation for United States income tax purposes or a corporation that has accumulated earnings to avoid United States federal income tax;
 
 
d.
being or having been a “10-percent shareholder” of ITW as defined in section 871(h)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision; or


 
 
e.
being or having been a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in section 881(c)(3)(A) of the Code or any successor provisions;
 
 
2.
to any holder that is not the sole beneficial owner of such notes, or a portion of such notes, or that is a fiduciary, partnership or limited liability company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;
 
 
3.
to any tax, assessment or other governmental charge that would not have been imposed but for the failure of the holder, beneficial owner or any other person to (a) submit an applicable United States Internal Revenue Service (“IRS”) Form W-8 (with any required attachments) to establish the status as a non-United States person as required for purposes of the portfolio interest exemption or IRS Form W-9 to establish the status as a United States person, or comply with other certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with a Relevant Taxing Jurisdiction of the holder or beneficial owner of such notes, if compliance is required by statute, by regulation of the Relevant Taxing Jurisdiction or by an applicable income tax treaty to which the Relevant Taxing Jurisdiction is a party as a precondition to exemption from such tax, assessment or other governmental charge or (b) comply with any information gathering and reporting requirements or take any similar action (including entering into any agreement with the IRS), in each case, that is required to obtain the maximum available exemption from withholding by a Relevant Taxing Jurisdiction that is available to payments received by or on behalf of the holder or beneficial owner;
 
 
4.
to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a paying agent from the payment;
 
 
5.
to any tax, assessment or other governmental charge that would not have been imposed or withheld but for a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later;
 
 
6.
to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax, assessment or other governmental charge;
 
 
7.
to any withholding or deduction that is imposed on a payment and that is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive amending, supplementing or replacing such Directive, or any law implementing or complying with, or introduced in order to conform to, such Directive or Directives;
 
 
8.
to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any note, if such payment can be made without such withholding by at least one other paying agent;
 
 
9.
to any tax, assessment or other governmental charge that would not have been imposed or levied but for the presentation by the holder of any note, where presentation is required, for payment on a date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;
 


 
10.
to any tax, assessment or other governmental charge imposed under sections 1471 through 1474 of the Code as of the issue date (or any amended or successor provisions), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to section 1471(b) of the Code or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code; or
 
 
11.
in the case of any combination of items (1) through (10) above.

The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading “— Payment of Additional Amounts,” we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

As used under this heading “— Payment of Additional Amounts” and under the heading “— Redemption for Tax Reasons,” the term “United States” means the United States of America, the states of the United States, and the District of Columbia, and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia, or any estate the income of which is subject to United States federal income taxation regardless of its source, or a trust that (1) is subject to the primary supervision of a United States court and the control of one or more “United States persons” (within the meaning of section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
 
Redemption for Tax Reasons

If, (a) as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of any Relevant Taxing Jurisdiction, or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings (including by virtue of a holding, judgment or order by a court of competent jurisdiction or a change in published administrative practice), which change or amendment is announced or becomes effective on or after the date of this prospectus supplement, we become or, based on a written opinion of independent counsel selected by us, are likely to become obligated to pay additional amounts as described herein under the heading “— Payment of Additional Amounts” with respect to the notes of either series, or (b) any act is taken by a Relevant Taxing Jurisdiction on or after the date of this prospectus supplement whether or not such act is taken with respect to us or any affiliate, that results in us being required or, based upon a written opinion of independent counsel selected by us, being likely to be required to pay such additional amounts, then we may at any time at our option redeem, in whole, but not in part, the notes of such series on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of their principal amount, together with accrued and unpaid interest on the notes being redeemed to, but excluding, the redemption date.

Covenants

The following covenants apply to the notes. Each of the covenants is subject to the provision for exempted indebtedness described below.

For your reference, we have provided below definitions of the capitalized terms used in the description of the covenants.

Limitation on Liens

We will not, nor will we permit any Restricted Subsidiary to, issue, assume or guarantee any debt for money borrowed if such debt is secured by a mortgage, security interest, lien, pledge or other encumbrance (referred


to in this prospectus supplement as a “lien”) on any Principal Property, or on any shares of stock or indebtedness of any Restricted Subsidiary, without in any such case effectively providing that the notes (and if we so choose, any other debt or obligation that ranks equally with the notes) are secured equally and ratably with, or prior to, such debt. These restrictions do not apply to debt secured by:
 
 
•
 
liens on property of a corporation existing at the time it becomes a subsidiary or at the time it is merged into or consolidated with or purchased by us or a subsidiary;
 
 
•
 
liens on property existing at the time of its acquisition and certain purchase money liens;
 
 
•
 
liens securing the cost of construction of new plants, incurred within 180 days of completion of construction;
 
 
•
 
liens securing the debt of a Restricted Subsidiary owing to us or another Restricted Subsidiary;
 
 
•
 
liens in connection with the issuance of certain industrial revenue bonds or similar financings;
 
 
•
 
liens existing on the date of the indenture;
 
 
•
 
certain other liens specified in the indenture that are customarily exempted from restrictions in offerings of securities similar to the notes; and
 
 
•
 
any extensions, renewals or replacements, in whole or in part, of any lien referred to above, as long as the principal amount of debt secured by any such lien does not increase and the lien is limited to all or part of the same property that previously secured the lien.
 
Limitation on Sale and Lease-Back

We will not, nor will we permit any Restricted Subsidiary to, engage in a sale and lease-back transaction of any Principal Property (except for certain temporary leases and leases with a Restricted Subsidiary) unless:
 
 
•
 
we or the Restricted Subsidiary could (subject to the limitation on liens) incur debt secured by a lien on the Principal Property to be leased without equally and ratably securing the notes; or
 
 
•
 
within 180 days following such a transaction, we retire long-term debt equal to the value of the transaction.

Exempted Indebtedness

We and our Restricted Subsidiaries may incur debt and enter into sale and lease-back transactions without regard to the two covenants described above if the sum of such debt and the value of such sale and lease-back transactions on a cumulative basis does not exceed 10% of the Consolidated Net Tangible Assets (which is total assets less current liabilities, goodwill and other intangibles) as shown on our audited consolidated balance sheet in our latest annual report to our stockholders.



Definitions

“Principal Property” means any manufacturing plant or other facility within the United States that we or a subsidiary own or lease, unless our Board of Directors determines that the plant or facility, together with any others so determined, is not of material importance to the total business of us and our Restricted Subsidiaries.

“Restricted Subsidiary” means any subsidiary (other than a subsidiary principally engaged in leasing or financing installment receivables or financing operations outside the United States) that owns or leases a Principal Property if:
 
 
•
 
substantially all of its property is located in the United States;
 
 
•
 
substantially all of its business is carried on in the United States; or
 
 
•
 
it is incorporated in any State of the United States.

Consolidation or Merger

Under the terms of the indenture, we may consolidate or merge with another corporation or sell, convey or lease all or substantially all of our assets to another corporation or entity. The successor or acquiring corporation or entity must expressly assume all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the notes and performance of the covenants (it being understood that any obligation to pay Additional Amounts shall be determined mutatis mutandis, by treating the jurisdiction under the laws of which such successor or acquiring corporation or entity is organized and any political subdivision or taxing authority as therein having the power to tax, as a Relevant Taxing Jurisdiction). If, upon any such consolidation, merger, sale, conveyance or lease, or upon any such consolidation, merger, sale, conveyance or lease with respect to a Restricted Subsidiary, any Principal Property or shares of stock or indebtedness of a Restricted Subsidiary would become subject to a lien that is not in favor of us, a Restricted Subsidiary or any such successor or acquiring corporation or entity, we must, before or at the time of such transaction, effectively provide that the notes will be secured (if we so choose, equally and ratably with any other obligation of us or a Restricted Subsidiary that ranks equally with the notes) by a direct lien on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary that is prior to all liens other than pre-existing liens on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary, and that will continue as long as such Principal Property, shares of stock or indebtedness is subject to the lien arising in such transaction.
 
Events of Default

An event of default for any series of the notes includes the following:
 
 
•
 
failure to pay any installment of interest, including any additional amounts on the notes of that series that continues for 30 days after such payment is due;
 
 
•
 
failure to pay principal of or premium, if any, on the notes of that series when due;
 
 
•
 
failure to perform any of the other covenants or agreements in the notes or in the indenture and relating to the notes of that series that continues for 60 days after notice to us by the trustee or holders of at least 25% in aggregate principal amount of the outstanding notes of that series; or
 
 
•
 
certain events of bankruptcy, insolvency or reorganization of us.


An event of default with respect to a particular series of notes issued under the indenture does not necessarily constitute an event of default with respect to any other series. The indenture provides that the trustee will, with certain exceptions, notify the holders of the affected series of notes of the occurrence of any of the events of default listed above (not including any applicable grace period and irrespective of the giving of notice as described in the third bullet) known to the trustee within 90 days after the occurrence thereof. Except in the case of a default in the payment of principal of, or premium, if any, or interest on a series of the notes, the trustee may withhold notice if it determines in good faith that withholding notice is in the interest of the holders.

If an event of default is continuing for any series of the notes, the trustee or the holders of not less than 25% in aggregate principal amount of the affected series of notes then outstanding may declare the principal amount of that series of the notes to be due and payable immediately. In such a case, subject to certain conditions, the holders of a majority in aggregate principal amount of that series of the notes then outstanding can annul the declaration and waive past defaults.

We are required to provide an annual officers’ certificate to the trustee concerning our compliance with certain covenants we make in the indenture. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is not obligated to exercise any of its rights or powers at the request or direction of any of the holders of notes unless the holders have offered the trustee security or indemnity reasonably satisfactory to the trustee. The holders of a majority in principal amount of the outstanding notes of each series affected by an event of default may direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture or exercising any of the trustee’s trusts or powers with respect to that series of the notes; however, the trustee may decline to follow such direction in certain circumstances.

If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. The amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default. Neither the trustee nor the paying agent shall have any responsibility for effecting such currency conversions.

Modification and Amendment of the Indenture

We may enter into supplemental indentures with the trustee without the consent of the holders of the notes to, among other things:
 
 
•
 
evidence the assumption by a successor corporation of our obligations under the indenture;
 
 
•
 
appoint additional or separate trustees to act under the indenture;
 
 
•
 
add covenants for the protection of the holders of the notes; and
 
 
•
 
cure any ambiguity or correct any inconsistency in the indenture.
 
With the consent of the holders of a majority in aggregate principal amount of the notes of each affected series issued under the indenture at the time outstanding, we may execute supplemental indentures with the trustee to add provisions or change or eliminate any provision of the indenture or any supplemental indenture relating to such series or to modify the rights of the holders of those notes. However, no such supplemental indenture will (1) extend the fixed maturity of any notes, reduce the principal amount (including in the case of discounted notes the amount payable upon acceleration of the maturity thereof), reduce the rate or extend the time of payment of any interest, reduce any premium payable upon redemption, or change the currency in which any notes are payable,


without the consent of each holder of affected notes, or (2) reduce the aforesaid majority in principal amount of the notes of any series, the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all notes of such series.

Defeasance and Discharge of Indenture or Certain Obligations; Satisfaction and Discharge

At our option, we (1) will be discharged from all obligations under the indenture in respect of the notes of a series (except for certain obligations to register the transfer of or to exchange such notes, replace stolen, lost or mutilated notes, maintain paying agencies and hold monies for payment in trust) or (2) need not comply with certain covenants of the indenture that are applicable to each series of notes (including the limitation on liens and the limitation on sale and lease-back) and will not be limited by the restrictions in the indenture with respect to merger, consolidation or sale, conveyance or lease of substantially all of our assets, in each case if we irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due and satisfy other conditions in the indenture. In order to select either option, we must provide the trustee, among other things, an opinion of counsel based on a ruling from or published by the Internal Revenue Service (in the case of option (1)), or an opinion of counsel (in the case of option (2)), in each case to the effect that beneficial owners of the applicable notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of our exercise of the option, and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as if we had not exercised such option.

In the event we exercise our option under (2) above with respect to any series of notes and the notes of such series are declared due and payable because of the occurrence of any event of default other than default with respect to such obligations, the amount of money and Federal Republic of Germany obligations on deposit with the trustee will be sufficient to pay amounts due on the notes of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the notes of that series at the time of the acceleration resulting from such event of default. We would remain liable, however, for such payments.

In addition to the foregoing, at our option, we will be discharged from all our obligations under the indenture (except for certain obligations to register the transfer of or to exchange such notes and provide compensation and reimbursement of expenses to the trustee) in respect of the notes of a series of which all of the notes have been delivered to the trustee for cancellation (other than destroyed, lost or stolen notes that have been replaced or paid) or that have matured or will mature or be redeemed within one year (where arrangements satisfactory to the trustee for giving notice of redemption have been made), if we, among other things, irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due.

“Federal Republic of Germany obligations” means direct noncallable obligations of the Federal Republic of Germany, noncallable obligations the payment of the principal of and interest on which is fully guaranteed by the Federal Republic of Germany, and noncallable obligations on which the full faith and credit of the Federal Republic of Germany is pledged to the payment of the principal thereof and interest thereon.
 
Governing Law

The indenture and the notes will be governed by, and construed and enforced in accordance with, the laws of the State of Illinois applicable to agreements made or instruments entered into and, in each case, performed in said state.

Relationship with Trustee and Paying Agent

The Bank of New York Mellon Trust Company, N.A. currently serves as the trustee with respect to certain of our other outstanding debt securities, and The Bank of New York Mellon, London Branch currently serves as the paying agent with respect to certain of our other outstanding debt securities.



Open Market Purchases

We may at any time and from time to time purchase notes in the open market or otherwise.

Exhibit
Exhibit 4(m)

Description of 0.250% Euro Notes due 2024, 0.625% Euro Notes due 2027 and 1.00% Euro Notes due 2031
Registered Pursuant to Section 12
of the Securities Exchange Act of 1934

The following summary of the Company’s above referenced debt securities, each issued as a separate class thereof, is based on and qualified by the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between Illinois Tool Works Inc. and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”), and the 0.250% Euro Notes due 2024, the 0.625% Euro Notes due 2027 and the 1.00% Euro Notes due 2031 (collectively, the “Notes”). For a complete description of the terms and provisions of the Notes, refer to the Indenture and to the Officers’ Certificate establishing the terms, and setting forth the forms, of the Notes, each of which is filed as an exhibit to this Annual Report on Form 10-K. Throughout this exhibit, references to “we,” “our,” and “us” refer to Illinois Tool Works Inc.

General

On May 29, 2019, we registered €600,000,000 aggregate principal amount of 0.250% Notes due 2024 (the “2024 notes”), €500,000,000 aggregate principal amount of 0.625% Notes due 2027 (the “2027 notes”) and €500,000,000 aggregate principal amount of 1.000% Notes due 2031 (the “2031 notes,” and together with the 2024 notes and the 2027 notes referred to in this section, the “notes”). The notes were issued each as a separate series of debt securities under the Indenture, dated November 1, 1986, as supplemented by a First Supplemental Indenture, dated May 1, 1990, between us and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “trustee”), with certain terms of each series of notes being set forth in an officers’ certificate (together, the “indenture”).

The 2024 notes are traded on the New York Stock Exchange under the symbol “ITW24A.” The 2027 notes are traded on the New York Stock Exchange under the symbol “ITW27.” The 2031 notes are traded on the New York Stock Exchange under the symbol “ITW31.”

We have issued a significant amount of other debt securities under the Indenture that have neither been registered pursuant to Section 12 of the Securities Exchange Act of 1934 nor listed on the NYSE. You should refer to our description of the amount of debt outstanding as disclosed in our Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

Ranking

The notes are our direct, unsecured obligations. They rank equally with all of our other unsecured and unsubordinated indebtedness from time to time outstanding. The notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness and structurally subordinated to all of the existing and future indebtedness and other liabilities of our subsidiaries.

Payments in Euros

All payments of interest and principal, including payments made upon any redemption of the notes, will be payable in euros. If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. In such circumstances, the amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default under the notes or the indenture governing the notes. Neither the trustee nor the paying agent shall have any responsibility for any calculation or conversion in connection with the foregoing.



Investors are subject to foreign exchange risks as to payments of principal and interest that may have important economic and tax consequences to them.

Principal, Interest Payments and Maturity

The 2024 notes are limited to €600,000,000 aggregate principal amount and will mature on December 5, 2024. The 2027 notes are limited to €500,000,000 aggregate principal amount and will mature on December 5, 2027. The 2031 notes are limited to €500,000,000 aggregate principal amount and will mature on June 5, 2031.

The notes of each series bear interest at a rate of 0.250%, 0.625% and 1.000%, respectively, accruing from June 5, 2019. We pay interest on the 2024 notes and the 2027 notes annually in arrears on December 5 of each year, beginning on December 5, 2019, to persons in whose names the notes are registered at the close of business on the preceding December 1. We will pay interest on the 2031 notes annually in arrears on June 5 of each year, beginning on June 5, 2020, to persons in whose names the notes are registered at the close of business on the preceding June 1. With respect to each series of notes, we compute the amount of interest payable on the basis of (i) the actual number of days in the period for which interest is being calculated and (ii) the actual number of days from (and including) the last date on which interest was paid on the notes of such series (or June 5, 2019, if no interest has been paid on the notes of such series) to (but excluding) the next scheduled interest payment date. This payment convention is referred to as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

The notes may be registered for transfer or exchanged without payment of any charge (other than any tax or other governmental charge payable in connection therewith).

The notes do not have the benefit of any sinking fund and are not convertible or exchangeable.
    
Optional Redemption

We may redeem the notes of each series, in whole or in part, on any date that is not less than three months prior to the stated maturity thereof, at our option, at a redemption price (calculated by us) equal to the greater of:

(1) 100% of the principal amount of the notes to be redeemed; or

(2) the sum of the present values of the Remaining Scheduled Payments (as defined below) of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on an annual basis (ACTUAL/ACTUAL (ICMA)) at the applicable Comparable Government Bond Rate (as defined below) plus 15 basis points for the 2024 notes, 20 basis points for the 2027 notes and 20 basis points for the 2031 notes, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

At any time on or after the date that is three months prior to the maturity date of the 2024 notes, the 2027 notes or the 2031 notes, as applicable, we may also redeem some or all of the maturing 2024 notes, 2027 notes or 2031 notes, as applicable, at our option, at a redemption price equal to 100% of the principal amount of the applicable notes being redeemed, plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the redemption date.

“Comparable Government Bond Rate” means, with respect to any redemption date, the price, expressed as a percentage (rounded to three decimal places, with 0.0005 being rounded upwards), at which the gross redemption yield on the notes to be redeemed, if they were to be purchased at such price on the third business day prior to the date fixed for redemption, would be equal to the gross redemption yield on such business day of the Comparable Government Bond (as defined below) on the basis of the middle market price of the Comparable Government Bond prevailing at 11:00 a.m. (London time) on such business day as determined by an independent investment bank selected by us.


“Comparable Government Bond” means, in relation to any Comparable Government Bond Rate calculation, at the discretion of an independent investment bank selected by us, a German government bond whose maturity is closest to the maturity of the notes to be redeemed, or if such independent investment bank in its discretion determines that such similar bond is not in issue, such other German government bond as such independent investment bank may, with the advice of three brokers of, and/or market makers in, German government bonds selected by us, determine to be appropriate for determining the Comparable Government Bond Rate.

“Remaining Scheduled Payments” means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment thereon will be deemed to be reduced by the amount of interest accrued thereon to such redemption date.

We will, or will cause the trustee on our behalf to, mail notice of a redemption to holders of the applicable notes to be redeemed by first-class mail (or otherwise transmit in accordance with applicable procedures of Euroclear/Clearstream) at least 30 and not more than 60 days prior to the date fixed for redemption. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the applicable notes or portions thereof called for redemption. On or before the redemption date, we will deposit with the paying agent or set aside, segregate and hold in trust (if we are acting as paying agent), funds sufficient to pay the redemption price of, and accrued and unpaid interest on, such notes to be redeemed on that redemption date. If fewer than all of the notes of the applicable series are to be redeemed, the notes to be redeemed shall be selected in accordance with the procedures of the clearing systems, and in the case the notes are no longer in global form or the clearing systems have no procedures, the trustee will select, not more than 60 days prior to the redemption date, the particular notes of such series or portions thereof for redemption from the outstanding notes of such series not previously called by such method as the trustee deems fair and appropriate and in accordance with the applicable procedures of the depositary; provided, however, that no notes of a principal amount of €100,000 or less shall be redeemed in part.

Payment of Additional Amounts

All payments of principal and interest on the notes by us are made free and clear of and without withholding or deduction for or on account of any present or future tax, assessment or other governmental charge imposed by the United States (or any political subdivision or taxing authority thereof or therein having power to tax) (a “Relevant Taxing Jurisdiction”), unless the withholding of such taxes, assessments or other governmental charge is required by law or the official interpretation or administration thereof. Subject to the exceptions and limitations set forth below, we pay as additional interest on notes such additional amounts (the “additional amounts”) as are necessary in order that the net payment by us of the principal of and interest on such notes to a holder who is not a United States person (as defined below), after withholding or deduction for any present or future tax, assessment or other governmental charge imposed by any Relevant Taxing Jurisdiction, will not be less than the amount provided in such notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply:
 
 
1.
to any tax, assessment or other governmental charge that is imposed by reason of the holder (or the beneficial owner for whose benefit such holder holds such note), or a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as:
 
 
a.
being or having been engaged in a trade or business in a Relevant Taxing Jurisdiction or having or having had a permanent establishment in the Relevant Taxing Jurisdiction;
 


 
b.
having a current or former connection with the Relevant Taxing Jurisdiction (other than a connection arising solely as a result of the ownership of such notes, the receipt of any payment or the enforcement of any rights hereunder), including being or having been a citizen or resident of the Relevant Taxing Jurisdiction;
 
 
c.
being or having been a personal holding company, a passive foreign investment company or a controlled foreign corporation for United States income tax purposes or a corporation that has accumulated earnings to avoid United States federal income tax;
 
 
d.
being or having been a “10-percent shareholder” of ITW as defined in section 871(h)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision; or
 
 
e.
being or having been a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in section 881(c)(3)(A) of the Code or any successor provisions;
 
 
2.
to any holder that is not the sole beneficial owner of such notes, or a portion of such notes, or that is a fiduciary, partnership or limited liability company, but only to the extent that a beneficial owner with respect to the holder, a beneficiary or settlor with respect to the fiduciary, or a beneficial owner or member of the partnership or limited liability company would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment;
 
 
3.
to any tax, assessment or other governmental charge that would not have been imposed but for the failure of the holder, beneficial owner or any other person to (a) submit an applicable United States Internal Revenue Service (“IRS”) Form W-8 (with any required attachments) to establish the status as a non-United States person as required for purposes of the portfolio interest exemption or IRS Form W-9 to establish the status as a United States person, or comply with other certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with a Relevant Taxing Jurisdiction of the holder or beneficial owner of such notes, if compliance is required by statute, by regulation of the Relevant Taxing Jurisdiction or by an applicable income tax treaty to which the Relevant Taxing Jurisdiction is a party as a precondition to exemption from such tax, assessment or other governmental charge or (b) comply with any information gathering and reporting requirements or take any similar action (including entering into any agreement with the IRS), in each case, that is required to obtain the maximum available exemption from withholding by a Relevant Taxing Jurisdiction that is available to payments received by or on behalf of the holder or beneficial owner;

 
4.
to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a paying agent from the payment;
 
 
5.
to any tax, assessment or other governmental charge that would not have been imposed or withheld but for a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later;
 
 
6.
to any estate, inheritance, gift, sales, excise, transfer, wealth, capital gains or personal property tax or similar tax, assessment or other governmental charge;
 
 
7.
to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any note, if such payment can be made without such withholding by at least one other paying agent;
 


 
8.
to any tax, assessment or other governmental charge that would not have been imposed or levied but for the presentation by the holder of any note, where presentation is required, for payment on a date more than 30 days after the date on which payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;
 
 
9.
to any tax, assessment or other governmental charge imposed under sections 1471 through 1474 of the Code as of the issue date (or any amended or successor provisions), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to section 1471(b) of the Code or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code; or
 
 
10.
in the case of any combination of items (1) through (9) above.

The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading “— Payment of Additional Amounts,” we will not be required to make any payment for any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision.

As used under this heading “— Payment of Additional Amounts” and under the heading “— Redemption for Tax Reasons,” the term “United States” means the United States of America, the states of the United States, and the District of Columbia, and the term “United States person” means any individual who is a citizen or resident of the United States for U.S. federal income tax purposes, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia, or any estate the income of which is subject to United States federal income taxation regardless of its source, or a trust that (1) is subject to the primary supervision of a United States court and the control of one or more “United States persons” (within the meaning of section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Redemption for Tax Reasons

If, (a) as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of any Relevant Taxing Jurisdiction, or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings (including by virtue of a holding, judgment or order by a court of competent jurisdiction or a change in published administrative practice), which change or amendment is announced or becomes effective on or after the date of this prospectus supplement, we become or, based on a written opinion of independent counsel selected by us, are likely to become obligated to pay additional amounts as described herein under the heading “— Payment of Additional Amounts” with respect to the notes of either series, or (b) any act is taken by a Relevant Taxing Jurisdiction on or after the date of this prospectus supplement whether or not such act is taken with respect to us or any affiliate, that results in us being required or, based upon a written opinion of independent counsel selected by us, being likely to be required to pay such additional amounts, then we may at any time at our option redeem, in whole, but not in part, the notes of such series on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 100% of their principal amount, together with accrued and unpaid interest on the notes being redeemed to, but excluding, the redemption date.

Covenants

The following covenants apply to the notes. Each of the covenants is subject to the provision for exempted indebtedness described below.

For your reference, we have provided below definitions of the capitalized terms used in the description of the covenants.


Limitation on Liens

We will not, nor will we permit any Restricted Subsidiary to, issue, assume or guarantee any debt for money borrowed if such debt is secured by a mortgage, security interest, lien, pledge or other encumbrance (referred to in this prospectus supplement as a “lien”) on any Principal Property, or on any shares of stock or indebtedness of any Restricted Subsidiary, without in any such case effectively providing that the notes (and if we so choose, any other debt or obligation that ranks equally with the notes) are secured equally and ratably with, or prior to, such debt. These restrictions do not apply to debt secured by:
 
 
•
 
liens on property of a corporation existing at the time it becomes a subsidiary or at the time it is merged into or consolidated with or purchased by us or a subsidiary;
 
 
•
 
liens on property existing at the time of its acquisition and certain purchase money liens;
 
 
•
 
liens securing the cost of construction of new plants, incurred within 180 days of completion of construction;
 
 
•
 
liens securing the debt of a Restricted Subsidiary owing to us or another Restricted Subsidiary;
 
 
•
 
liens in connection with the issuance of certain industrial revenue bonds or similar financings;
 
 
•
 
liens existing on the date of the indenture;
 
 
•
 
certain other liens specified in the indenture that are customarily exempted from restrictions in offerings of securities similar to the notes; and
 
 
•
 
any extensions, renewals or replacements, in whole or in part, of any lien referred to above, as long as the principal amount of debt secured by any such lien does not increase and the lien is limited to all or part of the same property that previously secured the lien.

Limitation on Sale and Lease-Back

We will not, nor will we permit any Restricted Subsidiary to, engage in a sale and lease-back transaction of any Principal Property (except for certain temporary leases and leases with a Restricted Subsidiary) unless:
 
 
•
 
we or the Restricted Subsidiary could (subject to the limitation on liens) incur debt secured by a lien on the Principal Property to be leased without equally and ratably securing the notes; or
 
 
•
 
within 180 days following such a transaction, we retire long-term debt equal to the value of the transaction.

Exempted Indebtedness

We and our Restricted Subsidiaries may incur debt and enter into sale and lease-back transactions without regard to the two covenants described above if the sum of such debt and the value of such sale and lease-back transactions on a cumulative basis does not exceed 10% of the Consolidated Net Tangible Assets (which is total assets less current liabilities, goodwill and other intangibles) as shown on our audited consolidated balance sheet in our latest annual report to our stockholders.



Definitions

“Principal Property” means any manufacturing plant or other facility within the United States that we or a subsidiary own or lease, unless our Board of Directors determines that the plant or facility, together with any others so determined, is not of material importance to the total business of us and our Restricted Subsidiaries.

“Restricted Subsidiary” means any subsidiary (other than a subsidiary principally engaged in leasing or financing installment receivables or financing operations outside the United States) that owns or leases a Principal Property if:
 
 
•
 
substantially all of its property is located in the United States;
 
 
•
 
substantially all of its business is carried on in the United States; or
 
 
•
 
it is incorporated in any State of the United States.

Consolidation or Merger

Under the terms of the indenture, we may consolidate or merge with another corporation or sell, convey or lease all or substantially all of our assets to another corporation or entity. The successor or acquiring corporation or entity must expressly assume all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the notes and performance of the covenants (it being understood that any obligation to pay additional amounts shall be determined mutatis mutandis, by treating the jurisdiction under the laws of which such successor or acquiring corporation or entity is organized and any political subdivision or taxing authority as therein having the power to tax, as a Relevant Taxing Jurisdiction). If, upon any such consolidation, merger, sale, conveyance or lease, or upon any such consolidation, merger, sale, conveyance or lease with respect to a Restricted Subsidiary, any Principal Property or shares of stock or indebtedness of a Restricted Subsidiary would become subject to a lien that is not in favor of us, a Restricted Subsidiary or any such successor or acquiring corporation or entity, we must, before or at the time of such transaction, effectively provide that the notes will be secured (if we so choose, equally and ratably with any other obligation of us or a Restricted Subsidiary that ranks equally with the notes) by a direct lien on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary that is prior to all liens other than pre-existing liens on such Principal Property or shares of stock or indebtedness of a Restricted Subsidiary, and that will continue as long as such Principal Property, shares of stock or indebtedness is subject to the lien arising in such transaction.

Events of Default

An event of default for any series of the notes includes the following:
 
 
•
 
failure to pay any installment of interest, including any additional amounts on the notes of that series that continues for 30 days after such payment is due;
 
 
•
 
failure to pay principal of or premium, if any, on the notes of that series when due;
 
 
•
 
failure to perform any of the other covenants or agreements in the notes or in the indenture and relating to the notes of that series that continues for 60 days after notice to us by the trustee or holders of at least 25% in aggregate principal amount of the outstanding notes of that series; or
 
 
•
 
certain events of bankruptcy, insolvency or reorganization of us.


An event of default with respect to a particular series of notes issued under the indenture does not necessarily constitute an event of default with respect to any other series. The indenture provides that the trustee will, with certain exceptions, notify the holders of the affected series of notes of the occurrence of any of the events of default listed above (not including any applicable grace period and irrespective of the giving of notice as described in the third bullet) known to the trustee within 90 days after the occurrence thereof. Except in the case of a default in the payment of principal of, or premium, if any, or interest on a series of the notes, the trustee may withhold notice if it determines in good faith that withholding notice is in the interest of the holders.

If an event of default is continuing for any series of the notes, the trustee or the holders of not less than 25% in aggregate principal amount of the affected series of notes then outstanding may declare the principal amount of that series of the notes to be due and payable immediately. In such a case, subject to certain conditions, the holders of a majority in aggregate principal amount of that series of the notes then outstanding can annul the declaration and waive past defaults.

We are required to provide an annual officers’ certificate to the trustee concerning our compliance with certain covenants we make in the indenture. Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is not obligated to exercise any of its rights or powers at the request or direction of any of the holders of notes unless the holders have offered the trustee security or indemnity reasonably satisfactory to the trustee. The holders of a majority in principal amount of the outstanding notes of each series affected by an event of default may direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture or exercising any of the trustee’s trusts or powers with respect to that series of the notes; however, the trustee may decline to follow such direction in certain circumstances.

If the euro is unavailable to us due to the imposition of exchange controls or other circumstances beyond our control or if the euro is no longer being used by the then-member states of the European Monetary Union that have adopted the euro as their currency or for the settlement of transactions by public institutions of or within the international banking community, then all payments in respect of the notes will be made in U.S. dollars until the euro is again available to us or so used. The amount payable on any date in euros will be converted into U.S. dollars on the basis of the most recently available market exchange rate for euros. Any payment in respect of the notes so made in U.S. dollars will not constitute an event of default. Neither the trustee nor the paying agent shall have any responsibility for effecting such currency conversions.

Modification and Amendment of the Indenture

We may enter into supplemental indentures with the trustee without the consent of the holders of the notes to, among other things:
 
 
•
 
evidence the assumption by a successor corporation of our obligations under the indenture;
 
 
•
 
appoint additional or separate trustees to act under the indenture;

 
•
 
add covenants for the protection of the holders of the notes; and
 
 
•
 
cure any ambiguity or correct any inconsistency in the indenture.

With the consent of the holders of a majority in aggregate principal amount of the notes of each affected series issued under the indenture at the time outstanding, we may execute supplemental indentures with the trustee to add provisions or change or eliminate any provision of the indenture or any supplemental indenture relating to such series or to modify the rights of the holders of those notes. However, no such supplemental indenture will (1) extend the fixed maturity of any notes, reduce the principal amount (including in the case of discounted notes the amount payable upon acceleration of the maturity thereof), reduce the rate or extend the time of payment of any


interest, reduce any premium payable upon redemption, or change the currency in which any notes are payable, without the consent of each holder of affected notes, or (2) reduce the aforesaid majority in principal amount of the notes of any series, the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of all notes of such series.

Defeasance and Discharge of Indenture or Certain Obligations; Satisfaction and Discharge

At our option, we (1) will be discharged from all obligations under the indenture in respect of the notes of a series (except for certain obligations to register the transfer of or to exchange such notes, replace stolen, lost or mutilated notes, maintain paying agencies and hold monies for payment in trust) or (2) need not comply with certain covenants of the indenture that are applicable to each series of notes (including the limitation on liens and the limitation on sale and lease-back) and will not be limited by the restrictions in the indenture with respect to merger, consolidation or sale, conveyance or lease of substantially all of our assets, in each case if we irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due and satisfy other conditions in the indenture. In order to select either option, we must provide the trustee, among other things, an opinion of counsel based on a ruling from or published by the Internal Revenue Service (in the case of option (1)), or an opinion of counsel (in the case of option (2)), in each case to the effect that beneficial owners of the applicable notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of our exercise of the option, and will be subject to U.S. federal income tax on the same amounts and in the same manner and at the same times as if we had not exercised such option.

In the event we exercise our option under (2) above with respect to any series of notes and the notes of such series are declared due and payable because of the occurrence of any event of default other than default with respect to such obligations, the amount of money and Federal Republic of Germany obligations on deposit with the trustee will be sufficient to pay amounts due on the notes of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the notes of that series at the time of the acceleration resulting from such event of default. We would remain liable, however, for such payments.

In addition to the foregoing, at our option, we will be discharged from all our obligations under the indenture (except for certain obligations to register the transfer of or to exchange such notes and provide compensation and reimbursement of expenses to the trustee) in respect of the notes of a series of which all of the notes have been delivered to the trustee for cancellation (other than destroyed, lost or stolen notes that have been replaced or paid) or that have matured or will mature or be redeemed within one year (where arrangements satisfactory to the trustee for giving notice of redemption have been made), if we, among other things, irrevocably deposit with the trustee, in trust, money or Federal Republic of Germany obligations (or a combination thereof) sufficient to pay the principal of and any premium or interest on the applicable notes when due.

“Federal Republic of Germany obligations” means direct noncallable obligations of the Federal Republic of Germany, noncallable obligations the payment of the principal of and interest on which is fully guaranteed by the Federal Republic of Germany, and noncallable obligations on which the full faith and credit of the Federal Republic of Germany is pledged to the payment of the principal thereof and interest thereon.

Governing Law

The indenture and the notes will be governed by, and construed and enforced in accordance with, the laws of the State of Illinois applicable to agreements made or instruments entered into and, in each case, performed in said state.

Relationship with Trustee and Paying Agent

The Bank of New York Mellon Trust Company, N.A. currently serves as the trustee with respect to certain of our other outstanding debt securities, and The Bank of New York Mellon, London Branch currently serves as the paying agent with respect to certain of our other outstanding debt securities.


Open Market Purchases

We may at any time and from time to time purchase notes in the open market or otherwise.

Exhibit
Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


00792620
 
 
United Kingdom
A V Co 1 Limited
 
 
United Kingdom
A V Co 1 Limited
 
 
Delaware
A V Co 2 Limited
 
 
United Kingdom
A V Co 2 Limited
 
 
Nevada
A V Co 3 Limited
 
 
United Kingdom
A V Co 3 Limited
 
 
Nevada
Accessories Marketing Holding Corp.
 
 
Delaware
ACCU-LUBE Manufacturing GmbH - Schmiermittel und -geräte -
 
 
Germany
Advanced Molding Company, Inc.
 
 
Philippines
AIP/BI Holdings, Inc.
 
 
Delaware
Allen Coding GmbH
 
 
Germany
Allen France SAS
 
 
France
Alpine Automation Limited
 
 
United Kingdom
Alpine Holdings, Inc.
 
 
Delaware
Alpine Systems Corporation
 
 
Canada
Anaerobicos S.r.l.
 
 
Argentina
AppliChem GmbH
 
 
Germany
AppliChem, Inc.
 
 
Connecticut
Arylux Hungary Elektromechanikus Alkatreszgyarto Kft
 
 
Hungary
Avery Berkel France
 
 
France
Avery India Limited
 
 
India
Avery Malaysia Sdn Bhd
 
 
Malaysia
Avery Weigh-Tronix (Suzhou) Weighing Technology Co. Ltd.
 
 
China
Avery Weigh-Tronix Finance Limited
 
 
United Kingdom
Avery Weigh-Tronix Holdings Limited
 
 
Nevada
Avery Weigh-Tronix Holdings Limited
 
 
United Kingdom
Avery Weigh-Tronix International Limited
 
 
United Kingdom
Avery Weigh-Tronix Limited
 
 
United Kingdom
Avery Weigh-Tronix Properties Limited
 
 
United Kingdom
Avery Weigh-Tronix, LLC
 
 
Delaware
B.C. Immo
 
 
France
Beijing Miller Electric Manufacturing Co. Ltd.
 
 
China
Berkel (Ireland) Limited
 
 
Ireland
Berrington UK
 
 
United Kingdom
Brapenta Eletronica Ltda.
 
 
Brazil
Brooks Instrument (Shanghai) Co. Ltd
 
 
China
Brooks Instrument B.V.
 
 
Netherlands
Brooks Instrument GmbH
 
 
Germany
Brooks Instrument KFT
 
 
Hungary
Brooks Instrument Korea, Ltd.
 
 
South Korea
Brooks Instrument LLC
 
 
Delaware
Buell Industries, Inc.
 
 
Delaware
Calvia Spolka z Ograniczona Odpowiedzialnosci
 
 
Poland
Capital Ventures (Australasia) S.à r.l
 
 
Luxembourg
CAPMAX Logística S.A. de C.V.
 
 
Mexico
Capmax Logistica, S.A. de C.V.
 
 
Delaware
CCI Realty Company
 
 
Delaware
Celeste Industries Corporation
 
 
Connecticut
Cetram Pty Limited
 
 
Australia
CFC Europe GmbH
 
 
Germany
Coeur (Shanghai) Medical Appliance Trading Co., Ltd
 
 
China
Coeur Asia Limited
 
 
Hong Kong
Coeur Holding Company
 
 
Delaware
Coeur, Inc.
 
 
Indiana

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


Compagnie de Materiel et d'Equipements Techniques-Comet
 
 
France
Compagnie Hobart
 
 
France
Constructions Isothermiques Bontami C.I.B.
 
 
France
CS (Australia) Pty Limited
 
 
Australia
CS (Finance) Europe S.a.r.l.
 
 
Luxembourg
CS Mexico Holding Company S DE RL DE CV
 
 
Mexico
CSMTS LLC
 
 
Delaware
Densit Asia Pacific Sdn Bhd
 
 
Malaysia
Diagraph Corporation Sdn. Bhd
 
 
Malaysia
Diagraph ITW Mexico, S. de R.L. De C.V.
 
 
Mexico
Diagraph México, S.A. DE C.V.
 
 
Mexico
Dongguan Ark-Les Electric Components Co., Ltd.
 
 
China
Dongguan CK Branding Co., Ltd.
 
 
China
Dorbyl U.K. (Holdings) Limited
 
 
United Kingdom
Duo Fast de Espana S.A.U.
 
 
Spain
Duo-Fast Korea Co. Ltd.
 
 
South Korea
Duo-Fast LLC
 
 
Illinois
E.C.S. d.o.o.
 
 
Croatia
ECS Cable Protection Sp. Zoo
 
 
Poland
Elga Skandinavian AS
 
 
Norway
ELRO (Holding) AG
 
 
Switzerland
ELRO Grosskuchen GmbH
 
 
Austria
ELRO Grosskuchen GmbH
 
 
Germany
ELRO-WERKE AG
 
 
Switzerland
Eltex-Elektrostatik-Gesellschaft mit beschränkter Haftung
 
 
Germany
Envases Multipac, S.A. de C.V.
 
 
Mexico
Eurotec Srl
 
 
Italy
Fasver
 
 
France
FEG Investments L.L.C.
 
 
Delaware
Filtertek
 
 
France
Filtertek De Mexico Holding Inc.
 
 
Delaware
Filtertek De Mexico, S.A. de C.V.
 
 
Mexico
Gamko B.V.
 
 
Netherlands
GC Financement SA
 
 
France
Gun Hwa Platech (Taicang) Co. Ltd.
 
 
China
Hobart (Japan) K.K.
 
 
Japan
Hobart Andina S.A.S.
 
 
Colombia
Hobart Foster Belgium
 
 
Belgium
Hobart Brothers International Chile Limitada
 
 
Chile
Hobart Brothers LLC
 
 
Ohio
Hobart Dayton Mexicana, S. de R.L. de C.V.
 
 
Mexico
Hobart Food Equipment Co., Ltd.
 
 
China
HOBART Gesellschaft mit beschränkter Haftung
 
 
Germany
Hobart International (Singapore) Pte. Ltd.
 
 
Singapore
Hobart Korea LLC
 
 
South Korea
Hobart LLC
 
 
Delaware
Hobart Nederland B.V.
 
 
Netherlands
Hobart Sales & Service, Inc.
 
 
Ohio
Hobart Scandinavia ApS
 
 
Denmark
Hobart Techniek B.V.
 
 
Netherlands
Horis
 
 
France
Ideal Molding Technologies LLC
 
 
Delaware
ILC Investments Holdings Inc.
 
 
Delaware
Illinois Tool Works (Chile) Limitada
 
 
Chile
Illinois Tool Works (ITW) Nederland B.V.
 
 
Netherlands

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


Illinois Tool Works Norway AS
 
 
Norway
Impar Comercio E Representacoes Ltda.
 
 
Brazil
Industrie Plastic Elsässer GmbH
 
 
Germany
Inmobiliaria Cit., S.A. de C.F.
 
 
Mexico
Innova Temperlite Servicios, S.A. de C.V.
 
 
Mexico
Innovación y Transformación Automotriz, S.A. de C.V.
 
 
Mexico
Instron (Shanghai) Ltd.
 
 
China
Instron (Thailand) Limited
 
 
Thailand
Instron Brasil Equipamentos Cientificos Ltda.
 
 
Brazil
Instron Foreign Sales Corp. Limited
 
 
Jamaica
Instron France S.A.S.
 
 
France
Instron GmbH
 
 
Germany
Instron Holdings Limited
 
 
United Kingdom
Instron International Limited
 
 
United Kingdom
Instron Japan Company, Ltd.
 
 
Massachusetts
Instron Korea LLC
 
 
South Korea
International Leasing Company LLC
 
 
Delaware
International Truss Systems Proprietary Limited
 
 
South Africa
Isolenge - ITW Sistemas de Isolamento Termico Ltda.
 
 
Brazil
ITW (China) Investment Company Limited
 
 
China
ITW (Deutschland) GmbH
 
 
Germany
ITW (EU) Holdings Ltd.
 
 
Luxembourg
ITW (European) Finance Co. Ltd.
 
 
Malta
ITW (European) Finance II Co. Ltd.
 
 
Malta
ITW (Ningbo) Components & Fastenings Systems Co., Ltd.
 
 
China
ITW AEP LLC
 
 
Delaware
ITW Aircraft Investments Inc.
 
 
Delaware
ITW Airport Ground Equipment (Beijing) Co. Ltd.
 
 
China
ITW Alpha Sárl
 
 
Luxembourg
ITW Ampang Industries Philippines, Inc.
 
 
Philippines
ITW AOC, LLC
 
 
South Korea
ITW Appliance Components d.o.o.
 
 
Slovenia
ITW Appliance Components EOOD
 
 
Bulgaria
ITW Appliance Components LLC
 
 
Massachusetts
ITW Appliance Components S.r.l.a
 
 
Italy
ITW Appliance Components, S.A. de C.V.
 
 
Mexico
ITW Australia Holdings Pty Ltd
 
 
Australia
ITW Australia Property Holdings Pty Ltd.
 
 
Australia
ITW Australia Pty Ltd
 
 
Australia
ITW Automotive Components (Chongqing) Co. Ltd.
 
 
China
ITW Automotive Components (Langfang) Co., Ltd.
 
 
China
ITW Automotive Japan K.K.
 
 
Japan
ITW Automotive Korea, LLC
 
 
South Korea
ITW Automotive Parts (Shanghai) Co. Ltd
 
 
China
ITW Automotive Products GmbH
 
 
Germany
ITW Automotive Products México, S. de R.L. de C.V.
 
 
Mexico
ITW Bailly Comte
 
 
France
ITW Befestigungssysteme GmbH
 
 
Germany
ITW Belgium
 
 
Belgium
ITW Brazilian Nominee L.L.C.
 
 
Delaware
ITW Building Components Group Inc.
 
 
Delaware
ITW Canada Inc.
 
 
Canada
ITW Celeste Inc.
 
 
Delaware
ITW CER
 
 
France
ITW Chemical Products Ltda
 
 
Brazil

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


ITW Chemical Products Scandinavia ApS
 
 
Denmark
ITW Colombia S.A.S.
 
 
Colombia
ITW Construction Products (Shanghai) Co. Ltd.
 
 
China
ITW Construction Products (Singapore) Pte. Ltd.
 
 
Singapore
ITW Construction Products AB
 
 
Sweden
ITW Construction Products ApS
 
 
Denmark
ITW Construction Products AS
 
 
Norway
ITW Construction Products CZ s.r.o.
 
 
Czech Republic
ITW Construction Products Italy Srl
 
 
Italy
ITW Construction Products OU
 
 
Estonia
ITW Construction Products OY
 
 
Finland
ITW Contamination Control (Wujiang) Co., Ltd.
 
 
China
ITW Contamination Control B.V.
 
 
Netherlands
ITW Covid Security Group Inc.
 
 
Delaware
ITW CP Distribution Center Holland BV
 
 
Netherlands
ITW CS (UK) Ltd.
 
 
United Kingdom
ITW de France
 
 
France
ITW DelFast do Brasil Ltda.
 
 
Brazil
ITW Delta Sárl
 
 
Luxembourg
ITW Denmark ApS
 
 
Denmark
ITW do Brasil Industrial e Comercial Ltda.
 
 
Brazil
ITW DS Investments Inc.
 
 
Delaware
ITW Dynatec
 
 
France
ITW Dynatec Adhesive Equipment (Suzhou) Co. Ltd.
 
 
China
ITW Dynatec GmbH
 
 
Germany
ITW Dynatec Kabushiki Kaisha
 
 
Japan
ITW EF&C France SAS
 
 
France
ITW EF&C Selb GmbH
 
 
Germany
ITW Electronic Business Asia Co., Limited
 
 
Taiwan
ITW Electronic Components/Products (Shanghai) Co., Ltd.
 
 
China
ITW Electronics (Suzhou) Co., Ltd.
 
 
China
ITW Epsilon Sárl
 
 
Luxembourg
ITW Espana S.A.
 
 
Spain
ITW Fastener Products GmbH
 
 
Germany
ITW FEG do Brasil Industria e Comercio Ltda.
 
 
Brazil
ITW FEG Hong Kong Limited
 
 
Hong Kong
ITW Finance Designated Activity Company
 
 
Ireland
ITW Finance Europe S.A.
 
 
Luxembourg
ITW Finance Europe S.A.
 
 
Delaware
ITW Fluids and Hygiene Solutions Ltda.
 
 
Brazil
ITW Food Equipment Group LLC
 
 
Delaware
ITW Gamma Sárl
 
 
Luxembourg
ITW German Management LLC
 
 
Delaware
ITW GH LLC
 
 
South Korea
ITW Global Investments Holdings LLC
 
 
Delaware
ITW Global Investments Holdings Y Compañia, Sociedad en Comandita por Acciones
 
 
Guatemala
ITW Global Investments II Inc.
 
 
Delaware
ITW Global Investments LLC
 
 
Delaware
ITW Global Tire Repair Europe GmbH
 
 
Germany
ITW Global Tire Repair Inc.
 
 
California
ITW Global Tire Repair Japan K.K.
 
 
Japan
ITW Graphics (Thailand) Ltd.
 
 
Thailand
ITW Graphics Asia Limited
 
 
Hong Kong
ITW Graphics Italy S.R.L. in liquidazione
 
 
Italy

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


ITW Great Britain Investment & Licensing Holding Company
 
 
Delaware
ITW Group France (Luxembourg) S.àr.l.
 
 
Luxembourg
ITW GSE ApS
 
 
Denmark
ITW GSE Inc.
 
 
Delaware
ITW haubold Paslode GmbH
 
 
Switzerland
ITW HLP Thailand Co. Ltd.
 
 
Thailand
ITW Holding Quimica B.C., S.L., Sole Shareholder Company
 
 
Spain
ITW Holdings Australia L.P.
 
 
Australia
ITW Holdings I Limited
 
 
United Kingdom
ITW Holdings II Limited
 
 
United Kingdom
ITW Holdings III Limited
 
 
United Kingdom
ITW Holdings Inc.
 
 
Delaware
ITW Holdings IV Limited
 
 
United Kingdom
ITW Holdings IX Limited
 
 
United Kingdom
ITW Holdings LP
 
 
United Kingdom
ITW Holdings UK
 
 
United Kingdom
ITW Holdings V Limited
 
 
United Kingdom
ITW Holdings VI Limited
 
 
United Kingdom
ITW Holdings VII Limited
 
 
United Kingdom
ITW Holdings VIII Limited
 
 
United Kingdom
ITW Hungary Finance Beta Kft
 
 
Hungary
ITW ILC Holdings I Inc.
 
 
Delaware
ITW Imaden Industria e Comercio Ltda.
 
 
Brazil
ITW India Private Limited
 
 
India
ITW International Holdings LLC
 
 
Delaware
ITW International Intellectual Property LLC
 
 
Delaware
ITW Invest Holding GmbH
 
 
Germany
ITW IPG Investments LLC
 
 
Delaware
ITW Ireland Holdings Unlimited Company
 
 
Ireland
ITW Ireland Unlimited Company
 
 
Ireland
ITW Italy Finance Srl
 
 
Italy
ITW Italy Holding Srl
 
 
Italy
ITW Japan Ltd.
 
 
Japan
ITW Korea LLC
 
 
South Korea
ITW Limited
 
 
United Kingdom
ITW LLC & Co. KG
 
 
Germany
ITW Lombard Holdings Inc.
 
 
Delaware
ITW Lys Fusion S.r.l.
 
 
Italy
ITW M FILMS II LLC
 
 
Delaware
ITW Marking & Coding (Shanghai) Co., Ltd.
 
 
China
ITW Medical Group de Mexico S. de R.L. de C.V.
 
 
Mexico
ITW Meritex Sdn. Bhd.
 
 
Malaysia
ITW Metal Fasteners, S.L.
 
 
Spain
ITW Mexico Holding Company S. De R.L. de C.V.
 
 
Mexico
ITW Mexico Holdings LLC
 
 
Delaware
ITW MH LLC
 
 
Delaware
ITW Morlock GmbH
 
 
Germany
ITW Mortgage Investments II, Inc.
 
 
Delaware
ITW Mortgage Investments III, Inc.
 
 
Delaware
ITW Mortgage Investments IV, Inc.
 
 
Delaware
ITW Netherlands Beta B.V.
 
 
Netherlands
ITW Netherlands Finance Alpha BV
 
 
Netherlands
ITW New Universal LLC
 
 
Delaware
ITW New Zealand
 
 
New Zealand
ITW Novadan Sp. Z.o.o.
 
 
Poland

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


ITW Packaging Technology (China) Co. Ltd.
 
 
China
ITW Participations S.à r.l.
 
 
Luxembourg
ITW Pension Funds Trustee Company
 
 
United Kingdom
ITW Performance Plastic (Shanghai) Co. Ltd.
 
 
China
ITW Performance Polymers & Fluids Japan Co. Ltd.
 
 
Japan
ITW Performance Polymers & Fluids Korea Limited
 
 
South Korea
ITW Performance Polymers & Fluids OOO
 
 
Russia
ITW Performance Polymers (Wujiang) Co., Ltd.
 
 
China
ITW Performance Polymers and Fluids Group FZE
 
 
United Arab Emirates
ITW Performance Polymers ApS
 
 
Denmark
ITW Peru S.A.C.
 
 
Peru
ITW Philippines Holdings LLC
 
 
Delaware
ITW Poly Mex, S. de R.L. de C.V.
 
 
Mexico
ITW Polymers Sealants North America Inc.
 
 
Texas
ITW PPF Brasil Adesivos Ltda.
 
 
Brazil
ITW Pronovia s.r.o.
 
 
Czech Republic
ITW Pte. Ltd.
 
 
Singapore
ITW Qufu Automotive Cooling Systems Co. Ltd.
 
 
China
ITW Real Estate Germany GmbH
 
 
Germany
ITW Residuals III L.L.C.
 
 
Delaware
ITW Residuals IV L.L.C.
 
 
Delaware
ITW Rivex
 
 
France
ITW Simco-Ion (Shenzhen) Co. Ltd.
 
 
China
ITW Slovakia s.r.o.
 
 
Slovakia
ITW SMPI
 
 
France
ITW Spain Holdings, S.L.
 
 
Spain
ITW Specialty Film, LLC
 
 
South Korea
ITW Specialty Films France
 
 
France
ITW Specialty Materials (Suzhou) Co., Ltd.
 
 
China
ITW SPG México, S. de R.L. de C.V.
 
 
Mexico
ITW Spraytec
 
 
France
ITW Sverige AB
 
 
Sweden
ITW Sweden Holding AB
 
 
Sweden
ITW Test & Measurement Equipment (Shanghai) Co., Ltd
 
 
China
ITW Test & Measurement GmbH
 
 
Germany
ITW Test and Measurement Italia Srl
 
 
Italy
ITW Test and Measurement Services Industry and Trade Ltd.
 
 
Turkey
ITW Texwipe Philippines, Inc.
 
 
Philippines
ITW Thermal Films (Shanghai) Co., Ltd.
 
 
China
ITW UK
 
 
United Kingdom
ITW UK Finance Beta Limited
 
 
United Kingdom
ITW UK Finance Delta Limited
 
 
United Kingdom
ITW UK Finance Gamma Limited
 
 
United Kingdom
ITW UK Finance Limited
 
 
United Kingdom
ITW UK II Limited
 
 
United Kingdom
ITW Universal II LLC
 
 
Delaware
ITW Welding
 
 
France
ITW Welding AB
 
 
Sweden
ITW Welding GmbH
 
 
Germany
ITW Welding Products B.V.
 
 
Netherlands
ITW Welding Products Group FZE
 
 
United Arab Emirates
ITW Welding Products Group, S. DE R.L. De C.V.
 
 
Mexico
ITW Welding Products Italy Srl
 
 
Italy
ITW Welding Products Limited Liability Company
 
 
Russia
ITW Welding Produtos Para Solgdagem Ltda.
 
 
Brazil

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


ITW Welding Servicios Mexico, S. de R.L. de C.V.
 
 
Mexico
ITW Welding Singapore Pte. Ltd.
 
 
Singapore
KCPL Mauritius Holdings
 
 
Mauritius
Kester Components (M) Sdn. Bhd.
 
 
Malaysia
Kleinmann GmbH
 
 
Germany
Krafft Argentina, S.A.
 
 
Argentina
Krafft, S.L.
 
 
Spain
Lock Inspection Systemes France Sarl
 
 
France
Loma Systems (Canada) Inc.
 
 
Canada
Loma Systems BV
 
 
Netherlands
Loma Systems sro
 
 
Czech Republic
Lombard Pressings Limited
 
 
United Kingdom
Lumex, Inc.
 
 
Illinois
Luvex - Industria De Equipamentos De Protecao Ltda.
 
 
Brazil
Lys Fusion Poland Sp. z.o.o.
 
 
Poland
M&C Specialties (Shenzhen) Co. Ltd.
 
 
China
M&C Specialties Co.
 
 
Pennsylvania
Magna Industrial Co. Limited
 
 
Hong Kong
MAGNAFLUX GmbH
 
 
Germany
Manufacturing Avancee S.A.
 
 
Morocco
MEHB Holdings Limited
 
 
United Kingdom
Meritex Technology (Suzhou) Co. Ltd.
 
 
China
Meurer Verpackungssysteme GmbH
 
 
Germany
MGHG Property LLC
 
 
Delaware
Miller Electric Mfg. LLC
 
 
Wisconsin
Miller Insurance Ltd.
 
 
Vermont
NDT Holding LLC
 
 
Delaware
Norden Olje AB
 
 
Sweden
North Star Imaging Europe
 
 
France
North Star Imaging, Inc.
 
 
Minnesota
Nova Chimica, S.r.l.
 
 
Italy
Novadan ApS
 
 
Denmark
Odesign, Inc.
 
 
Illinois
Orbitalum Tools GmbH
 
 
Germany
Pacific Concept Industries Limited (Enping)
 
 
China
Panreac Quimica, S.L.
 
 
Spain
Paslode Fasteners (Shanghai) Co., Ltd.
 
 
China
Penta Dnepr LLC
 
 
Ukraine
Penta Sever OOO
 
 
Russia
Penta Volga OOO
 
 
Russia
PENTA-91 OOO
 
 
Russia
PR. A. I. Srl
 
 
Italy
Premark FEG L.L.C.
 
 
Delaware
Premark HII Holdings LLC
 
 
Ohio
Premark International, LLC
 
 
Delaware
Prolex, Sociedad Anónima
 
 
Costa Rica
PT ITW Construction Products Indonesia
 
 
Indonesia
QSA Global, Inc.
 
 
Delaware
Quimica Industrial Mediterranea, S.L.
 
 
Spain
Ramset Fasteners (Hong Kong) Ltd.
 
 
Hong Kong
Rapid Cook LLC
 
 
Delaware
Refrigeration France
 
 
France
S.E.E. Sistemas Industria E Comercio Ltda.
 
 
Brazil
Salter India Limited
 
 
India
Sealant Systems International, Inc.
 
 
California

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


Sentinel Asia Yuhan Hoesa
 
 
South Korea
Shanghai ITW Plastic & Metal Co. Ltd
 
 
China
Simco (Nederland) B.V.
 
 
Netherlands
Simco Japan, Inc.
 
 
Japan
Société de Prospection et d’Inventions Techniques – SPIT
 
 
France
Speedline Holdings I, Inc.
 
 
Delaware
Speedline Holdings I, LLC
 
 
Delaware
Speedline Technologies GmbH
 
 
Germany
Speedline Technologies Mexico Services, S. de R.L. de C.V.
 
 
Mexico
Speedline Technologies Mexico, S. de R.L. de C.V.
 
 
Mexico
ST Mexico Holdings LLC
 
 
Delaware
Stokvis Celix Portugal Unipessoal LDA
 
 
Portugal
Stokvis Danmark ApS
 
 
Denmark
Stokvis Holdings S.A.R.L.
 
 
Luxembourg
Stolvis Holdings II S.A.R.L.
 
 
Luxembourg
Stokvis Promi s.r.o
 
 
Czech Republic
Stokvis Prostick Tapes Private Limited
 
 
India
Stokvis Tape Group B.V.
 
 
Netherlands
Stokvis Tapes (Hong Kong) Co. Limited
 
 
Hong Kong
Stokvis Tapes (Shanghai) Co. Ltd.
 
 
China
Stokvis Tapes (Shenzhen) Co. Ltd.
 
 
China
Stokvis Tapes (Taiwan) Co. Ltd.
 
 
Taiwan
Stokvis Tapes (Tianjin) Co. Ltd.
 
 
China
Stokvis Tapes Benelux B.V.
 
 
Netherlands
Stokvis Tapes BVBA
 
 
Belgium
Stokvis Tapes Deutschland GmbH
 
 
Germany
Stokvis Tapes France
 
 
France
Stokvis Tapes Italia s.r.l.
 
 
Italy
Stokvis Tapes Limited
 
 
United Kingdom
Stokvis Tapes Limited Liability Company
 
 
Russia
Stokvis Tapes Norge AS
 
 
Norway
Stokvis Tapes Oy
 
 
Finland
Stokvis Tapes Polska Sp Z.O.O.
 
 
Poland
Stokvis Tapes Sverige AB
 
 
Sweden
Tarutin Kester Co., Ltd.
 
 
Japan
Technopack Industria, Comercio, Consultoria e Representacoes Ltda.
 
 
Brazil
Teknek (China) Limited
 
 
Scotland
Teknek (Japan) Limited
 
 
Scotland
Teksaleco Ltd.
 
 
Scotland
Thirode Grandes Cuisines Poligny
 
 
France
Tien Tai Electrode (Kunshan) Co., Ltd.
 
 
China
Tien Tai Electrode (Qingdao) Co., Ltd.
 
 
China
Tien Tai Electrode Co., Ltd.
 
 
Taiwan
Unichemicals Industria e Comercio Ltda.
 
 
Brazil
US Finance Gamma LLC
 
 
Delaware
Valeron Strength Films B.V.B.A.
 
 
Belgium
Veneta Decalcogomme S.r.l.
 
 
Italy
Versachem Chile S.A.
 
 
Chile
Vesta (Guangzhou) Catering Equipment Co. Ltd
 
 
China
Vesta Global Limited
 
 
Hong Kong
Vitronics Soltec B.V.
 
 
Netherlands
VR-Leasing Sarita GmbH & Co. Immobilien KG
 
 
Germany
VS European Holdco BV
 
 
Netherlands
Wachs Canada Ltd.
 
 
Canada
Wachs Subsea LLC
 
 
Illinois

Exhibit 21
Illinois Tool Works Inc.
Subsidiaries
Subsidiary Name
 
 
Primary Jurisdiction


Weigh-Tronix Canada, ULC
 
 
Canada
Weigh-Tronix UK Limited
 
 
United Kingdom
Wilsonart International Holdings LLC
 
 
Delaware
Wujiang Advanced Cleaning Co., Ltd.
 
 
China
Wynn Oil (South Africa) (Pty) Ltd.
 
 
South Africa
Wynn's Automotive France
 
 
France
Wynn's Belgium BVBA
 
 
Belgium
Wynn's Italia Srl
 
 
Italy
Wynn's Mekuba India Pvt Ltd
 
 
India
Zip-Pak International B.V.
 
 
Netherlands

Exhibit
Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-219695 on Form S-3; Registration Statement Nos. 333-105731, 333-69542, 333-145392, and 333-206206 on Form S-8; and Registration Statement No. 333-163547 on Form S-4 of our report dated February 14, 2020, relating to the consolidated financial statements of Illinois Tool Works Inc. and subsidiaries (the “Company”) and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of the Company for the year ended December 31, 2019.



/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
February 14, 2020



Exhibit
Exhibit 24

ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Daniel J. Brutto
 
Daniel J. Brutto
 
 










ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Susan Crown    
 
Susan Crown
 
 

























ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ James W. Griffith    
 
James W. Griffith
 
 






ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Jay L. Henderson
 
Jay L. Henderson
 
 





ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Richard H. Lenny    
 
Richard H. Lenny
 
 









ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ James A. Skinner
 
James A. Skinner
 
 







ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ David B. Smith, Jr.    
 
David B. Smith, Jr.
 
 







ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Pamela B. Strobel    
 
Pamela B. Strobel
 
 


                                                 




ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Kevin M. Warren    
 
Kevin M. Warren
 
 


                                              






















ILLINOIS TOOL WORKS INC.

Form 10-K Annual Report

POWER OF ATTORNEY




KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears below constitutes and appoints E. Scott Santi and Michael M. Larsen, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for her or him and in his or her name, place and stead, in any and all capacities, to sign the Company's Form 10-K Annual Report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

IN WITNESS WHEREOF, the undersigned has executed this power of attorney this 14th day of February, 2020.

 
 /s/ Anré D. Williams
 
Anré D. Williams
 
 


                                              


Exhibit
Exhibit 31

Rule 13a-14(a) Certification

I, E. Scott Santi, certify that:

1
I have reviewed this report on Form 10-K of Illinois Tool Works Inc.;
2
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 14, 2020
 
/s/ E. Scott Santi
 
 
E. Scott Santi
 
 
Chairman & Chief Executive Officer








Exhibit 31

Rule 13a-14(a) Certification

I, Michael M. Larsen, certify that:

1.
I have reviewed this report on Form 10-K of Illinois Tool Works Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Dated: February 14, 2020
 
/s/ Michael M. Larsen
 
 
Michael M. Larsen
 
 
Senior Vice President & Chief Financial Officer


Exhibit
Exhibit 32



Section 1350 Certification


The following statement is being made to the Securities and Exchange Commission solely for purposes of Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), which carries with it certain criminal penalties in the event of a knowing or willful misrepresentation.

Each of the undersigned hereby certifies that the Annual Report on Form 10-K for the period ended December 31, 2019 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the registrant.



Dated: February 14, 2020
 
/s/ E. Scott Santi
 
 
E. Scott Santi
 
 
Chairman & Chief Executive Officer



Dated: February 14, 2020
 
/s/ Michael M. Larsen
 
 
Michael M. Larsen
 
 
Senior Vice President & Chief Financial Officer


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