Illinois Tool Works Inc. : ITW Reports 2011 Fourth Quarter Diluted Income Per Share from Continuing Operations of $0.90, a 36 Percent Increase; Total Revenues Grow 10.4 Percent and Organic Revenues Increase 5.9 Percent in the Quarter; Company Achieves Record Full-Year Revenues and Operating Earnings; Company Forecasts 2012 Full-Year Earnings Range of $4.02 to $4.26

GLENVIEW, Ill., Jan. 31, 2012/PRNewswire/ -- Illinois Tool Works Inc. (NYSE: ITW) today reported fourth quarter 2011 diluted income per share from continuing operations of $0.90, a 36 percent increase compared to the 2010 fourth quarter. Total revenues of $4.319 billionin the 2011 fourth quarter were 10.4 percent higher than the year-ago period.

Fourth quarter 2011 financial highlights versus the prior-year period included:

• Organic or base revenues grew 5.9 percent, with North American organic revenues increasing 8.7 percent and international organic revenues growing 3.0 percent. Notably, European organic revenues grew 2.6 percent while Chinaorganic revenues increased 9.8 percent.
• Acquisitions net of divestitures added 4.7 percent to revenues while currency translation negatively impacted revenues by 0.4 percent.
• The Company's fourth quarter operating income of $647.1 millionand income from continuing operations of $437.1 millionincreased 34 percent and 33 percent, respectively. The fourth quarter income tax rate of 27.2 percent was lower than the forecasted rate of 29.0 percent, resulting in an additional $0.02of diluted earnings per share.
• Total Company operating margins of 15.0 percent were 270 basis points higher due to the improvement in base operating margins of 330 basis points. Restructuring, acquisitions and currency translation modestly offset margin gains. Seven of the Company's eight reporting segments reported operating margin improvement in the quarter.
• Free operating cash flow totaled $617 millionin the fourth quarter, representing a free operating cash flow conversion ratio of 140 percent versus net income.

Operating highlights for the 2011 fourth quarter compared to the year-ago period featured:

• Total revenues for the Power Systems and Electronics segment increased 16.0 percent. Segment organic revenues grew 10.2 percent mainly due to contributions from the worldwide welding equipment and consumables businesses. The worldwide welding businesses' organic revenues increased 22.8 percent, with North American welding growing organic revenues 25.2 percent. Organic revenues for international welding increased 16.4 percent, with Chinaand Europecontributing to growth.  Key worldwide end markets for the welding businesses continued to include oil and gas as well as heavy equipment manufacturers. Organic revenues for the total electronics businesses declined 7.7 percent. Both the PC board fabrication and other electronics businesses were hampered by slowing consumer demand and customer inventory corrections in the quarter. Total segment operating margins of 19.5 percent were 190 basis points higher than the year-ago period.
• Total revenues for the Transportation segment increased 20.9 percent. Segment organic revenues grew 8.7 percent in part due to ongoing strength in automotive OEM car builds and related product penetration. The Company's worldwide automotive OEM organic revenues increased 7.9 percent compared to a fourth quarter worldwide car build growth rate of 1 percent. North American and European automotive organic revenues increased 8.0 percent and 7.7 percent, respectively. The Company's automotive aftermarket and truck remanufacturing businesses also contributed to revenue growth, with organic revenues growing 5.6 percent and 19.5 percent, respectively. Total segment operating margins of 15.0 percent were 200 basis points higher than the year-earlier period.

"Our fourth quarter financial performance was a solid effort by the ITW team," said Chairman and Chief Executive Officer David B. Speer. "We produced strong top line growth, solid margin improvement and impressive free operating cash flow. The fourth quarter capped off very strong full-year performance, with 2011 revenues growing 15.4 percent and organic revenues increasing 7.5 percent.  This helped us achieve record 2011 full-year revenues as well as record operating earnings.  We also delivered 15.4 percent operating margins that were 80 basis points higher than 2010."

Looking ahead to 2012, the Company is forecasting 2012 full-year diluted income per share from continuing operations to be in a range of $4.02 to $4.26and assumes a total revenue growth range of 5.0 percent to 8.0 percent. For the 2012 first quarter, the Company is forecasting diluted income per share from continuing operations to be in a range of $0.89 to $0.97and assumes a total revenue growth range of 6.0 percent to 9.0 percent.

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 and total revenue growth. 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 2010 Form 10-K.

Celebrating its 100-year anniversary in 2012, ITW (NYSE: ITW) is a Fortune 200 global diversified industrial manufacturer of value-added consumables and specialty equipment with related service businesses. The company focuses on profitable growth and strong returns across worldwide platforms and businesses. These 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 billionin 2011, with more than half of these revenues generated outside of the United States.

ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES
STATEMENT OF INCOME (UNAUDITED)
(In thousands except per share amounts)
		THREE MONTHS ENDED					TWELVE MONTHS ENDED
		DECEMBER 31,					DECEMBER 31,
		2011			2010		2011		2010
Operating Revenues	$	4,319,308	$		3,913,748	$	17,786,583	$	15,415,692
Cost of revenues		2,798,365			2,606,132		11,517,885		9,996,668
Selling, administrative, and research and development expenses		804,774		772,307			3,282,352		2,956,574
Amortization of intangible assets		69,087			52,727		255,338		207,427
Impairment of goodwill and other intangible assets		-			-		-		1,006
Operating Income		647,082			482,582		2,731,008		2,254,017
Interest expense		(54,172)			(44,109)		(192,133)		(175,163)
Other income (expense)		7,905			2,938		53,839		9,984
Income from Continuing Operations Before Income Taxes		600,815			441,411		2,592,714		2,088,838
Income Taxes		163,700			113,115		575,700		636,400
Income from Continuing Operations		437,115			328,296		2,017,014		1,452,438
Income from Discontinued Operations		5,082			7,367		54,370		50,514
Net Income	$	442,197	$		335,663	$	2,071,384	$	1,502,952
Income Per Share from Continuing
Operations:
Basic		$0.90			$0.66		$4.10		$2.90
Diluted		$0.90			$0.66		$4.08		$2.89
Income Per Share from Discontinued
Operations:
Basic		$0.01			$0.01		$0.11		$0.10
Diluted		$0.01			$0.01		$0.11		$0.10
Net Income Per Share:
Basic		$0.91			$0.68		$4.21		$3.00
Diluted		$0.91			$0.67		$4.19		$2.99
Shares outstanding during the period:
Average		483,367			496,710		491,439		500,772
Average assuming dilution		485,639			499,898		494,646		503,350

ESTIMATED FREE OPERATING CASH FLOW
		THREE MONTHS ENDED				TWELVE MONTHS ENDED
		DECEMBER 31,				DECEMBER 31,
		2011		2010		2011		2010
Net cash provided by operating activities	$	711,663

ILLINOIS TOOL WORKS INC. AND SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION (UNAUDITED)
(In thousands)
		DECEMBER 31,		DECEMBER 31,
ASSETS		2011		2010
Current Assets:
Cash and equivalents	$	1,177,875	$	1,186,367
Trade receivables		2,818,892		2,581,592
Inventories		1,715,859		1,634,856
Deferred income taxes		365,905		301,486
Prepaid expenses and other current assets		384,491		266,187
Assets held for sale		386,324		-
Total current assets		6,849,346		5,970,488
Noncurrent Assets:
Net plant and equipment		2,025,396		2,066,156
Investments		408,906		440,760
Goodwill		5,197,601		4,971,818
Intangible assets		2,233,378		1,731,016
Deferred income taxes		633,832		615,326
Other assets		635,055		616,747
	$	17,983,514	$	16,412,311
LIABILITIES and STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt	$	502,063	$	326,236
Accounts payable		696,776		749,489
Accrued expenses		1,435,603		1,391,396
Cash dividends payable		174,099		169,233
Income taxes payable		56,517		386,498
Deferred income taxes		4,821		-
Liabilities held for sale		106,848		-
Total current liabilities		2,976,727		3,022,852
Noncurrent Liabilities:
Long-term debt		3,488,198		2,542,087
Deferred income taxes		116,954		194,590
Other liabilities		1,367,571		1,080,783
Total noncurrent liabilities		4,972,723		3,817,460
Stockholders' Equity:
Common stock		5,425		5,385
Additional paid-in-capital		686,155		460,806
Income reinvested in the business		11,794,184		10,407,946

SOURCE Illinois Tool Works Inc.

John L. Brooklier of Illinois Tool Works Inc., [phone], [e-mail]