Slide 1: ITW Conference Call Fourth Quarter 2011
Exhibit 99.2 ITW Conference Call Fourth Quarter 2011 January 31, 2012 Q4 2011 Conference Call 1
Slide 2: Agenda
ITW Agenda g 1. Introduction…………………...….. John Brooklier 2. Fourth Quarter Highlights……... David Speer 3 Financial Overview…………..….. 3. Overview Ron Kropp 4. Reporting Segments………....…. John Brooklier 5. 2012 Forecasts…..……….….…… Ron Kropp 6. Q & A………………......……...…... John Brooklier/Ron Kropp/David
Slide 3: Forward-Looking Statements
ITW Forward - Looking g Statements This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding operating performance performance, revenue growth growth, diluted income per shar
Slide 4: Conference Call Playback
Conference Call Playback Replay number: 800-704-0516; No pass code necessary Telephone replay available through midnight of Feb. 14, 2012 Webcast / PowerPoint replay available at www.itw.com Supplemental financial and investor information will be available on the ITW website under the “Investor Rela
Slide 5: Q4 and Full Year 2011 Highlights
Q4 and Full Year 2011 Highlights Q4 • Generated total revenue and organic growth of 10.4% and 5.9%, respectively • Delivered strong diluted EPS growth of 36% • Produced total company operating margins of 15.0%: +270 basis points • Generated $617 million in free operating cash flow – 140% of net inco
Slide 6: Quarterly Highlights
ITW Quarterly Q y Highlights g g $ in Millions 2010 2011 F(U) Last Year Q4 Q4 Amount % Operating Revenues 3,913.7 4,319.3 405.6 10.4% Operating Income 482.6 647.1 164.5 34.1% % of Revenues 12.3% 15.0% 2.7 pts Income from Continuing Operations Income Amount 328.3 437.1 108.8 33.1% Income Per Share-Di
Slide 7: Quarterly Operating Analysis
ITW Quarterly y Operating p g Analysis y % F(U) Prior Year Operating Operating Operating Revenues Income Margins Base Manufacturing Business Operating Leverage 5.9% 19.1% 1.6% Changes in VM & OH costs - 14 6% 14.6% 1 7% 1.7% Total 5.9% 33.7% 3.3% Acquisitions/Divestitures 4.7% 3.9% -0.2% Translation
Slide 8: Non Operating & Taxes
ITW Non Operating p g & Taxes $ in Millions 2010 2011 F(U) Last Year Q4 Q4 Amount % Operating Income 482.6 647.1 164.5 34.1% Interest Expense (44.1) (54.2) (10.1) Other Income / (Expense) 29 2.9 79 7.9 50 5.0 Income from Continuing Operations - Pretax 441.4 600.8 159.4 36.1% Income Taxes 113.1 163.7
Slide 9: Cash Flow
ITW Cash Flow $ in Millions Quarter 2010 2011 Q4 Q4 Net Income 335.7 335 7 442.2 442 2 Adjust for Non-Cash Items 19.5 38.8 Changes in Trade Receivables 188.4 164.4 Changes in Inventories (10.3) 78.1 Changes in all other Operating Assets & Liabilities (177.2) (11.8) Net Cash From Operating Activities
Slide 10: Full Year Highlights
ITW Full Year Highlights g g $ in Millions 2010 2011 F(U) Last Year Amount % Operating Revenues 15,415.7 17,786.6 2,370.9 15.4% Operating Income 2,254.0 2,731.0 477.0 21.2% % of Revenues 14.6% 15.4% 0.8 pts Income from Continuing Operations Income Amount 1,452.4 2,017.0 564.6 38.9% Income Per Share-
Slide 11: Full Year Operating Analysis
ITW Full Year Operating p g Analysis y % F(U) Prior Year Operating Operating Operating R Revenues I Income M Margins i Base Manufacturing Business Operating Leverage 7.5% 21.0% 1.9% Changes in VM & OH costs - -4.9% -0.7% Total 7.5% 16.1% 1.2% Acquisitions/Divestitures 4.8% 2.3% -0.4% Translation 3.1
Slide 12: Full Year Cash Flow
ITW Full Year Cash Flow $ in Millions Full Year 2010 2011 FY FY Net Income 1,503.0 1 503 0 2,071.4 2 071 4 Adjust for Non-Cash Items 430.9 455.6 Changes in Trade Receivables (170.6) (303.0) Changes in Inventories (223.6) (50.6) Changes in all other Operating Assets & Liabilities (51.4) (217.4) Net C
Slide 13: Invested Capital
ITW Invested Capital $ in Millions 12/31/10 9/30/11 12/31/11 Trade Receivables 2,581.6 2,985.4 2,818.9 ays Sa Days Sales es Outsta Outstanding d g 57.7 * 5 58.7 58 58.7 58 Inventories 1,634.9 1,794.3 1,715.9 Months on Hand 1.8 ** 1.8 1.8 Prepaids and Other Current Assets 266.2 498.1 384.5 Accounts P
Slide 14: Debt & Equity
ITW Debt & Equity q y $ in Millions 12/31/10 9/30/11 12/31/11 Short Term Debt 326.3 1,040.8 502.1 Long Term Debt 2,542.1 3,522.1 3,488.2 Total Debt 2,868.4 4,562.9 3,990.3 Stockholders' Equity 9,572.0 9,852.0 10,034.1 Total Capital 12,440.4 14,414.9 14,024.4 Less: Cash (1,186.4) (1 186 4) (1,318.9)
Slide 15: Acquisition Activity
ITW Acquisition Activity 2010 2011 $ in Millions Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Annualized Revenues 26 253 120 131 530 329 156 296 86 867 Acquired Amount Paid 27 199 145 160 531 556 190 480 110 1,336 Number of 4 7 5 8 24 6 7 8 7 28 Acquisitions 81% of acquired revenues in 2011 directly tied t
Slide 16: Recent Acquisition: Brooks Instrument
Recent Acquisition: Brooks Instrument Complements p Growing g Test & Measurement Platform • Closed January 2012 • 2011 revenues: $210 million – nearly half of revenues coming from Asia, Europe and the Middle East • Highly-branded provider of specialty devices usedd tto measure and d control t l th t
Slide 17: Transportation Quarterly Analysis
Transportation Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income g Margins 2011 Q4 757.4 113.7 15.0% • Segment organic revenues: 8.7% 2010 Q4 626.5 81.1 13.0% • Auto OEM/Tiers: Worldwide base $ Inc(Dec) 130.9 32.6 2.0% revenue gro
Slide 18: Power Systems and Electronics Quarterly Analysis
Power Systems and Electronics Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income g Margins 2011 Q4 714.3 139.2 19.5% • Segment organic revenues: 10.2% due to strong contributions from 2010 Q4 616.0 108.2 17.6% worldwide welding $ I
Slide 19: Industrial Packaging Quarterly Analysis
Industrial Packaging Quarterlyy Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income g Margins 2011 Q4 618.9 61.1 9.9% • Segment organic revenues: 3.8% reflected slowing industrial 2010 Q4 577.5 48.4 8.4% production demand in Europe $ Inc(Dec) 4
Slide 20: Food Equipment Quarterly Analysis
Food Equipment Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income Margins g 2011 Q4 507.0 86.5 17.1% • Segment organic revenues: 3.9% as equipment sales strengthened in 2010 Q4 488.6 50.5 10.3% North America; service revenues $ Inc
Slide 21: Construction Products Quarterly Analysis
Construction Products Quarterly Analysis Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income Margins 2011 Q4 461.5 51.7 11.2% • Segment organic revenues: 2.6% as North America and Europe 2010 Q4 446.7 39.4 8.8% posted positive organic revenue growth $ Inc
Slide 22: Polymers and Fluids Quarterly Analysis
Polymers and Fluids Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income Margins g 2011 Q4 316.7 38.4 12.1% • Segment organic revenues: 3.2% reflected modestly slowing 2010 Q4 283.6 38.0 13.4% industrial demand for both polymer and f
Slide 23: Decorative Surfaces Quarterly Analysis
Decorative Surfaces Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key y Points ((Q4’11 vs. Q4’10)) Revenues Income Margins g 2011 Q4 248.1 28.8 11.6% • Segment organic revenues: 3.5% 2010 Q4 241.0 21.8 9.0% • North America laminate base $ Inc(Dec) 7.1 7.0 2.6% revenues:
Slide 24: All Other Quarterly Analysis
All Other Quarterly y Analysis y Q4 2011 $ in Millions Operating Operating Operating Key Points (Q4’11 vs. Q4’10) Revenues Income Margins • Segment organic revenues: 2011 Q4 711.6 127.6 17.9% 6.5% 2010 Q4 657.4 95.1 14.5% $ Inc(Dec) 54.2 32.5 3.4% • Worldwide test and measurement base revenues: % In
Slide 25: 2012 Forecast
ITW 2012 Forecast Mid Low High Point 1st Quarter 2012 Total Revenues 6.0% 9.0% 7.5% Diluted Income per Share from Cont Operations $0.89 $0.97 $0.93 % F(U) 1st Quarter 2011 * 1% 10% 6% Full Year 2012 Total Revenues 5.0% 8.0% 6.5% Diluted Income per Share from Cont Operations $4.02 $4.26 $4.14 % F(U)
Slide 26: ITW Conference Call Q&A
ITW Conference Call Q&A Fourth F th Quarter Q t 2011 January 31, 2012 Q4 2011 Conference Call 26