| Document and Entity Information (USD $) | ||
| 3 Months Ended
Mar. 31, 2010 | Jun. 30, 2009
| |
| Document and Entity Information [Abstract] | ||
| Entity Registrant Name | ILLINOIS TOOL WORKS INC | |
| Entity Central Index Key | 0000049826 | |
| Document Type | 10-Q | |
| Document Period End Date | 2010-03-31 | |
| Amendment Flag | false | |
| Document Fiscal Year Focus | 2,010 | |
| Document Fiscal Period Focus | Q1 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Voluntary Filers | No | |
| Entity Current Reporting Status | Yes | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Public Float | $15,100,000,000 | |
| Entity Common Stock, Shares Outstanding | 502,485,456 |
| STATEMENT OF INCOME (UNAUDITED) (USD $) | ||
| In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| STATEMENT OF INCOME (UNAUDITED) [Abstract] | ||
| Operating Revenues | $3,606,389 | $3,146,379 |
| Cost of revenues | 2,320,752 | 2,152,827 |
| Selling, administrative, and research and development expenses | 748,604 | 761,691 |
| Amortization of intangible assets | 53,103 | 50,570 |
| Impairment of goodwill and other intangible assets | 89,997 | |
| Operating Income | 483,930 | 91,294 |
| Interest expense | (44,577) | (31,436) |
| Other income (expense) | 5,978 | (4,341) |
| Income from Continuing Operations Before Income Taxes | 445,331 | 55,517 |
| Income taxes | 151,000 | 63,533 |
| Income (Loss) from Continuing Operations | 294,331 | (8,016) |
| Loss from Discontinued Operations | (31,358) | |
| Net Income (Loss) | $294,331 | ($39,374) |
| Income (Loss) Per Share from Continuing Operations: | ||
| Basic | 0.59 | -0.02 |
| Diluted | 0.58 | -0.02 |
| Loss Per Share from Discontinued Operations: | ||
| Basic | -0.06 | |
| Diluted | -0.06 | |
| Net Income (Loss) Per Share: | ||
| Basic | 0.59 | -0.08 |
| Diluted | 0.58 | -0.08 |
| Cash Dividends: | ||
| Paid | 0.31 | 0.31 |
| Declared | 0.31 | 0.31 |
| Shares of Common Stock Outstanding During the Period: | ||
| Average | 502,424 | 499,189 |
| Average assuming dilution | 505,014 | 499,189 |
| STATEMENT OF FINANCIAL POSITION (UNAUDITED) (USD $) | ||
| In Thousands | Mar. 31, 2010
| Dec. 31, 2009
|
| Current Assets: | ||
| Cash and equivalents | $1,417,566 | $1,318,772 |
| Trade receivables | 2,450,438 | 2,491,492 |
| Inventories | 1,413,084 | 1,356,233 |
| Deferred income taxes | 229,049 | 231,858 |
| Prepaid expenses and other current assets | 282,214 | 276,240 |
| Total current assets | 5,792,351 | 5,674,595 |
| Plant and Equipment: | ||
| Land | 242,856 | 247,911 |
| Buildings and improvements | 1,535,445 | 1,589,534 |
| Machinery and equipment | 3,838,970 | 3,945,692 |
| Equipment leased to others | 179,204 | 182,485 |
| Construction in progress | 82,146 | 90,908 |
| Gross plant and equipment | 5,878,621 | 6,056,530 |
| Accumulated depreciation | (3,843,118) | (3,920,003) |
| Net plant and equipment | 2,035,503 | 2,136,527 |
| Investments | 445,707 | 451,293 |
| Goodwill | 4,742,039 | 4,860,732 |
| Intangible Assets | 1,677,346 | 1,723,417 |
| Deferred Income Taxes | 623,196 | 673,044 |
| Other Assets | 550,416 | 562,376 |
| Total Assets | 15,866,558 | 16,081,984 |
| Current Liabilities: | ||
| Short-term debt | 324,386 | 213,681 |
| Accounts payable | 696,293 | 689,572 |
| Accrued expenses | 1,282,647 | 1,359,394 |
| Cash dividends payable | 155,770 | 155,724 |
| Income taxes payable | 381,481 | 417,267 |
| Total current liabilities | 2,840,577 | 2,835,638 |
| Noncurrent Liabilities: | ||
| Long-term debt | 2,807,180 | 2,914,874 |
| Deferred income taxes | 187,056 | 207,677 |
| Other | 1,288,772 | 1,305,919 |
| Total noncurrent liabilities | 4,283,008 | 4,428,470 |
| Stockholders' Equity: | ||
| Common stock | 5,352 | 5,350 |
| Additional paid-in-capital | 288,687 | 270,985 |
| Income reinvested in the business | 9,660,300 | 9,521,740 |
| Common stock held in treasury | (1,390,594) | (1,390,594) |
| Accumulated other comprehensive income | 169,493 | 400,726 |
| Noncontrolling interest | 9,735 | 9,669 |
| Total stockholders' equity | 8,742,973 | 8,817,876 |
| Total Liabilities and Stockholders' Equity | $15,866,558 | $16,081,984 |
| STATEMENT OF CASH FLOWS (UNAUDITED) (USD $) | ||
| In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
| Cash Provided by (Used for) Operating Activities: | ||
| Net income (loss) | $294,331 | ($39,374) |
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
| Depreciation | 83,668 | 81,539 |
| Amortization and impairment of goodwill and other intangible assets | 53,103 | 140,567 |
| Change in deferred income taxes | 2,347 | (41,004) |
| Provision for uncollectible accounts | 2,745 | 3,917 |
| Loss on sale of plant and equipment | 359 | 976 |
| (Income) loss from investments | (3,130) | 5,737 |
| (Gain) loss on sale of operations and affiliates | (1,107) | 29,851 |
| Stock compensation expense | 12,420 | 11,637 |
| Other non-cash items, net | (848) | 2,912 |
| Change in assets and liabilities: | ||
| (Increase) decrease in trade receivables | (56,585) | 340,993 |
| (Increase) decrease in inventories | (102,657) | 194,363 |
| (Increase) decrease in prepaid expenses and other assets | (26,924) | (15,720) |
| Increase (decrease) in accounts payable | 38,015 | (154,526) |
| Increase (decrease) in accrued expenses and other liabilities | (5,426) | (100,577) |
| Increase (decrease) in income taxes | (12,002) | (23,649) |
| Increase (decrease) in other, net | 1,097 | 9,359 |
| Net cash provided by operating activities | 279,406 | 447,001 |
| Cash Provided by (Used for) Investing Activities: | ||
| Acquisition of businesses (excluding cash and equivalents) | (27,586) | (64,509) |
| Additions to plant and equipment | (60,722) | (63,936) |
| Purchases of investments | (798) | (12,354) |
| Proceeds from investments | 6,224 | 1,436 |
| Proceeds from sale of plant and equipment | 4,560 | 5,117 |
| Payments related to sale of operations and affiliates | (42) | (1,548) |
| Other, net | 6,789 | (489) |
| Net cash used for investing activities | (71,575) | (136,283) |
| Cash Provided by (Used for) Financing Activities: | ||
| Cash dividends paid | (155,724) | (154,726) |
| Issuance of common stock | 5,141 | 5,383 |
| Net proceeds (repayments) of debt with original maturities of three months or less | 111,817 | (1,341,911) |
| Proceeds from debt with original maturities of more than three months | 822 | 2,157,939 |
| Repayments of debt with original maturities of more than three months | (1,179) | (619,906) |
| Excess tax benefits from share-based compensation | 188 | 3 |
| Net cash provided by (used for) financing activities | (38,935) | 46,782 |
| Effect of Exchange Rate Changes on Cash and Equivalents | (70,102) | 20,649 |
| Cash and Equivalents: | ||
| Increase during the period | 98,794 | 378,149 |
| Beginning of period | 1,318,772 | 742,950 |
| End of period | 1,417,566 | 1,121,099 |
| Cash Paid During the Period for Interest | 6,609 | 24,184 |
| Cash Paid During the Period for Income Taxes | 148,870 | 74,204 |
| Liabilities Assumed from Acquisitions | $4,022 | $18,628 |
| FINANCIAL STATEMENTS | |
| 3 Months Ended
Mar. 31, 2010 | |
| FINANCIAL STATEMENTS [Abstract] | |
| FINANCIAL STATEMENTS | (1) FINANCIAL STATEMENTS The unaudited financial statements included herein have been prepared by Illinois Tool Works Inc. and Subsidiaries (the Company). In the opinion of management, the interim financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for interim periods. It is suggested that these financial statements be read in conjunction with the financial statements and notes to financial statements included in the Companys 2009 Annual Report on Form 10-K. Certain reclassifications of prior year data have been made to conform with current year reporting. |
| COMPREHENSIVE INCOME (LOSS) | |
| 3 Months Ended
Mar. 31, 2010 | |
| COMPREHENSIVE INCOME (LOSS) [Abstract] | |
| COMPREHENSIVE INCOME (LOSS) | (2) COMPREHENSIVE INCOME (LOSS) The components of comprehensive income (loss)in the periods presented were: Three Months Ended March 31 (In thousands) 2010 2009 Net Income (Loss) $ 294,331 $ (39,374 ) Other Comprehensive Income (Loss): Foreign currency translation adjustments (237,270 ) (122,988 ) Pension and other postretirement benefit adjustments, net of tax 6,037 (20 ) Comprehensive Income (Loss) $ 63,098 $ (162,382 ) |
| DISCONTINUED OPERATIONS | |
| 3 Months Ended
Mar. 31, 2010 | |
| DISCONTINUED OPERATIONS [Abstract] | |
| DISCONTINUED OPERATIONS | (3) DISCONTINUED OPERATIONS The Company periodically reviews its approximately 800 operations for businesses which may no longer be aligned with its long-term objectives. In August2008, the Companys Board of Directors authorized the divestiture of the Click Commerce industrial software business which was previously reported in the All Other segment. In the second quarter of 2009, the Company completed the sale of the Click Commerce business. In 2007, the Company classified an automotive components business as held for sale which was sold in the third quarter of 2009. Results of the discontinued operations for the first quarter of 2009 were as follows: Three Months Ended (In thousands) March 31, 2009 Operating revenues $ 13,627 Loss before taxes $ (33,812 ) Income tax benefit 2,454 Loss from discontinued operations $ (31,358 ) In the first quarter of 2009, the Company recorded a loss on the anticipated sale of the Click Commerce business of $30,000,000 to reflect the estimated selling price. |
| INCOME TAXES | |
| 3 Months Ended
Mar. 31, 2010 | |
| INCOME TAXES [Abstract] | |
| INCOME TAXES | (4) INCOME TAXES In March2010, the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act were signed into law. As a result, future tax deductions for retiree prescription drug coverage will be reduced by the amount of subsidies received starting in 2013. In the first quarter of 2010, the Company recorded a discrete charge of $21,881,000 for the impact of the health care reform legislation. In March of 2009, the Company incurred significant charges related to the impairment of goodwill and intangible assets of $89,997,000 that were mostly non-deductible and discrete tax items of $27,800,000 to record reserves on net operating loss carryforwards no longer expected to be utilized and other tax adjustments. The components of the effective tax rate for the period ended March31, 2010 and 2009 were as follows: March 31, 2010 March 31, 2009 Estimated annual effective tax rate 29.0 % 28.0 % Discrete tax adjustments 4.9 50.1 Goodwill and intangible asset impairment charges 36.3 Effective tax rate 33.9 % 114.4 % The Company and its subsidiaries file tax returns in the U.S. and various state, local and foreign jurisdictions. These tax returns are routinely audited by the tax authorities in these jurisdictions and a number of these audits are currently ongoing. The Company is litigating its dispute with the Australian Tax Office over the treatment of an intercompany financing transaction between the U.S. and Australia. The Company has recorded its best estimate of the exposure for this audit; however, it is reasonably possible that the Company will resolve the Australian financing issue within the next 12months and that the amount of the Companys unrecognized tax benefits may decrease by approximately $159,000,000. |
| INVENTORIES | |
| 3 Months Ended
Mar. 31, 2010 | |
| INVENTORIES [Abstract] | |
| INVENTORIES | (5) INVENTORIES Inventories at March31, 2010 and December31, 2009 were as follows: (In thousands) March 31, 2010 December 31, 2009 Raw material $ 447,172 $ 417,314 Work-in-process 144,866 137,463 Finished goods 821,046 801,456 $ 1,413,084 $ 1,356,233 |
| GOODWILL AND INTANGIBLE ASSETS | |
| 3 Months Ended
Mar. 31, 2010 | |
| GOODWILL AND INTANGIBLE ASSETS [Abstract] | |
| GOODWILL AND INTANGIBLE ASSETS | (6) GOODWILL AND INTANGIBLE ASSETS Goodwill represents the excess cost over fair value of the net assets of purchased businesses. The Company does not amortize goodwill and intangible assets that have indefinite lives. The Company performs an annual impairment assessment of goodwill and intangible assets with indefinite lives based on the estimated fair value of the related reporting unit or intangible asset. When performing its annual impairment assessment, the Company compares the estimated fair value of each of its 60 reporting units to its carrying value. Fair values are determined primarily by discounting estimated future cash flows based either on current operating cash flows or on a detailed cash flow forecast prepared by the relevant reporting unit. The Company also considers additional valuation techniques, such as market multiples from similar transactions and quoted market prices of relevant public companies. If the fair value of a reporting unit is less than its carrying value, an impairment loss, if any, is recorded for the difference between the implied fair value and the carrying value of the reporting units goodwill. During 2009, the Company changed the date of its annual goodwill impairment assessment from the first quarter to the third quarter. The Companys indefinite-lived intangibles consist of trademarks and brands. The estimated fair values of these intangibles are determined based on a relief-of-royalty income approach derived from internally forecasted revenues of the related products. If the fair value of the trademark or brand is less than its carrying value, an impairment loss is recorded for the difference between the estimated fair value and carrying value of the intangible asset. In the first quarter of 2009, the Company performed a goodwill impairment assessment which resulted in impairment charges of $60,000,000 related to the pressure sensitive adhesives reporting unit in the Polymers Fluids segment and $18,000,000 related to the PC board fabrication reporting unit in the Power Systems Electronics segment. Also in the first quarter of 2009, intangible asset impairments of $11,997,000 were recorded to reduce to the estimated fair value the carrying value of certain trademarks and brands. Approximately $5,800,000 of this total charge related to the PC board fabrication reporting unit and the remainder to various trademarks and brands of other reporting units. The impairments during 2009 were primarily related to new reporting units which had been acquired before the recent economic downturn. These charges were driven primarily by lower current forecasts compared to the expected forecasts at the time the reporting units were acquired. A summary of goodwill and indefinite-lived intangible assets that were adjusted to fair value and the related impairment charges included in earnings for the first quarter of 2009 were as follows: Total Impairment (In Thousands) Book Value Fair Value Charges Goodwill $ 353,000 $ 275,000 $ 78,000 Indefinite-lived intangible assets 94,973 82,976 11 |
| RETIREMENT PLANS AND POSTRETIREMENT BENEFITS | |
| 3 Months Ended
Mar. 31, 2010 | |
| RETIREMENT PLANS AND POSTRETIREMENT BENEFITS [Abstract] | |
| RETIREMENT PLANS AND POSTRETIREMENT BENEFITS | (7) RETIREMENT PLANS AND POSTRETIREMENT BENEFITS Pension and other postretirement benefit costs for the periods ended March31, 2010 and 2009 were as follows: Three Months Ended March 31 Other Postretirement Pension Benefits (In thousands) 2010 2009 2010 2009 Components of net periodic benefit cost: Service cost $ 23,491 $ 22,922 $ 3,485 $ 3,142 Interest cost 27,735 28,716 7,499 7,718 Expected return on plan assets (37,590 ) (37,376 ) (4,546 ) (3,403 ) Amortization of actuarial loss 6,533 1,889 10 64 Amortization of prior service cost (income) 197 (400 ) 1,611 1,606 Amortization of net transition amount 8 3 Net periodic benefit cost $ 20,374 $ 15,754 $ 8,059 $ 9,127 The Company expects to contribute $52,700,000 to its pension plans and $37,900,000 to its other postretirement plans in 2010. As of March31, 2010, contributions of $7,000,000 to pension plans and $9,400,000 to other postretirement plans have been made. |
| SHORT-TERM DEBT | |
| 3 Months Ended
Mar. 31, 2010 | |
| SHORT-TERM DEBT [Abstract] | |
| SHORT-TERM DEBT | (8) SHORT-TERM DEBT The Company had outstanding commercial paper of $250,493,000 at March31, 2010 and $135,498,000 at December31, 2009. |
| LONG-TERM DEBT | |
| 3 Months Ended
Mar. 31, 2010 | |
| LONG-TERM DEBT [Abstract] | |
| LONG-TERM DEBT | (9) LONG-TERM DEBT Based on rates for comparable instruments, the approximate fair value and related carrying value of the Companys long-term debt, including current maturities, were as follows: (In thousands) March 31, 2010 December 31, 2009 Fair value $ 3,084,265 $ 3,161,352 Carrying value 2,815,418 2,922,994 |
| SEGMENT INFORMATION | |
| 3 Months Ended
Mar. 31, 2010 | |
| SEGMENT INFORMATION [Abstract] | |
| SEGMENT INFORMATION | (10) SEGMENT INFORMATION See Managements Discussion and Analysis for information regarding operating revenues and operating income for the Companys segments. |
