1
ITW Conference Call
Second Quarter
2009
Exhibit 99.2
2
ITW
Agenda
1. Introduction…………………...….. John Brooklier/David Speer
2. Financial Overview…………..….. Ron Kropp
3. Reporting Segments………....…. John Brooklier
4. 2009 Third Quarter Forecast…… Ron Kropp
5. Q & A………………......……...…... John Brooklier/Ron Kropp/David Speer
3
ITW
Forward - Looking 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, revenue growth, diluted income per
share from continuing operations, restructuring expenses and
related benefits, tax rates, end market conditions, and the
Company’s related forecasts. These statements are subject to
certain risks, uncertainties, and other factors which could
cause actual results to differ materially from those
anticipated. Important risks that could cause actual results to
differ materially from the Company’s expectations are detailed
in ITW’s Form 10-K for 2008.
4
Conference Call Playback
Replay number: 203-369-3416
No pass code necessary
Telephone replay available through midnight of
August 5, 2009
Webcast / PowerPoint replay available at
itw.com website
5
ITW
Quarterly Highlights
2008
2009
Q2
Q2
Amount
%
Operating Revenues
4,555.9
3,392.9
(1,163.0)
-25.5%
Operating Income
757.2
334.8
(422.4)
-55.8%
% of Revenues
16.6%
9.9%
-6.7%
Income from Continuing Operations
Income Amount
528.7
178.9
(349.8)
-66.2%
Income Per Share-Diluted
1.01
0.36
(0.65)
-64.4%
Net Income
Income Amount
528.1
176.6
(351.5)
-66.6%
Income Per Share-Diluted
1.01
0.35
(0.66)
-65.3%
Free Operating Cash Flow
354.1
566.7
212.6
60.0%
F(U) Last Year
6
ITW
Quarterly Operating Analysis
Operating
Operating
Operating
Revenues
Income
Margins
Base Manufacturing Business
Operating Leverage
-22.2%
-55.3%
-7.1%
Changes in VM & OH costs
-
14.6%
3.1%
Total
-22.2%
-40.7%
-4.0%
Acquisitions/Divestitures
5.3%
-0.2%
-0.8%
Translation
-8.8%
-8.9%
-0.7%
Impairment
-
-
-
Restructuring
-
-5.9%
-1.3%
Other
0.2%
-0.1%
0.1%
Total
-25.5%
-55.8%
-6.7%
% F(U) Prior Year
7
ITW
Non Operating & Taxes
2008
2009
Q2
Q2
Amount
%
Operating Income
757.2
334.8
(422.4)
-55.8%
Interest Expense
(36.6)
(43.9)
(7.3)
Other Income (Expense)
24.3
(19.8)
(44.1)
Income from Continuing Operations-Pretax
744.9
271.1
(473.8)
-63.6%
Income Taxes
216.2
92.2
124.0
% to Pretax Income
29.0%
34.0%
-5.0%
Income from Continuing Operations
528.7
178.9
(349.8)
-66.2%
Loss from Discontinued Operations
(0.6)
(2.3)
(1.7)
Net Income
528.1
176.6
(351.5)
-66.6%
F(U) Last Year
8
ITW
Invested Capital
6/30/08
3/31/09
6/30/09
Trade Receivables
3,302.3
2,209.7
2,393.2
Days Sales Outstanding
65.2
63.2
63.5
Inventories
1,845.6
1,566.6
1,438.6
Months on Hand
1.9
2.2
1.9
Prepaids and Other Current Assets
408.4
372.2
453.4
Accounts Payable & Accrued Expenses
(2,364.4)
(1,712.0)
(1,901.1)
Operating Working Capital
3,191.9
2,436.5
2,384.1
% to Revenue(Prior 4 Qtrs.)
19%
15%
16%
Net Plant & Equipment
2,285.0
2,068.7
2,138.0
Investments
506.4
458.5
450.9
Goodwill and Intangibles
6,279.9
6,118.1
6,373.8
Net Assets Held for Sale
139.6
25.2
6.8
Other, net
(607.7)
(978.9)
(1,007.6)
Invested Capital
11,795.1
10,128.1
10,346.0
ROIC - 1Q09 excludes impairment & tax charges
18.8%
2.6%
8.6%
9
ITW
Debt & Equity
6/30/08
3/31/09
6/30/09
Total Capital
Short Term Debt
1,465.9
1,131.2
180.5
Long Term Debt
1,462.4
2,744.4
2,855.8
Total Debt
2,928.3
3,875.6
3,036.3
Stockholders' Equity
9,506.9
7,373.7
7,926.1
Total Capital
12,435.2
11,249.3
10,962.4
Less:
Cash
(640.2)
(1,121.1)
(616.4)
Net Debt & Equity
11,795.0
10,128.2
10,346.0
Debt to Total Capital
24%
34%
28%
Shares outstanding at end of period
519.4
499.3
499.7
10
ITW
Cash Flow
2008
2009
Q2
Q2
Net Income
528.1
176.6
Adjust for Non-Cash Items
123.3
204.5
Changes in Operating Assets & Liabilities
(201.3)
243.0
Net Cash From Operating Activities
450.1
624.1
Additions to Plant & Equipment
(96.0)
(57.4)
Free Operating Cash Flow
354.1
566.7
Stock Repurchases
(200.0)
-
Acquisitions
(442.2)
(49.1)
Proceeds from Divestitures
4.7
17.2
Dividends
(146.4)
(154.8)
Proceeds (Repayments) from Debt
110.4
(965.7)
Proceeds from Investments
10.0
2.6
Other
22.1
78.4
Net Cash Decrease
(287.3)
(504.7)
11
ITW
Acquisitions
Q1
Q2
Q3
Q4
Q1
Q2
Annual Revenues Acquired
230
308
847
154
75
54
Purchase Price
Cash Paid
223
439
745
190
65
35
Number of Acquisitions
16
10
14
10
6
5
2008
2009
12
Industrial Packaging
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
718.0
94.5
13.2%
2009 Q2
460.3
16.3
3.5%
$ F(U)
(257.7)
(78.2)
-9.7%
% F(U)
-35.9%
-82.8%
% F(U) Prior Year
Base Business
Operating Leverage
-26.1%
-84.7%
-10.5%
Changes in VM & OH costs
-
19.2%
3.4%
Total
-26.1%
-65.5%
-7.1%
Acquisitions
0.8%
-0.8%
-0.2%
Translation
-10.6%
-11.4%
-1.5%
Impairment
-
-
-
Restructuring
-
-5.1%
-0.9%
Other
-
-
-
Total
-35.9%
-82.8%
-9.7%
13
Industrial Packaging
Key Points
Total segment base revenues: -26.1% for Q2 ’09 vs. -24.5% for Q1 ’09
Q2 North America base revenues declined 31.9% as U.S. industrial
production declined further to -15.2% in June 2009 vs. -14.6% in
March 2009
Base revenue declined largely due to notable fall-off in demand
for products in troubled end markets like primary metals, lumber,
brick & block, general manufacturing
Q2 International base revenues declined 27.3% as Euro-Zone
industrial production decreased 16.8% in May 2009 vs. -18.5% in
March 2009
14
Power Systems and Electronics
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
648.8
142.1
21.9%
2009 Q2
398.5
61.2
15.3%
$ F(U)
(250.3)
(80.9)
-6.6%
% F(U)
-38.6%
-57.0%
% F(U) Prior Year
Base Business
Operating Leverage
-36.5%
-62.9%
-9.1%
Changes in VM & OH costs
-
13.2%
4.5%
Total
-36.5%
-49.7%
-4.6%
Acquisitions
2.0%
-0.6%
-0.7%
Translation
-4.1%
-3.1%
-0.1%
Impairment
-
-
-
Restructuring
-
-3.6%
-1.2%
Other
-
-
-
Total
-38.6%
-57.0%
-6.6%
15
Power Systems and Electronics
Key Points
Total segment base revenues: -36.5% in Q2 ’09 vs. -31.9% in Q1 ’09
In Q2, Welding’s worldwide base revenues: -37%
Q2 North America base revenues:-41.3%
Q2 International base revenues:-26.4%
PC board base revenues declined 59.2% in Q2 due to fall-off in
consumer demand for electronic products (cell phones, PDA’s)
Ground Support Equipment: +4% in Q2 driven by
commercial/military airport infrastructure demand
16
Transportation
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
630.4
99.7
15.8%
2009 Q2
502.3
24.3
4.8%
$ F(U)
(128.1)
(75.4)
-11.0%
% F(U)
-20.3%
-75.6%
% F(U) Prior Year
Base Business
Operating Leverage
-23.7%
-55.9%
-6.7%
Changes in VM & OH costs
-
0.2%
-
Total
-23.7%
-55.7%
-6.7%
Acquisitions
12.7%
-1.8%
-1.4%
Translation
-9.4%
-11.7%
-1.6%
Impairment
-
-
-
Restructuring
-
-6.4%
-1.3%
Other
0.1%
-
-
Total
-20.3%
-75.6%
-11.0%
17
Transportation
Key Points
Total segment base revenues improved quarter to quarter: -23.7% in
Q2 ’09 vs. -35.5% in Q1 ’09
Auto OEM/Tiers:
International Auto Q2 base revenues: -22.5% in Q2 ’09 vs. -44.1% in Q1
’09
European Q2 builds: Improve to 4.1 million units in Q2 ‘09 vs.
3.0 million units in Q1 ’09 in part due to “cash for clunkers”
auto incentive program
North American Auto Q2 base revenues: -39.5% vs. -46.4% in Q1
‘09
Q2 combined build: -49%
Q2 Detroit 3 builds -46%: GM: -54%; Ford: -34%; and
Chrysler: -85%
Q2 New Domestics: -39%
Auto aftermarket Q2 worldwide base revenues: -12.7%
18
Food Equipment
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
538.5
73.7
13.7%
2009 Q2
451.4
58.4
12.9%
$ F(U)
(87.1)
(15.3)
-0.8%
% F(U)
-16.2%
-20.7%
% F(U) Prior Year
Base Business
Operating Leverage
-8.5%
-25.5%
-2.6%
Changes in VM & OH costs
-
18.5%
2.8%
Total
-8.5%
-7.0%
0.2%
Acquisitions
1.6%
-
-0.2%
Translation
-9.3%
-10.5%
-0.3%
Impairment
-
-
-
Restructuring
-
-3.2%
-0.5%
Other
-
-
-
Total
-16.2%
-20.7%
-0.8%
19
Food Equipment
Key Points
Total segment base revenues: -8.5% in Q2 ’09 vs. -9.2% in Q1 ’09
North America Q2 base revenues: -8.4% as demand for
equipment declined but better than the -13.7% decrease in Q1 ‘09
Q2 Institutional/restaurant base revenues: -13.2% vs. -18.1%
in Q1 ’09
International Q2 base revenues: -10.2% in Q2 ’09 vs. -5.5% in Q1
‘09
20
Construction Products
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
566.2
80.0
14.1%
2009 Q2
370.7
21.7
5.9%
$ F(U)
(195.5)
(58.3)
-8.2%
% F(U)
-34.5%
-72.8%
% F(U) Prior Year
Base Business
Operating Leverage
-22.1%
-65.1%
-7.8%
Changes in VM & OH costs
-
11.4%
2.1%
Total
-22.1%
-53.7%
-5.7%
Acquisitions
0.7%
-0.6%
-0.2%
Translation
-13.1%
-16.9%
-2.1%
Impairment
-
-
-
Restructuring
-
-1.7%
-0.3%
Other
-
0.1%
0.1%
Total
-34.5%
-72.8%
-8.2%
21
Construction Products
Key Points
Total segment base revenues: -22.1% in Q2 ’09 vs. -21.2% in Q1 ’09
North America Q2 base revenues: -34% vs. -31% in Q1 ‘09
Q2 Residential: -43% base revenues; same as Q1 ‘09
Q2 Commercial Construction base revenues: -32.7% vs. -32.0%
in Q1 ‘09
Q2 Renovation: -19.6% vs. -18.0% in Q1 ‘09
International Q2 base revenues: -20.2% vs. -19.7% in Q1 ‘09
Q2 Europe: base revenues -30.2%
Q2 Asia-Pacific: base revenues -2.5%
22
Polymers and Fluids
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
299.2
53.7
17.9%
2009 Q2
278.7
28.9
10.4%
$ F(U)
(20.5)
(24.8)
-7.5%
% F(U)
-6.9%
-46.1%
% F(U) Prior Year
Base Business
Operating Leverage
-15.1%
-37.0%
-4.6%
Changes in VM & OH costs
-
14.1%
3.0%
Total
-15.1%
-22.9%
-1.6%
Acquisitions
19.2%
-2.7%
-3.1%
Translation
-11.0%
-11.4%
-0.9%
Impairment
-
-
-
Restructuring
-
-9.1%
-1.9%
Other
-
-
-
Total
-6.9%
-46.1%
-7.5%
23
Polymers and Fluids
Key Points
Total segment base revenues: -15.1% in Q2 ’09 vs. -16.9% in Q1
’09 as industrial production rates and MRO demand continued to
be under pressure in the second quarter
Worldwide Fluids: -15.9% in Q2 ’09 vs. -19.9% in Q1 ‘09
Intl: -11.2% in Q2 vs. -16.4% in Q1
NA: -22.9% in Q2 vs. -25.1% in Q1
Worldwide Polymers: -17.4% in Q2 ’09 vs. -18.0% in Q1 ‘09
Intl: -7.9% in Q2 vs. -15.4% in Q1
NA: -28.6% in Q2 vs. -21.5% in Q1
24
Decorative Surfaces
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
336.0
46.8
13.9%
2009 Q2
257.3
34.0
13.2%
$ F(U)
(78.7)
(12.8)
-0.7%
% F(U)
-23.4%
-27.2%
% F(U) Prior Year
Base Business
Operating Leverage
-16.0%
-45.8%
-4.9%
Changes in VM & OH costs
-
32.2%
5.3%
Total
-16.0%
-13.6%
0.4%
Acquisitions
-
-
-
Translation
-7.4%
-3.9%
0.5%
Impairment
-
-
-
Restructuring
-
-9.7%
-1.6%
Other
-
-
-
Total
-23.4%
-27.2%
-0.7%
Decorative Surfaces
Key Points
Total segment base revenues: -16.0% in Q2 ’09 vs. -17.1% in Q1
‘09
North America laminate Q2 base revenues: -20.0% in Q2 ’09 vs.
-18.6% in Q1 ‘09
Q2 laminate sales helped by larger commercial construction
exposure and success of premium priced high definition
laminate product line
International Q2 base revenues: -11.6% vs. -13.2% in Q1 ’09
French and Asian base business revenues were weak; U.K.
base business revenues outperformed
25
26
All Other
Quarterly Analysis
Operating
Operating
Operating
Revenues
Income
Margins
2008 Q2
833.8
166.7
20.0%
2009 Q2
681.8
90.0
13.2%
$ F(U)
(152.0)
(76.7)
-6.8%
% F(U)
-18.2%
-46.0%
% F(U) Prior Year
Base Business
Operating Leverage
-20.0%
-46.4%
-6.6%
Changes in VM & OH costs
-
14.2%
3.6%
Total
-20.0%
-32.2%
-3.0%
Acquisitions/Divestitures
8.6%
2.5%
-0.9%
Translation
-6.8%
-7.0%
-0.6%
Impairment
-
-
-
Restructuring
-
-9.3%
-2.3%
Other
-
-
-
Total
-18.2%
-46.0%
-6.8%
27
All Other
Key Points
Total segment base revenues: -20.0% in Q2 ’09 vs. -18.9% in Q1
’09
Q2 worldwide test and measurement base revenues: -15.3%
vs. -13.2% in Q1 ’09; weakening “cap ex” spending in North
America, Europe and Asia slowing sales
Q2 worldwide consumer packaging base revenues: -12.9% in
Q2 vs. -15.2% in Q1 ’09; Hi-Cone and Zip-Pak units had best
revenue performance in the quarter
Q2 worldwide finishing base revenues: -38.7% vs. -24.1% in Q1
’09 as industrial demand/ Cap Ex spending declined
Q2 worldwide industrial/appliance base revenues: -26.9% vs.
-27.8% in Q1 ‘09
28
ITW
3rd Quarter 2009 Forecast
Mid
Low
High
Point
3rd Quarter 2009 (versus 3rd Quarter 2008)
Total Revenues
-26%
-20%
-23%
Diluted Income per Share - Continuing
$0.39
$0.51
$0.45
% F(U) 3rd Quarter 2008
-56%
-43%
-49%
3rd Quarter 2009 (versus 2nd Quarter 2009)
Total Revenues
-2%
4%
1%
Diluted Income per Share - Continuing
$0.39
$0.51
$0.45
% F(U) 2nd Quarter 2009
8%
42%
25%
29
ITW 3rd Quarter 2009 Forecast
Key Assumptions
Exchange rates hold at current levels
Restructuring costs of $30 to $50 million
(versus $65 million in 2nd quarter 2009)
Net nonoperating expense, including interest
expense and other nonoperating income, of
$40 to $45 million (versus $64 million in 2nd
quarter 2009)
Tax rate range of 27.75% to 28.25% for the 3rd
quarter (versus effective tax rate of 34% in 2 nd
quarter 2009)
30
ITW Conference Call
Q & A
Second Quarter
2009
