Illinois Tool Works Inc. · NYSE:ITW

Illinois Tool Works — Q1 2012 Earnings Presentation

19 slides from Illinois Tool Works's earnings presentation, Apr 24, 2012

1. Slide 1: ITW Conference Call First Quarter 2012

   April 24, 2012 100 YEARS STRONG ITW Conference Call First Quarter 2012

2. Slide 2: Forward-Looking Statements

   PROFITABLE GROWTH, STRONG RETURNS 2 Forward-Looking Statements Safe Harbor Statement This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding strategic initiatives and relat

3. Slide 3: Conference Call Playback

   PROFITABLE GROWTH, STRONG RETURNS 3 Conference Call Playback • Replay number: 866-365-2451; No pass code necessary • Telephone replay available through midnight of May 8, 2012 • Webcast / PowerPoint replay available at www.itw.com • Supplemental financial and investor information will be available o

4. Slide 4: Key Long-Term Initiatives

   PROFITABLE GROWTH, STRONG RETURNS 4 Key Long-Term Initiatives • ITW is committed to these shareholder value-adding initiatives • These initiatives will enable our decentralized management to better leverage ITW’s core competitive advantages globally • These multi-year ongoing initiatives will enhanc

5. Slide 5: Q1 2012 total revenue growth and operating results

   PROFITABLE GROWTH, STRONG RETURNS 5 • Total revenue growth of 6.4%, with mix of organic and acquired revenues • Strong North America (US) demand drives performance • Operating margins of 15.5%; 10 bps higher than last year • Q1 2012 tax rate: 29% • EPS of $0.97 at high end of forecasted range * Q1 2

6. Slide 6: Organic revenue growth, margins and restructuring

   PROFITABLE GROWTH, STRONG RETURNS 6 • Organic revenue growth: 3.2% • Price / cost margin impact: +40 bps • Acquisition margins excluding amortization: 14.5% • Currency negatively impacted EPS by $0.01 primarily due to weaker Euro • Restructuring expense of $33m, $25m higher than last year

7. Slide 7: Free Operating Cash Flow is expected to increase as the year progresses

   PROFITABLE GROWTH, STRONG RETURNS 7 Free Operating Cash Flow is expected to increase as the year progresses * See the Appendix for the reconciliation from GAAP to non-GAAP measurements.

8. Slide 8: Capital Allocation Priorities

   PROFITABLE GROWTH, STRONG RETURNS 8 * See the Appendix for the reconciliation from GAAP to non-GAAP measurements. • Organic investments focused on key growth platforms and emerging market opportunities • Over $600M returned to shareholders • $275M annualized revenues acquired in Q1; led by Brooks In

9. Slide 9: Completed sale of Finishing businesses to Graco Inc.

   PROFITABLE GROWTH, STRONG RETURNS 9 • On April 2 nd , completed sale of the $375 million Finishing businesses to Graco Inc. – $650 million cash transaction – Estimated pretax gain of $450 million to be recorded in the second quarter in discontinued operations – Brands include Gema, Ransburg, DeVilbi

10. Slide 10: Regional performance: North America, Europe, Asia Pacific

    PROFITABLE GROWTH, STRONG RETURNS 10 • North America (US) drives organic growth • European performance slightly negative but at forecasted levels • Asia Pacific reflects moderating growth in China and Australia

11. Slide 11: * See the Appendix for the reconciliation from GAAP to non-GAAP measurements.

    PROFITABLE GROWTH, STRONG RETURNS 11 * See the Appendix for the reconciliation from GAAP to non-GAAP measurements.

12. Slide 12: * Q1 2011 excludes a $166 million tax benefit, or $0.33 per share, associated

    PROFITABLE GROWTH, STRONG RETURNS 12 * Q1 2011 excludes a $166 million tax benefit, or $0.33 per share, associated with an Australian tax matter. See the Appendix for the reconciliation from GAAP to non-GAAP measurements.

13. Slide 13: Q&A

    100 YEARS STRONG PROFITABLE GROWTH, STRONG RETURNS Q&A

14. Slide 14: Appendix: GAAP to Non-GAAP Reconciliations

    100 YEARS STRONG PROFITABLE GROWTH, STRONG RETURNS Appendix: GAAP to Non-GAAP Reconciliations

15. Slide 15: Income from Continuing Operations reconciliation

    PROFITABLE GROWTH, STRONG RETURNS 15 * Q1 2011 excludes a $166 million tax benefit, or $0.33 per share, associated with an Australian tax matter.

16. Slide 16: Return on Average Invested Capital

    PROFITABLE GROWTH, STRONG RETURNS 16 The Company uses return on average invested capital (“ROIC”) to measure the effectiveness of its operations' use of invested capital to generate profits. Invested capital represents the net assets of the Company, excluding cash and cash equivalents and outstandin

17. Slide 17: Free Operating Cash Flow reconciliation

    PROFITABLE GROWTH, STRONG RETURNS 17 For further information on free operating cash flow, see the Company’s annual report on Form 10-K for 2011.

18. Slide 18: Total Debt to EBITDA

    PROFITABLE GROWTH, STRONG RETURNS 18 For further information on total debt to EBITDA, see the Company’s annual report on Form 10-K for 2011.

19. Slide 19: PROFITABLE GROWTH, STRONG RETURNS 19

    PROFITABLE GROWTH, STRONG RETURNS 19

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