Illinois Tool Works Inc. · NYSE:ITW

Illinois Tool Works — Investor Presentation (December 2008)

8 slides from Illinois Tool Works's investor presentation, Dec 8, 2008

  1. Slide 1: Capital Structure

    Capital Structure Ron Kropp New York City December 8, 2008

  2. Slide 2: Capital Structure 1998-2007

    Capital Structure 1998-2007 • Target debt-to-capital range of 20-30% – Current debt-to-capital ratio at 28% – Would go above target range for larger a ge acqu acquisitions sto s • Primary uses of free operating cash flow: – Dividends „ Dividends – Acquisitions „ Acquisition „ Investments – Share rep

  3. Slide 3: Primary Uses of Free Cash Flow

    Primary Uses of Free Cash Flow • Dividends – Guideline of 25-35% of trailing two years net income – Increased annual dividend rate from $1.12 to $1.24 (11% increase) in August 2008 • Acquisitions: – Preferred use of free operating cash flow – 2008 range: annualized revenues of $1.5 to $1.6 billion •

  4. Slide 4: Debt Capacity by Type

    Debt Capacity by Type $5,440 (in millions) Debt outstanding at 9/30/08: „ Euro Fixed $1 100 $1,100 US$ bonds $ 940 Euro bonds 1,100 Commercial paper 1,493 1 493 $3,000 Other 64 „ US$ Variable $3,595 Debt-to-capital % 28.3% $940 „ US$ Fixed $350 „ Euro Variable $50 „ Other Oth

  5. Slide 5: Liquidity

    Liquidity • Primary sources of liquidity are strong free cash flow and credit facilities • Credit facilities recently increased from $2.0 billion to $3.0 billion • Credit facilities used to backstop commercial paper program – No issues with placing commercial paper – “Flight to quality” - rated A1+/

  6. Slide 6: Free Cash Flow 1998-2007

    Free Cash Flow 1998-2007 CAGR Net Income = 11% Free Cash = 15% Recession „ Free Cash „ Net Income Linear (Free Cash)

  7. Slide 7: Capital Structure Summary

    Capital Structure Summary • Strong conservative balance sheet with strong credit ratings • Have historically generated strong cash flow in downturns do tu s • No liquidity issues • Ample short short-term term debt capacity • Readily accessible debt capital markets

  8. Slide 8: Questions ??

    Questions ??

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