ITW's 2012 Third Quarter Diluted Income Per Share from Continuing Operations of $1.12 Increases 12 Percent Versus Prior-Year

 ITW's 2012 Third Quarter Diluted Income Per Share from Continuing Operations
 of $1.12 Increases 12 Percent Versus Prior-Year Period; Excluding Impact of
Divestiture Gains, EPS Totals $1.09; Operating Margins of 16.9 Percent Improve
130 Basis Points; Company Repurchases $416 Million of Shares in Third Quarter
                   and $1.4 Billion of Shares Year to Date

PR Newswire

GLENVIEW, Ill., Oct. 23, 2012

GLENVIEW, Ill., Oct. 23, 2012 /PRNewswire/ --Illinois Tool Works Inc. (NYSE:
ITW) today reported third quarter 2012 diluted income per share from
continuing operations of $1.12, a 12 percent increase versus the 2011 third
quarter. Excluding the impact of divestiture gains in the third quarter,
diluted income per share from continuing operations totaled $1.09. While third
quarter total revenues and organic revenues were lower than anticipated due to
the negative impact of currency translation and slowing demand in a variety of
international end markets, operating margins of 16.9 percent outperformed
expectations and reflected improvement across all segments.

Third quarter 2012 financial and operating highlights versus the prior-year
period included:

*Total revenues of $4.501 billion decreased 1.7 percent. Notably, currency
translation negatively impacted revenues by 4.1 percent largely based on a
weaker Euro versus last year. Organic or base revenues grew 0.9 percent, with
North American organic revenues increasing 3.9 percent and international
organic revenues declining 2.7 percent. European and Asia Pacific organic
revenues decreased 3.7 percent and 1.5 percent, respectively. Acquisitions net
of divestitures added 1.4 percent to revenues.

*Operating income of $763 million increased 6.8 percent. Operating margins of
16.9 percent improved 130 basis points due to favorable raw material
price/cost trends as well as effective management of overhead costs within the
businesses.

*Total revenues for the Power Systems and Electronics segment increased 4.6
percent. Segment organic revenues grew 4.5 percent due to contributions from
both the electronics and welding businesses. Total organic revenues for
electronics grew 10.5 percent due to strong contributions from the electronic
assembly businesses. Organic revenues for worldwide welding increased 1.9
percent, with North American welding growing 4.6 percent and international
welding decreasing 5.6 percent. Segment operating margins of 22.0 percent
improved 220 basis points.

*The Company returned nearly $600 million to shareholders via share
repurchases of $416 million and dividends paid of $169 million.

"Even with end markets slowing in a number of international geographies, we
were pleased by the consistent level of end market demand in North America,"
said E. Scott Santi, president and acting chief executive officer. "From a
profitability standpoint, we continued to focus on our differentiated 80/20
business process and, as a result, we produced very strong operating margin
gains in the quarter. We also continued to return significant levels of cash
to our shareholders through our share repurchase and dividend programs."

Looking ahead, the Company believes international end markets will continue to
be sluggish and the impact of currency translation will be modestly negative
in the 2012 fourth quarter. As a result, we now expect full-year total
revenue growth to be in a range of 0 percent to 1 percent. Full-year diluted
income per share from continuing operations is forecasted to be in a range of
$4.06 to $4.14. For the 2012 fourth quarter, the Company is forecasting
diluted income per share from continuing operations to be in a range of $0.86
to $0.94 and total revenues to decline in a range of 1 percent to 4 percent.
The Company expects the previously announced Decorative Surfaces divestiture
transaction to close in the fourth quarter. Both the full year and fourth
quarter forecasts exclude two months of operating contributions from the
Decorative Surfaces segment, gains and expenses related to the transaction, as
well as the impact from the 49 percent ongoing equity interest in the new
Decorative Surfaces entity.

This earnings release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including, without
limitation, statements regarding diluted income per share from continuing
operations, total revenue growth, and the impact of currency translation and
international end market conditions. These statements are subject to certain
risks, uncertainties and other factors which could cause actual results to
differ materially from those anticipated. Such factors include those contained
in ITW's 2011 Form 10-K and 2012 third quarter 10-Q.

Celebrating its 100-year anniversary in 2012, ITW is a Fortune 150 global
diversified industrial manufacturer of value-added consumables and specialty
equipment with related service businesses. The Company focuses on profitable
growth with strong returns across worldwide platforms and businesses. The
businesses serve local customers and markets around the globe, with a
significant presence in developed as well as emerging markets. ITW's revenues
totaled $17.8 billion in 2011, with more than half of the revenues generated
outside of the United States.





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF INCOME (UNAUDITED)
                                      Three Months Ended  Nine Months Ended
(In millions except per share         September 30,       September 30,
amounts)
                                      2012      2011      2012       2011
Operating Revenues                    $ 4,501   $ 4,580   $ 13,703   $ 13,467
Cost of revenues                      2,855     2,962     8,730      8,720
Selling, administrative, and research 811       836       2,516      2,477
and development expenses
Amortization of intangible assets     70        68        217        186
Impairment of goodwill and other      2         —         2          —
intangible assets
Operating Income                      763       714       2,238      2,084
Interest expense                      (53)      (49)      (153)      (138)
Other income (expense)                29        25        60         46
Income from Continuing Operations
Before Income Taxes                   739       690       2,145      1,992
Income Taxes                          214       200       622        412
Income from Continuing Operations     525       490       1,523      1,580
Income from Discontinued Operations   (1)       17        368        49
Net Income                            $ 524     $ 507     $ 1,891    $ 1,629
Income Per Share from Continuing
Operations:
Basic                                 $ 1.13    $ 1.01    $ 3.22     $ 3.20
Diluted                               $ 1.12    $ 1.00    $ 3.20     $ 3.17
Income Per Share from Discontinued
Operations:
Basic                                 $ —       $ 0.04    $ 0.78     $ 0.10
Diluted                               $ —       $ 0.04    $ 0.77     $ 0.10
Net Income Per Share:
Basic                                 $ 1.13    $ 1.04    $ 4.00     $ 3.30
Diluted                               $ 1.12    $ 1.04    $ 3.97     $ 3.27
Shares of Common Stock Outstanding
During the Period:
Average                               464.8     486.3     473.2      494.2
Average assuming dilution             468.1     488.8     476.6      497.9
FREE OPERATING CASH FLOW              Three Months Ended  Nine Months Ended
                                      September 30,       September 30,
                                      2012      2011      2012       2011
Net cash provided by operating        $ 635     $ 787     $ 1,467    $ 1,244
activities
Less: Additions to plant and          (90)      (83)      (274)      (259)
equipment
Free operating cash flow              $ 545     $ 704     $ 1,193    $ 985





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
                                          September30,  December31,
(In millions)
                                          2012           2011
ASSETS
Current Assets:
Cash and equivalents                      $   2,054      $  1,178
Trade receivables                         3,062          2,819
Inventories                               1,760          1,716
Deferred income taxes                     410            366
Prepaid expenses and other current assets 364            384
Assets held for sale                      —              386
Total current assets                      7,650          6,849
Net Plant and Equipment                   2,081          2,025
Investments                               226            409
Goodwill                                  5,506          5,198
Intangible Assets                         2,302          2,233
Deferred Income Taxes                     473            634
Other Assets                              785            636
                                          $   19,023     $  17,984
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt                           $   424        $  502
Accounts payable                          770            697
Accrued expenses                          1,504          1,435
Cash dividends payable                    176            174
Income taxes payable                      48             57
Deferred income taxes                     6              5
Liabilities held for sale                 —              107
Total current liabilities                 2,928          2,977
Noncurrent Liabilities:
Long-term debt                            4,572          3,488
Deferred income taxes                     120            117
Other liabilities                         1,141          1,368
Total noncurrent liabilities              5,833          4,973
Stockholders' Equity:
Common stock                              5              5
Additional paid-in-capital                921            686
Income reinvested in the business         13,168         11,794
Common stock held in treasury             (4,118)        (2,692)
Accumulated other comprehensive income    277            224
Noncontrolling interest                   9              17
Total stockholders' equity                10,262         10,034
                                          $   19,023     $  17,984





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2012       % F(U) vs. prior year
                                                                                Organic
               Total    Operating Operating Total   Organic Operating Operating (Base)
$ in Millions  Revenue  Income    Margin    Revenue (Base)  Income    Margin
                                                    Revenue                     Op
                                                                                Margin
Transportation $ 858    $  135    15.7%     (2.2)%  1.4%    (1.8)%    0.1%      1.1%
Power Systems  813      179       22.0%     4.6%    4.5%    16.6%     2.2%      2.9%
& Electronics
Industrial     599      77        12.8%     (4.6)%  0.2%    19.2%     2.6%      2.5%
Packaging
Food Equipment 491      93        18.8%     (4.0)%  0.3%    11.3%     2.6%      2.3%
Construction   477      60        12.6%     (7.2)%  (2.8)%  (5.4)%    0.1%      0.7%
Polymers &     308      53        17.4%     (7.3)%  (6.7)%  (5.3)%    0.5%      1.2%
Fluids
Decorative     267      35        13.0%     (5.7)%  (1.7)%  1.8%      1.0%      0.8%
Surfaces
All Other      704      131       18.6%     4.1%    4.5%    7.8%      0.6%      2.5%
Intersegment   (16)
Total Company  4,501    763       16.9%     (1.7)%  0.9%    6.8%      1.3%      2.0%
NINE MONTHS ENDED SEPTEMBER 30, 2012        % F(U) vs. prior year
                                                                                Organic
               Total    Operating Operating Total   Organic Operating Operating (Base)
$ in Millions  Revenue  Income    Margin    Revenue (Base)  Income    Margin
                                                    Revenue                     Op
                                                                                Margin
Transportation $ 2,677  $  428    16.0%     2.5%    3.3%    4.3%      0.3%      1.0%
Power Systems  2,414    520       21.6%     7.7%    5.5%    13.4%     1.1%      2.1%
& Electronics
Industrial     1,838    221       12.0%     (2.3)%  0.8%    13.2%     1.6%      1.8%
Packaging
Food Equipment 1,440    244       16.9%     (2.5)%  1.1%    12.3%     2.2%      2.1%
Construction   1,435    156       10.9%     (4.2)%  (1.0)%  (10.3)%   (0.6)%    0.1%
Polymers &     945      156       16.5%     (1.3)%  (1.9)%  2.2%      0.5%      1.2%
Fluids
Decorative     828      112       13.5%     (0.8)%  2.4%    8.0%      1.2%      0.9%
Surfaces
All Other      2,175    401       18.4%     7.3%    2.8%    7.7%      —%        2.1%
Intersegment   (49)
Total Company  13,703   2,238     16.3%     1.7%    2.1%    7.4%      0.8%      1.6%





ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (UNAUDITED)
                                                            Three Months Ended
                                                            September 30, 2012
Diluted EPS from Continuing Operations - As Reported        $     1.12
Impact of Divestitures, Net of Tax                          (0.03)
Diluted EPS from Continuing Operations
Adjusted to Exclude the Net Impact of Divestitures After    $     1.09
Tax



SOURCE Illinois Tool Works Inc.

Website: http://www.itw.com
Contact: John L. Brooklier, +1-847-657-4104, jbrooklier@itw.com
 
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