Illinois Tool Works (ITW) 10-K 26 Feb 10 2009 FY Annual report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Document and Company Information [Abstract]
Entity Registrant Name	ILLINOIS TOOL WORKS INC
Entity Central Index Key	0000049826
Document Type	10-K
Document Period End Date	2009-12-31
Amendment Flag	false
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		502,408,086

Statement of Income

Statement of Income (USD $)
In Thousands, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statement of Income [Abstract]
Operating Revenues	$13,877,068	$17,100,341	$16,110,267
Cost of revenues	9,144,852	11,186,871	10,430,965
Selling, administrative, and research and development expenses	3,037,439	3,226,199	2,903,680
Amortization of intangible assets	203,230	184,410	145,702
Impairment of goodwill and other intangible assets	105,568	1,575	2,154
Operating Income	1,385,979	2,501,286	2,627,766
Interest expense	(164,839)	(154,458)	(102,095)
Other income (expense)	(7,350)	4,710	58,269
Income from Continuing Operations Before Income Taxes	1,213,790	2,351,538	2,583,940
Income taxes	244,300	660,445	756,249
Income from Continuing Operations	969,490	1,691,093	1,827,691
Income (Loss) from Discontinued Operations	(22,481)	(172,090)	42,171
Net Income	$947,009	$1,519,003	$1,869,862
Income Per Share from Continuing Operations:
Basic	1.94	3.26	3.31
Diluted	1.93	3.24	3.29
Income (Loss) Per Share from Discontinued Operations:
Basic	-0.04	-0.33	0.08
Diluted	-0.04	-0.33	0.08
Net Income Per Share:
Basic	1.89	2.93	3.39
Diluted	1.89	2.91	3.36

Statement of Income Reinvested

Statement of Income Reinvested in the Business (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statement of Income Reinvested in the Business [Abstract]
Beginning Balance	$9,196,465	$9,879,065	$10,406,511
Net income	947,009	1,519,003	1,869,862
Cash dividends declared	(620,679)	(604,988)	(533,519)
Retirement of treasury shares	0	(1,583,827)	(1,841,230)
Cumulative effect of adopting new accounting guidance, net of tax	(1,055)	(12,788)	(22,559)
Ending Balance	$9,521,740	$9,196,465	$9,879,065

Statement of Comprehensive Inco

Statement of Comprehensive Income (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Statement of Comprehensive Income [Abstract]
Net Income	$947,009	$1,519,003	$1,869,862
Other Comprehensive Income:
Foreign currency translation adjustments	716,208	(874,952)	424,037
Pension and other postretirement benefit adjustments, net of tax	(62,271)	(432,618)	180,110
Comprehensive Income	$1,600,946	$211,433	$2,474,009

Statement of Financial Position

Statement of Financial Position (USD $)
In Thousands	Dec. 31, 2009	Dec. 31, 2008
Current Assets:
Cash and equivalents	$1,318,772	$742,950
Trade receivables	2,491,492	2,571,987
Inventories	1,356,233	1,774,697
Deferred income taxes	231,858	206,496
Prepaid expenses and other current assets	276,240	375,778
Assets held for sale	0	82,071
Total current assets	5,674,595	5,753,979
Plant and Equipment:
Land	247,911	227,167
Buildings and improvements	1,589,534	1,457,732
Machinery and equipment	3,945,692	3,714,456
Equipment leased to others	182,485	164,504
Construction in progress	90,908	98,876
Gross plant and equipment	6,056,530	5,662,735
Accumulated depreciation	(3,920,003)	(3,553,303)
Net plant and equipment	2,136,527	2,109,432
Investments	451,293	465,894
Goodwill	4,860,732	4,517,550
Intangible Assets	1,723,417	1,779,669
Deferred Income Taxes	673,044	75,999
Other Assets	562,376	501,028
Total Assets	16,081,984	15,203,551
Current Liabilities:
Short-term debt	213,681	2,433,973
Accounts payable	689,572	683,991
Accrued expenses	1,359,394	1,315,106
Cash dividends payable	155,724	154,726
Income taxes payable	417,267	216,751
Liabilities held for sale	0	20,546
Total current liabilities	2,835,638	4,825,093
Noncurrent Liabilities:
Long-term debt	2,914,874	1,247,883
Deferred income taxes	207,677	125,089
Other	1,305,919	1,330,395
Total noncurrent liabilities	4,428,470	2,703,367
Common stock:
Issued-535,010,960 shares in 2009 and 531,789,730 shares in 2008	5,350	5,318
Additional paid-in-capital	270,985	105,497
Income reinvested in the business	9,521,740	9,196,465
Common stock held in treasury	(1,390,594)	(1,390,594)
Accumulated other comprehensive income	400,726	(253,211)
Noncontrolling interest	9,669	11,616
Total stockholders' equity	8,817,876	7,675,091
Total liabilities and stockholders' equity	$16,081,984	$15,203,551

1_Statement of Financial Positi

Statement of Financial Position (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Common stock:
Common stock, shares issued	535,010,960	531,789,730

Statement of Cash Flows

Statement of Cash Flows (USD $)
In Thousands	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash Provided by (Used for) Operating Activities:
Net income	$947,009	$1,519,003	$1,869,862
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	366,127	367,615	363,701
Amortization and impairment of goodwill and other intangible assets	308,798	324,292	161,043
Change in deferred income taxes	(477,582)	(97,807)	(5,522)
Provision for uncollectible accounts	16,191	15,405	5,998
Loss on sale of plant and equipment	1,856	4,245	743
Income from investments	(4,944)	(17,017)	(47,880)
(Gain) loss on sale of operations and affiliates	34,315	43,522	(34,807)
Stock compensation expense	51,858	41,686	30,471
Other non-cash items, net	(1,548)	2,731	(3,141)
Change in assets and liabilities:
(Increase) decrease in trade receivables	336,873	263,478	(56,971)
(Increase) decrease in inventories	572,679	(97,319)	(4,543)
(Increase) decrease in prepaid expenses and other assets	8,939	(76,146)	(15,676)
Increase (decrease) in accounts payable	(84,526)	(191,856)	(37,823)
Increase (decrease) in accrued expenses and other liabilities	(256,171)	(21,141)	(2,301)
Increase (decrease) in income taxes receivable and payable	324,231	147,660	260,427
Increase (decrease) in other, net	2,484	(6,127)	716
Net cash provided by operating activities	2,146,589	2,222,224	2,484,297
Cash Provided by (Used for) Investing Activities:
Acquisition of businesses (excluding cash and equivalents) and additional interest in affiliates	(281,674)	(1,546,982)	(812,757)
Additions to plant and equipment	(247,102)	(362,312)	(353,355)
Purchases of investments	(17,586)	(19,583)	(28,734)
Proceeds from investments	20,215	26,932	91,184
Proceeds from sale of plant and equipment	28,590	23,393	21,821
Proceeds from sale of operations and affiliates	17,259	106,053	160,457
Other, net	(23,824)	9,182	(2,664)
Net cash used for investing activities	(504,122)	(1,763,317)	(924,048)
Cash Provided by (Used for) Financing Activities:
Cash dividends paid	(619,681)	(598,690)	(502,430)
Issuance of common stock	101,733	56,189	116,665
Repurchases of common stock	0	(1,390,594)	(1,757,761)
Net proceeds (repayments) of debt with original maturities of three months or less	(1,610,262)	1,510,374	(266,968)
Proceeds from debt with original maturities of more than three months	2,159,140	118,662	1,062,108
Repayments of debt with original maturities of more than three months	(1,285,348)	(161,423)	(17,754)
Excess tax benefits from share-based compensation	4,051	4,003	16,212
Repayment of preferred stock of subsidiary	0	0	(40,000)
Net cash used for financing activities	(1,250,367)	(461,479)	(1,389,928)
Effect of Exchange Rate Changes on Cash and Equivalents	183,722	(82,002)	66,996
Cash and Equivalents:
Increase (decrease) during the year	575,822	(84,574)	237,317
Beginning of year	742,950	827,524	590,207
End of year	1,318,772	742,950	827,524
Cash Paid During the Year for Interest	153,971	157,175	132,757
Cash Paid During the Year for Income Taxes, Net of Refunds	364,383	619,885	448,102
Liabilities Assumed from Acquisitions	$57,863	$577,035	$465,303

Nature of Operations

Nature of Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Nature of Operations [Abstract]
Nature of Operations	Nature of Operations The Notes to Financial Statements furnish additional information on items in the financial statements. The notes have been arranged in the same order as the related items appear in the statements. Illinois Tool Works Inc. (the Company or ITW) is a multinational manufacturer of a diversified range of industrial products and equipment with approximately 840 operations in 57 countries. The Company primarily serves the construction, general industrial, automotive and food institutional/restaurant markets. The preparation of the Companys financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to financial statements. Actual results could differ from those estimates. The significant estimates included in the preparation of the financial statements are related to inventories, trade receivables, plant and equipment, income taxes, goodwill and intangible assets, product liability matters, litigation, product warranties, pensions, other postretirement benefits, environmental matters and stock options.

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Significant Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Significant accounting principles and policies of the Company are in italics. Certain reclassifications of prior years data have been made to conform to current year reporting.

Consolidation and Translation

Consolidation and Translation
	12 Months Ended Dec. 31, 2009 USD / shares
Consolidation and Translation [Abstract]
Consolidation and Translation	Consolidation and Translation Consolidation and Translation The financial statements include the Company and substantially all of its majority-owned subsidiaries. All significant intercompany transactions are eliminated from the financial statements. Substantially all of the Companys foreign subsidiaries outside North America have November 30 fiscal year-ends to facilitate inclusion of their financial statements in the December 31 consolidated financial statements. Foreign subsidiaries assets and liabilities are translated to U.S.dollars at end-of-period exchange rates. Revenues and expenses are translated at average rates for the period. Translation adjustments are reported as a component of accumulated other comprehensive income in stockholders equity.

Discontinued Operations

Discontinued Operations
	12 Months Ended Dec. 31, 2009 USD / shares
Discontinued Operations [Abstract]
Discontinued Operations	Discontinued Operations Discontinued Operations The Company periodically reviews its 840 operations for businesses which may no longer be aligned with its long-term objectives. In August 2008, 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 divested an automotive machinery business and a consumer packaging business. In the fourth quarter of 2007, the Company classified an automotive components business and a second consumer packaging business as held for sale. The consumer packaging business was sold in 2008. The Company completed the sale of the automotive components business in the third quarter of 2009. In May 2009, the Companys Board of Directors rescinded a resolution from August 2008 to divest the Decorative Surfaces segment. The consolidated financial statements and related notes for all periods have been restated to present the results related to the Decorative Surfaces segment as continuing operations. Results of the discontinued operations for the years ended December31, 2009, 2008 and 2007 were as follows: In Thousands 2009 2008 2007 Operating revenues $ 26,498 $ 117,553 $ 168,597 Income (loss) before taxes $ (33,678 ) $ (171,629 ) $ 35,928 Income tax (expense) benefit 11,197 (461 ) 6,243 Income (loss) from discontinued operations $ (22,481 ) $ (172,090 ) $ 42,171 In 2009, income (loss) before taxes includes losses on disposals of $27,665,000 on the Click Commerce and automotive components businesses. In 2008, income (loss) before taxes includes goodwill impairment charges of $132,563,000 related to the Click Commerce business and losses on anticipated sale of $64,000,000 related to the Click Commerce and the automotive components businesses. Also included are gains on disposals of $19,942,000, primarily related to the completed divestiture of a consumer packaging business. In 2007, income (loss) before taxes includes gains on disposals of $33,168,000 related to the completed divestitures of an automotive machinery business and a consumer packaging business. As of December31, 2008, the assets and liabilities of the Click Commerce business and a certain automotive components business were included in assets and liabilities held for sale. The total assets and liabilities held for sale as of December31, 2008 were as follows: In Thousands 2008 Trade receivables $ 18,122 Inventories 2,369 Net plant and equipment 11,308 Net goodwill and intangible assets 108,405 Other 5,867 Loss reserve on assets held for sale (64,000 ) Total assets held for sale $ 82

Acquisitions

Acquisitions
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions [Abstract]
Acquisitions	Acquisitions Acquisitions The Company accounts for acquisitions under the acquisition method, in which assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. The operating results of the acquired companies are included in the Companys consolidated financial statements from the date of acquisition. Acquisitions, individually and in the aggregate, did not materially affect the Companys results of operations or financial position for all periods presented. Summarized information related to acquisitions is as follows: In Thousands except number of acquisitions 2009 2008 2007 Number of acquisitions 20 50 52 Net cash paid during the year $ 281,674 $ 1,546,982 $ 812,757 The premium over tangible net assets recorded for acquisitions based on purchase price allocations during 2009, 2008 and 2007 were as follows: 2009 2008 2007 Weighted- Weighted- Weighted- Average Premium Average Premium Average Premium In Thousands except for weighted-average lives (years) Life Recorded Life Recorded Life Recorded Goodwill $ 94,694 $ 675,356 $ 396,704 Amortizable intangible assets: Customer lists and relationships 10.6 44,416 12.6 416,904 10.6 182,942 Patents and proprietary technology 12.2 33,812 12.7 111,593 8.7 64,033 Trademarks and brands 13.3 21,385 16.0 140,158 16.8 52,771 Noncompete agreements 6.8 7,021 3.2 25,637 3.9 12,362 Other 4.4 6,909 2.3 15,326 4.3 16,997 Total amortizable intangible assets 10.9 113,543 12.7 709,618 10.6 329,105 Indefinite-lived intangible assets: Trademarks and brands 13,218 39,488 28,426 Total premium recorded $ 221,455 $ 1,424,462 $ 754,235 Of the total goodwill recorded for acquisitions, the Company expects goodwill of $71,529,000 in 2009, $83,694,000 in 2008, and $104,276,000 in 2007 will be tax deductible. On January1, 2009, the Company adopted new accounting guidance related to business combinations. The new accounting guidance requires an entity to recognize assets acquired, liabili

Operating Revenues

Operating Revenues
	12 Months Ended Dec. 31, 2009 USD / shares
Operating Revenues [Abstract]
Operating Revenues	Operating Revenues Operating Revenues are recognized when the risks and rewards of ownership are transferred to the customer, which is generally at the time of product shipment. No single customer accounted for more than 5% of consolidated revenues in 2009, 2008 or 2007.

Research and Development Expens

Research and Development Expenses
	12 Months Ended Dec. 31, 2009 USD / shares
Research and Development Expenses [Abstract]
Research and Development Expenses	Research and Development Expenses Research and Development Expenses are recorded as expense in the year incurred. These costs were $198,536,000 in 2009, $212,658,000 in 2008 and $197,595,000 in 2007.

Rental Expense

Rental Expense
	12 Months Ended Dec. 31, 2009 USD / shares
Rental Expense [Abstract]
Rental Expense	Rental Expense Rental Expense was $175,092,000 in 2009, $161,810,000 in 2008 and $145,353,000 in 2007. Future minimum lease payments for the years ending December 31 are as follows: In Thousands 2010 $ 150,881 2011 106,430 2012 75,920 2013 56,747 2014 43,864 2015 and future years 68,249 $ 502,091

Advertising Expenses

Advertising Expenses
	12 Months Ended Dec. 31, 2009 USD / shares
Advertising Expenses [Abstract]
Advertising Expenses	Advertising Expenses Advertising Expenses are recorded as expense in the year incurred. These costs were $79,259,000 in 2009, $107,395,000 in 2008 and $113,026,000 in 2007.

Other Income

Other Income (Expense)
	12 Months Ended Dec. 31, 2009 USD / shares
Other Income (Expense) [Abstract]
Other Income (Expense)	Other Income (Expense) Other Income (Expense) consisted of the following: In Thousands 2009 2008 2007 Interest income $ 17,551 $ 29,392 $ 19,975 Investment income 4,944 17,017 47,880 Losses on foreign currency transactions (24,948 ) (1,407 ) (14,180 ) German transfer tax settlement (44,002 ) Other, net (4,897 ) 3,710 4,594 $ (7,350 ) $ 4,710 $ 58,269

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	Income Taxes Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Deferred income taxes are determined based on the estimated future tax effects of differences between the financial and tax bases of assets and liabilities given the provisions of the enacted tax laws. The components of the provision for income taxes were as shown below: In Thousands 2009 2008 2007 U.S. Federal income taxes: Current $ 229,929 $ 329,200 $ 435,013 Deferred (13,861 ) (8,866 ) 57,397 Benefit of net operating loss and foreign tax credits carryforwards (86,022 ) (2,212 ) $ 130,046 $ 320,334 $ 490,198 Foreign income taxes: Current $ 369,766 $ 285,476 $ 262,163 Deferred (235,341 ) 6,189 (22,487 ) Benefit of net operating loss carryforwards (32,910 ) (1,532 ) (22,128 ) $ 101,515 $ 290,133 $ 217,548 State income taxes: Current $ 42,182 $ 78,285 $ 46,210 Deferred (25,500 ) (28,307 ) 2,293 Benefit of net operating loss carryforwards (3,943 ) $ 12,739 $ 49,978 $ 48,503 $ 244,300 $ 660,445 $ 756,249 Income from continuing operations before income taxes for domestic and foreign operations was as follows: In Thousands 2009 2008 2007 Domestic $ 499,654 $ 1,198,006 $ 1,646,964 Foreign 714,136 1,153,532 936,976 $ 1,213,790 $ 2,351,538 $ 2,583,940 The reconciliation between the U.S.Federal statutory tax rate and the effective tax rate was as follows: 2009 2008 2007 U.S. Federal statutory tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of U.S. Federal tax benefit 0.8 1.6 1.5 Nondeductible goodwill impairment 2.5 Differences between U.S. Federal statutory and foreign tax rates (3.3 ) (3.2 ) (1.7 ) Nontaxable foreign interest income (4.6 ) (3.1 ) (2.7 ) Foreign tax credit related to a global legal structure reorganization (7.0 ) German tax audit settlement (4.7 ) Tax effect of

Income from Continuing Operatio

Income from Continuing Operations Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Income from Continuing Operations Per Share [Abstract]
Income from Continuing Operations Per Share	Income from Continuing Operations Per Share Income from Continuing Operations Per Share is computed by dividing income from continuing operations by the weighted-average number of shares outstanding for the period. Income from continuing operations per diluted share is computed by dividing income from continuing operations by the weighted-average number of shares assuming dilution for stock options and restricted stock. Dilutive shares reflect the potential additional shares that would be outstanding if the dilutive stock options outstanding were exercised and the unvested restricted stock vested during the period. The computation of income from continuing operations per share was as follows: In Thousands except per share amounts 2009 2008 2007 Income from continuing operations $ 969,490 $ 1,691,093 $ 1,827,691 Income from continuing operations per share Basic: Weighted-average common shares 500,177 518,609 551,549 Income from continuing operations per share Basic $ 1.94 $ 3.26 $ 3.31 Income from continuing operations per share Diluted: Weighted-average common shares 500,177 518,609 551,549 Effect of dilutive stock options and restricted stock 1,744 2,604 4,481 Weighted-average common shares assuming dilution 501,921 521,213 556,030 Income from continuing operations per share Diluted $ 1.93 $ 3.24 $ 3.29 Options that were considered antidilutive were not included in the computation of diluted income from continuing operations per share. The antidilutive options outstanding as of December31, 2009, 2008 and 2007 were 14,581,559, 11,729,898 and 3,658,862, respectively.

Cash and Equivalents

Cash and Equivalents
	12 Months Ended Dec. 31, 2009 USD / shares
Cash and Equivalents [Abstract]
Cash and Equivalents	Cash and Equivalents Cash and Equivalents included interest-bearing instruments of $791,010,000 at December31, 2009 and $339,901,000 at December31, 2008. Interest-bearing instruments have maturities of 90days or less and are stated at cost, which approximates market.

Trade Receivables

Trade Receivables
	12 Months Ended Dec. 31, 2009 USD / shares
Trade Receivables [Abstract]
Trade Receivables	Trade Receivables Trade Receivables were net of allowances for uncollectible accounts. The changes in the allowances for uncollectible accounts during 2009, 2008 and 2007 were as follows: In Thousands 2009 2008 2007 Beginning balance $ (75,965 ) $ (74,816 ) $ (61,649 ) Provision charged to expense (16,191 ) (15,405 ) (5,998 ) Write-offs, net of recoveries 25,250 11,526 10,156 Acquisitions and divestitures (2,327 ) (9,898 ) (12,886 ) Foreign currency translation (8,602 ) 9,599 (4,929 ) Transfer to assets held for sale 699 381 Other (31 ) 2,330 109 Ending balance $ (77,866 ) $ (75,965 ) $ (74,816 )

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories [Abstract]
Inventories	Inventories Inventories at December31, 2009 and 2008 were as follows: In Thousands 2009 2008 Raw material $ 417,314 $ 612,190 Work-in-process 137,463 174,607 Finished goods 801,456 987,900 $ 1,356,233 $ 1,774,697 Inventories are stated at the lower of cost or market and include material, labor and factory overhead. The last-in, first-out (LIFO) method is used to determine the cost of the inventories of approximately half of the U.S.operations. Inventories priced at LIFO were 22% and 25% of total inventories as of December31, 2009 and 2008, respectively. The first-in, first-out (FIFO) method, which approximates current cost, is used for all other inventories. If the FIFO method was used for all inventories, total inventories would have been approximately $115,090,000 and $159,721,000 higher than reported at December31, 2009 and 2008, respectively.

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Prepaid Expenses and Other Current Assets [Abstract]
Prepaid Expenses and Other Current Assets	Prepaid Expenses and Other Current Assets Prepaid Expenses and Other Current Assets as of December31, 2009 and 2008 were as follows: In Thousands 2009 2008 Value-added-tax receivables $ 47,568 $ 45,598 Insurance 31,052 30,215 Vendor advances 30,712 25,485 Income tax refunds receivable 16,222 142,179 Other 150,686 132,301 $ 276,240 $ 375,778

Plant and Equipment

Plant and Equipment
	12 Months Ended Dec. 31, 2009 USD / shares
Plant and Equipment [Abstract]
Plant and Equipment	Plant and Equipment Plant and Equipment are stated at cost less accumulated depreciation. Renewals and improvements that increase the useful life of plant and equipment are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation was $365,372,000 in 2009, $366,711,000 in 2008 and $359,076,000 in 2007, and was reflected primarily in cost of revenues. Discontinued operations depreciation was $755,000 in 2009, $904,000 in 2008 and $4,625,000 in 2007 and was reflected in income (loss) from discontinued operations. Depreciation of plant and equipment for financial reporting purposes is computed on an accelerated basis for U.S.businesses and on a straight-line basis for a majority of the international businesses. The range of useful lives used to depreciate plant and equipment is as follows: Buildings and improvements 10 50years Machinery and equipment 3 20years Equipment leased to others Term of lease

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Investments [Abstract]
Investments	Investments Investments as of December31, 2009 and 2008 consisted of the following: In Thousands 2009 2008 Leases of equipment $ 271,725 $ 265,278 Affordable housing limited partnerships 59,986 79,161 Venture capital limited partnership 59,046 69,053 Properties held for sale 35,908 28,876 Property developments 24,628 23,526 $ 451,293 $ 465,894 Leases of Equipment The components of the investment in leases of equipment at December31, 2009 and 2008 were as shown below: In Thousands 2009 2008 Leveraged, direct financing and sales-type leases: Gross lease contracts receivable, net of nonrecourse debt service $ 145,738 $ 145,842 Estimated residual value of leased assets 247,512 247,512 Unearned income (131,385 ) (139,020 ) 261,865 254,334 Equipment under operating leases 9,860 10,944 $ 271,725 $ 265,278 Deferred tax liabilities related to leveraged and direct financing leases were $54,707,000 and $110,079,000 at December31, 2009 and 2008, respectively. The investment in leases of equipment at December31, 2009 and 2008 relates to the following types of equipment: In Thousands 2009 2008 Telecommunications $ 172,011 $ 168,252 Air traffic control 62,856 58,997 Aircraft 36,520 37,603 Manufacturing 338 426 $ 271,725 $ 265,278 In 2003, the Company entered into a leveraged lease transaction related to air traffic control equipment in Australia with a cash investment of $48,763,000. In 2002, the Company entered into leveraged leasing transactions related to mobile telecommunications equipment with two major European telecommunications companies with a cash investment of $144,676,000. Under the terms of the telecommunications and air traffic control lease transactions, the lessees have made upfront payments to third-party financial institutions that are acting as payment undertakers. These payment undertakers are obligated to make the required scheduled payments directly to the nonrecourse debt holders and to the lessors, including the Company. In the event of default by the lessees, the Company has the right to recover its net investment from the payment undertakers. In addition, the lessees are required to purchase residual value insurance from a creditworthy third party at a date near the end of the lease term. Income from leveraged, direct financing and sales-type leases was $7,636,000 for the year ended December31, 2009. Expense from leveraged, direct financing and sales-type leases was $10,158,000 for the year ended December31, 2008. Inco

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Intangible Assets [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets 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. On January1, 2009, the Company adopted new accounting guidance on fair value measurements for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value on a nonrecurring basis. The new accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and provides guidance for measuring fair value and the necessary disclosures. 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. 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. Amortization and impairment of goodwill and other intangible assets for the years ended December31, 2009, 2008 and 2007 were as follows: In Thousands 2009 2008 2007 Goodwill: Impairment $ 90,000 $ 137 $ 988 Intangible Assets: Amortization 203,230 184,410 145,702 Impairment 15,568 1,438 1,166 $ 308,798 $ 185,985 $ 147,856 Income (loss) from discontinued operations included goodwill impairment charges of $132,563,000 in 2008 and amortization of $5,744,000 in 2008 and $13,187,000 in 2007. In the first quarter of 2009, the Company performed its annual goodwill impairment assessment which resulted in impairment charges of $60,000,000 related to the pressure sensitive adhesives reporting unit in the Polymers Fluids segmen

Other Assets

Other Assets
	12 Months Ended Dec. 31, 2009 USD / shares
Other Assets [Abstract]
Other Assets	Other Assets Other Assets as of December31, 2009 and 2008 consisted of the following: In Thousands 2009 2008 Cash surrender value of life insurance policies $ 340,294 $ 313,028 Customer tooling 69,964 56,331 Noncurrent receivables 40,679 40,048 Prepaid pension assets 15,907 9,909 Other 95,532 81,712 $ 562,376 $ 501,028

Pension and Other Postretiremen

Pension and Other Postretirement Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Pension and Other Postretirement Benefits [Abstract]
Pension and Other Postretirement Benefits	Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits The Company has both funded and unfunded defined benefit pension and other postretirement benefit plans, predominately in the U.S.covering a majority of U.S.employees. The U.S.primary pension plan provides benefits based on years of service and final average salary. In addition to pension benefits, the Company sponsors defined contribution retirement plans covering the majority of its U.S.employees. The Company has various defined benefit pension plans in certain foreign countries, mainly the United Kingdom, Germany, Canada and Australia. The U.S.primary postretirement health care plan is contributory with the participants contributions adjusted annually. The U.S.primary postretirement life insurance plan is noncontributory. Beginning January1, 2007, the U.S.primary pension and other postretirement benefit plans were closed to new participants. Newly hired employees and employees from acquired businesses that are not participating in these plans are eligible for additional Company contributions under the existing U.S.primary defined contribution retirement plans. On January1, 2008, the Company adopted new accounting guidance which required the Company to change the measurement date of its defined benefit plans to correspond with the Companys fiscal year end. The Company previously used a September 30 measurement date. As allowed under the provisions of this new guidance, the Company elected to remeasure its plan assets and benefit obligation as of the beginning of the fiscal year. Upon adoption, the Company recorded an after-tax charge of $12,788,000 to beginning retained earnings and an after-tax gain to accumulated other comprehensive income of $3,573,000 related to the three months ended December31, 2007. The Companys expense related to defined contribution plans was $66,000,000 in 2009, $66,700,000 in 2008 and $60,100,000 in 2007. Summarized information regarding the Companys significant defined benefit pension and other postretirement benefit plans is as follows: Other Postretirement Pension Benefits In Thousands 2009 2008 2007 2009 2008 2007 Components of net periodic benefit cost: Service cost $ 97,805 $ 110,381 $ 115,009 $ 12,567 $ 14,340 $ 14,957 Interest cost 119,855 119,436 106,670 30,506 32,615 32,133 Expected return on plan assets (153,974 ) (167,391 ) (156,058 ) (13,612 ) (15,391 ) (11,594 ) Amortization of actuarial (gain) loss 8,408 2,543 20,146 40 (914 ) 1,989 Amortization of prior service (income) cost (1,587 ) (2,420 ) (2,382 ) 6,423 6,261 6,261 Amortization of transition amount 163

Short-Term Debt

Short-Term Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Short-Term Debt [Abstract]
Short-Term Debt	Short-Term Debt Short-Term Debt as of December31, 2009 and 2008 consisted of the following: In Thousands 2009 2008 Bank overdrafts $ 36,069 $ 53,592 Commercial paper 135,498 1,820,423 Current maturities of long-term debt 8,120 509,923 Other borrowings 33,994 50,035 $ 213,681 $ 2,433,973 The weighted-average interest rate on commercial paper was 0.1% at December31, 2009 and 1.4% at December31, 2008. In June 2009, the Company entered into a $2,000,000,000 line of credit agreement with a termination date of June11, 2010 which replaced the prior line of credit. This amount, along with the revolving credit facility discussed in the Long-Term Debt note, support the issuance of commercial paper. No amount was outstanding under the facility at December31, 2009. The weighted-average interest rate on other borrowings was 4.1% at December31, 2009 and 1.7% at December31, 2008. As of December31, 2009, the Company had unused capacity of approximately $370,000,000 under international debt facilities.

Accrued Expenses

Accrued Expenses
	12 Months Ended Dec. 31, 2009 USD / shares
Accrued Expenses [Abstract]
Accrued Expenses	Accrued Expenses Accrued Expenses as of December31, 2009 and 2008 consisted of accruals for: In Thousands 2009 2008 Compensation and employee benefits $ 504,808 $ 464,504 Deferred revenue and customer deposits 233,281 231,960 Rebates 115,009 123,782 Warranties 63,028 65,961 Current portion of pension and other postretirement benefit obligations 26,827 28,496 Other 416,441 400,403 $ 1,359,394 $ 1,315,106 The Company accrues for product warranties based on historical experience. The changes in accrued warranties during 2009, 2008 and 2007 were as follows: In Thousands 2009 2008 2007 Beginning balance $ 65,961 $ 71,210 $ 70,119 Charges (44,190 ) (50,657 ) (51,443 ) Provision charged to expense 35,596 45,276 47,636 Acquisitions and divestitures 1,711 4,430 2,848 Foreign currency translation 3,950 (4,298 ) 2,050 Ending balance $ 63,028 $ 65,961 $ 71,210

Long-Term Debt

Long-Term Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Long-Term Debt [Abstract]
Long-Term Debt	Long-Term Debt Long-Term Debt at December31, 2009 and 2008 consisted of the following: In Thousands 2009 2008 5.75%notes due March1, 2009 $ $ 501,812 6.55% preferred debt securities due December31, 2011 249,902 249,857 5.15%notes due April1, 2014 799,447 5.25% Euro notes due October1, 2014 1,125,241 951,545 6.25%notes due April1, 2019 699,894 4.88%senior notes due thru December31, 2020 27,667 33,346 Other borrowings 20,843 21,246 2,922,994 1,757,806 Current maturities (8,120 ) (509,923 ) $ 2,914,874 $ 1,247,883 In 1999, the Company issued $500,000,000 of 5.75% redeemable notes due March1, 2009. These notes were repaid at maturity. In 2002, a subsidiary of the Company issued $250,000,000 of 6.55% preferred debt securities at 99.849% of face value. The effective interest rate of the preferred debt securities is 6.7%. In 2005, the Company issued $53,735,000 of 4.88%senior notes at 100% of face value. In 2007, the Company, through its wholly-owned subsidiary ITW Finance Europe S.A., issued 750,000,000 of 5.25% Euro notes due October1, 2014, at 99.874% of face value. The effective interest rate of the notes is 5.3%. In 2009, the Company issued $800,000,000 of 5.15% redeemable notes due April1, 2014 at 99.92% of face value and $700,000,000 of 6.25% redeemable notes due April1, 2019 at 99.98% of face value. The effective interest rates of the notes are 5.2% and 6.3%, respectively. Other debt outstanding at December31, 2009, bears interest at rates ranging from 0.3% to 13.5%, with maturities through the year 2029. Based on rates for comparable instruments, the approximate fair value and related carrying value of the Companys long-term debt, including current maturities as of December31, 2009 and 2008 were as follows: 2009 2008 In Thousands Fair Value Carrying Value Fair Value Carrying Value 5.75%notes due March1, 2009 $ $ $ 503,550 $ 501,812 6.55% preferred debt securities due December31, 2011 267,500 249,902 269,598 249,857 5.15%notes due April1, 2014 870,176 799,447 5.25% Euro notes due October1, 2014 1,192,860 1,125,241 856,355 951,545 6.25%notes due April1, 2019 781,158 699,894 4.88%senior notes due thru December31, 2020 28,815 27,667 31,555 33,346 Other borrowings 20,843 20,843 21,246 21,246 $ 3,161,352 $ 2,922,994 $ 1,682,304 $ 1,757,806 In 2007, the Company e

Other Noncurrent Liabilities

Other Noncurrent Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Other Noncurrent Liabilities [Abstract]
Other Noncurrent Liabilities	Other Noncurrent Liabilities Other Noncurrent Liabilities at December31, 2009 and 2008 consisted of the following: In Thousands 2009 2008 Pension benefit obligation $ 450,918 $ 499,269 Postretirement benefit obligation 267,800 285,824 Noncurrent tax reserves 197,957 193,560 Other 389,244 351,742 $ 1,305,919 $ 1,330,395

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments and Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, including those involving environmental, product liability (including toxic tort) and general liability claims. The Company accrues for such liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, the Companys estimates of the outcomes of these matters and its experience in contesting, litigating and settling other similar matters. The Company believes resolution of these matters, individually and in the aggregate, will not have a material adverse effect on the Companys financial position, liquidity or future operations. Among the toxic tort cases in which the Company is a defendant, the Company as well as its subsidiaries Hobart Brothers Company and Miller Electric Mfg. Co., have been named, along with numerous other defendants, in lawsuits alleging injury from exposure to welding consumables. The plaintiffs in these suits claim unspecified damages for injuries resulting from the plaintiffs alleged exposure to asbestos, manganese and/or toxic fumes in connection with the welding process. Based upon the Companys experience in defending these claims, the Company believes that the resolution of these proceedings will not have a material adverse effect on the Companys financial position, liquidity or future operations. The Company has not recorded any significant reserves related to these cases.

Stockholders Equity

Stockholders Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity [Abstract]
Stockholders' Equity	Stockholder Equity Preferred Stock, without par value, of which 300,000shares are authorized, is issuable in series. The Board of Directors is authorized to fix by resolution the designation and characteristics of each series of preferred stock. The Company has no present commitment to issue its preferred stock. Common Stock, with a par value of $.01, Additional Paid-In-Capital and Common Stock Held in Treasury transactions during 2009, 2008 and 2007 are shown below. Additional Common Stock Paid-In-Capital Common Stock Held in Treasury In Thousands except shares Shares Amount Amount Shares Amount Balance, December31, 2006 630,900,742 $ 6,309 $ 1,378,587 (72,151,184 ) $ (3,220,538 ) During 2007 Retirement of treasury shares (72,151,184 ) (721 ) (1,378,587 ) 72,151,184 3,220,538 Shares issued for stock options 3,768,417 37 116,736 Shares surrendered on exercise of stock options (1,950 ) (108 ) Shares issued for stock compensation 6,001 310 Stock compensation expense 30,471 Tax benefits related to stock options 16,212 Tax benefits related to defined contribution plans 9,989 Repurchases of common stock (32,425,297 ) (1,757,761 ) Balance, December31, 2007 562,522,026 5,625 173,610 (32,425,297 ) (1,757,761 ) During 2008 Retirement of treasury shares (32,425,297 ) (324 ) (173,610 ) 32,425,297 1,757,761 Shares issued for stock options 1,669,780 17 54,972 Shares issued for stock compensation 23,221 1,201 Stock compensation expense 41,686 Tax benefits related to stock options 4,844 Tax benefits related to defined contribution plans 2,794 Repurchases of common stock (32,674,759 ) (1,390,594 ) Balance, December31, 2008 531,789,730 5,318 105,497 (32,674,759 ) (1,390,594 ) During 2009 Shares issued for stock options 3,204,212 32 101,581

Noncontrolling Interest

Noncontrolling Interest
	12 Months Ended Dec. 31, 2009 USD / shares
Noncontrolling Interest [Abstract]
Noncontrolling Interest	Noncontrollng Interest Noncontrolling Interest On January1, 2009, the Company adopted new accounting guidance on noncontrolling interests. Upon adoption, the Company reclassified noncontrolling interest from noncurrent liabilities to stockholders equity. The financial statements for all periods presented have been restated to reflect noncontrolling interest as a component of equity. The noncontrolling interest balance was $9,669,000 and $11,616,000 at December31, 2009 and 2008, respectively.

Stock-Based Compensation

Stock-Based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Stock-Based Compensation [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock-Based Compensation Stock options and restricted stock units have been issued to officers and other management employees under ITWs 2006 Stock Incentive Plan (the Plan). The stock options generally vest over a four-year period and have a maturity of ten years from the issuance date. The fair value of restricted stock units is determined by reducing the closing market price on the date of grant by the present value of projected dividends over the vesting period. Restricted stock units generally vest after a three-year period. To cover the exercise of vested options and non-restricted common stock awards, the Company generally issues new shares from its authorized but unissued share pool. At December31, 2009, 59,671,644shares of ITW common stock were reserved for issuance under this Plan. Option exercise prices are equal to the common stock fair market value on the date of grant. The Company records compensation expense for the fair value of stock awards over the remaining service periods of those awards. The following summarizes the Companys stock-based compensation expense: In Thousands 2009 2008 2007 Pre-tax compensation expense $ 51,858 $ 41,612 $ 30,438 Tax benefit (15,565 ) (12,536 ) (8,674 ) Total stock-based compensation recorded as expense, net of tax $ 36,293 $ 29,076 $ 21,764 The following table summarizes activity related to non-vested equity awards during 2009: Weighted- Average Number of Grant-Date Shares Fair Value Unvested Restricted Stock Units: Unvested, January1, 2009 $ Granted 1,128,202 31.39 Vested (14,898 ) 31.40 Cancelled (28,927 ) 31.38 Unvested, December31, 2009 1,084,377 31.39 Unvested Stock Options: Unvested, January1, 2009 7,316,227 $ 13.55 Granted 2,189,614 10.24 Vested (2,938,557 ) 13.27 Cancelled (205,185 ) 12.69 Unvested, December31, 2009 6,362,099 12.57 The following table summarizes stock option activity under the Plan as of December31, 2009, and changes during the year then ended: Weighted- Average Weighted- Remaining Aggregate Number of Average Contractual Intrinsic Shares Exercise Price Term Value Under option, January1, 2009 22,708,740 $ 41.66 Granted 2,189,614 35.12 Exercised (

Segment Information

Segment Information
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Information [Abstract]
Segment Information	Segment Information Segment Information The Company has approximately 840 operations in 57 countries. These 840 businesses are internally reported as 60 operating segments to senior management. The Companys 60 operating segments have been aggregated into the following eight external reportable segments: Transportation; Industrial Packaging; Food Equipment; Power Systems Electronics; Construction Products; Polymers Fluids; Decorative Surfaces; and All Other. Transportation Transportation-related components, fasteners, fluids and polymers, as well as truck remanufacturing and related parts and service. Industrial Packaging Steel, plastic and paper products and equipment used for bundling, shipping and protecting goods in transit. Food Equipment Commercial food equipment and related service. Power Systems Electronics Equipment and consumables associated with specialty power conversion, metallurgy and electronics. Construction Products Tools, fasteners and other products for construction applications. Polymers Fluids Adhesives, sealants, lubrication and cutting fluids, and hygiene products. Decorative Surfaces Decorative surfacing materials for furniture, office and retail space, countertops, flooring and other applications. All Other All other operating segments. Segment information for 2009, 2008 and 2007 was as follows: In Thousands 2009 2008 2007 Operating revenues: Transportation $ 2,070,938 $ 2,347,366 $ 2,214,413 Industrial Packaging 1,895,704 2,618,922 2,414,860 Food Equipment 1,859,277 2,133,186 1,930,281 Power Systems Electronics 1,614,472 2,356,853 2,245,514 Construction Products 1,529,510 1,990,683 2,064,477 Polymers Fluids 1,155,838 1,249,653 944,851 Decorative Surfaces 998,191 1,230,995 1,239,190 All Other 2,786,695 3,226,927 3,103,337 Intersegment revenues (33,557 ) (54,244 ) (46,656 ) $ 13,877,068 $ 17,100,341 $ 16,110,267 Operating income: Transportation $ 153,674 $ 276,900 $ 372,567 Industrial Packaging 88,755 281,134 301,251 Food Equipment 255,094 320,867 303,349 Power Systems Electronics 216,840 464,328 451,714 Construction Products 97,864 244,822 289,064 Polymers Fluids 70,396 180,040 158,813 Decorative Surfaces 113,727 142,582 160,973 All Other 389,629 590,613 590,035 $ 1,385,979 $ 2,501,286 $ 2,627,766