The document is Illinois Tool Works' (ITW) 2004 annual report. It discusses how ITW grows its diversified manufacturing business through disciplined focus on growing base revenues, making profitable acquisitions, and improving operating margins. ITW employs around 49,000 people across 650 decentralized business units in 45 countries. The report provides details on ITW's financial performance in 2004 and outlines its strategy and approach to growing revenues, acquisitions, and margins improvement through its 80/20 business process.
Illinois Tool Works Inc. (ITW) is a leading diversified manufacturing company with nearly 100 years of history. ITW designs and produces highly engineered fasteners, components, equipment, and specialty products for customers around the world through its 700 decentralized business units located in 48 countries. The document provides an overview of ITW's manufacturing segments, product categories, major businesses, end markets, financial highlights, and strategies for revenue growth through both base business expansion and acquisitions.
The document is ITW's 2003 annual report. It provides an overview of ITW's financial highlights for 2003 including operating revenues, operating income, income from continuing operations, earnings per share, returns and cash flows. It also summarizes ITW's business segments and major product categories. The report discusses ITW's decentralized structure across multiple business units and brands, and how its focus on diversification, continual improvement, and serving customers helps drive financial results.
ITW Annual Report 2002 provides an overview of Illinois Tool Works Inc. for the year 2002. Some key points:
- ITW operates across multiple business segments and geographic regions, providing engineered products and specialty systems to a variety of end markets including construction, automotive, food equipment, and general industry.
- In 2002, stronger end markets like construction helped offset weaker demand in other markets, leading to overall solid financial performance for the company.
- ITW's decentralized structure with business units having autonomy fosters innovation, customer focus, and operating margin improvements through the consistent use of an 80/20 business planning process.
Toy and sporting good manufacturing in australia industry reportTri Nguyen
The toy and sporting goods manufacturing industry in Australia has struggled over the past five years with a 3.7% annual decline in revenue due to increased import competition and changing consumer preferences. Rising imports, particularly from China, have reduced domestic product margins and profitability. While factors like increased household income and sport participation provide some opportunities for growth, overall industry performance is expected to remain weak with further revenue declines of 1.5% annually through 2015-16 as import competition and exchange rate fluctuations continue to pressure the Australian industry.
State of chicago area distres -matthew andersonguest381588
1) Commercial real estate values in Chicago have declined 42% since their peak, with $32.6 billion in loans maturing in the next 3 years and $50.3 billion maturing in the next 5 years.
2) Delinquency rates on commercial mortgages and CMBS loans in Chicago have been rising, with over $3 billion in construction and land development loans delinquent as of Q4 2009.
3) The number of problem banks in Illinois has risen to 60 currently, with continued bank failures expected through 2011 as distressed commercial real estate assets weigh on banks.
Dover Corporation reported first quarter 2008 results with revenue increasing 8% year-over-year to $1.9 billion driven by organic growth of 2.8% and acquisition growth of 1.8%. Earnings per share increased 16% to $0.76 per share and free cash flow was $104 million, up significantly from the prior year. Business activity remained strong across Dover's portfolio of industrial businesses although some segments faced tougher prior year comparisons and challenges in certain US markets.
This document summarizes Dover Corporation's fourth quarter 2007 earnings conference call. It discusses Dover's strong financial performance in Q4 and fiscal year 2007, with record revenue and earnings. Segment margins increased 20 basis points in Q4 and decreased 70 basis points for the full year. Organic growth was 2.8% in Q4 and 2.3% for fiscal year 2007. The document reviews performance and growth across Dover's various business platforms.
Illinois Tool Works Inc. (ITW) is a leading diversified manufacturing company with nearly 100 years of history. ITW designs and produces highly engineered fasteners, components, equipment, and specialty products for customers around the world through its 700 decentralized business units located in 48 countries. The document provides an overview of ITW's manufacturing segments, product categories, major businesses, end markets, financial highlights, and strategies for revenue growth through both base business expansion and acquisitions.
The document is ITW's 2003 annual report. It provides an overview of ITW's financial highlights for 2003 including operating revenues, operating income, income from continuing operations, earnings per share, returns and cash flows. It also summarizes ITW's business segments and major product categories. The report discusses ITW's decentralized structure across multiple business units and brands, and how its focus on diversification, continual improvement, and serving customers helps drive financial results.
ITW Annual Report 2002 provides an overview of Illinois Tool Works Inc. for the year 2002. Some key points:
- ITW operates across multiple business segments and geographic regions, providing engineered products and specialty systems to a variety of end markets including construction, automotive, food equipment, and general industry.
- In 2002, stronger end markets like construction helped offset weaker demand in other markets, leading to overall solid financial performance for the company.
- ITW's decentralized structure with business units having autonomy fosters innovation, customer focus, and operating margin improvements through the consistent use of an 80/20 business planning process.
Toy and sporting good manufacturing in australia industry reportTri Nguyen
The toy and sporting goods manufacturing industry in Australia has struggled over the past five years with a 3.7% annual decline in revenue due to increased import competition and changing consumer preferences. Rising imports, particularly from China, have reduced domestic product margins and profitability. While factors like increased household income and sport participation provide some opportunities for growth, overall industry performance is expected to remain weak with further revenue declines of 1.5% annually through 2015-16 as import competition and exchange rate fluctuations continue to pressure the Australian industry.
State of chicago area distres -matthew andersonguest381588
1) Commercial real estate values in Chicago have declined 42% since their peak, with $32.6 billion in loans maturing in the next 3 years and $50.3 billion maturing in the next 5 years.
2) Delinquency rates on commercial mortgages and CMBS loans in Chicago have been rising, with over $3 billion in construction and land development loans delinquent as of Q4 2009.
3) The number of problem banks in Illinois has risen to 60 currently, with continued bank failures expected through 2011 as distressed commercial real estate assets weigh on banks.
Dover Corporation reported first quarter 2008 results with revenue increasing 8% year-over-year to $1.9 billion driven by organic growth of 2.8% and acquisition growth of 1.8%. Earnings per share increased 16% to $0.76 per share and free cash flow was $104 million, up significantly from the prior year. Business activity remained strong across Dover's portfolio of industrial businesses although some segments faced tougher prior year comparisons and challenges in certain US markets.
This document summarizes Dover Corporation's fourth quarter 2007 earnings conference call. It discusses Dover's strong financial performance in Q4 and fiscal year 2007, with record revenue and earnings. Segment margins increased 20 basis points in Q4 and decreased 70 basis points for the full year. Organic growth was 2.8% in Q4 and 2.3% for fiscal year 2007. The document reviews performance and growth across Dover's various business platforms.
El documento describe cómo Abraham Lincoln se convirtió al cristianismo después de experimentar grandes tragedias y sufrimientos durante la Guerra Civil, incluyendo la muerte de su hijo. También relata cómo Jesús se unió a dos discípulos que estaban tristes y confundidos después de su crucifixión, y les explicó las Escrituras, lo que les dio consuelo. El sufrimiento a menudo conduce a las personas a buscar a Dios y encontrar significado a través de Él.
This document provides an overview and analysis of Illinois Tool Works Inc.'s financial statements for 2001, 2000 and 1999. It summarizes revenues, operating income, and margins for each of ITW's five business segments for each year. It also discusses factors affecting revenues and costs, including lower demand in North America, currency fluctuations, acquisitions, and nonrecurring costs. Additionally, it provides details on ITW's investments in mortgage-related assets and the expected future cash flows from these investments.
POLICY SUPPORT IN MEDIA AND ENTERTAINMENT FOR MAKING IT GLOBALLY COMPETITIVE-...anthony4web
The document discusses policy support for making the media and entertainment industry globally competitive in India. It summarizes the key aspects of the Information Technology Act, 2000 that provide the legal framework for electronic records and transactions. It also discusses the proposed Broadcasting Bill and issues around overlapping regulations between the IT Act and the proposed bill, as well as concerns around draconian government powers and the need for stakeholder inputs.
U.S. Steel United States Steel Corporation Declares Dividendfinance15
United States Steel Corporation announced a dividend of 30 cents per share on its common stock. The dividend will be payable on March 10, 2009 to stockholders of record as of the close of business on February 11, 2009. The announcement was made in a press release from United States Steel Corporation's Public Affairs office in Pittsburgh, Pennsylvania, providing contact information for media and investors.
In 2004, Kohl's expanded its brand selection and introduced several new exclusive brands to attract more customers. Financial highlights show sales and profits increased over 13-22% from the previous year. In 2005, Kohl's will continue adding new brands like Chaps, Candie's, and The Backyardigans to draw customers and differentiate its merchandise. It will also enhance the store experience through improved navigation and presentation.
The document is Anadarko Petroleum Corporation's 2008 Fourth Quarter Operations Report. It summarizes Anadarko's operational performance and key accomplishments in the fourth quarter of 2008. Specifically, it discusses:
1) Strong operational performance and sales volumes above guidance despite challenges.
2) Exciting results from Anadarko's deepwater exploration program including a major Gulf of Mexico discovery.
3) Encouraging results from U.S. onshore exploration including the Marcellus and Haynesville shale plays.
4) Continued growth in Anadarko's major Rockies natural gas assets and enhanced drilling efficiencies across development programs.
This is an overview of a 3day learning programme created for the progressive consultancy Raison d'Etre to holistically and authentically approach the development of sales skills across their global spa teams.
Dominion has the opportunity to create shareholder value by leveraging its existing strengths such as a skilled workforce, sound business plan, and industry-leading performance efficiency. These embedded strengths and competitive advantages position Dominion well for long-term success.
Este documento describe cómo los proyectos de fin de carrera de estudiantes de ingeniería de la Universidad de Oviedo, a través de la organización Ingeniería Sin Fronteras, han ayudado a mejorar las comunicaciones y los sistemas de salud en los campamentos de refugiados saharauis en el desierto de Tindouf, Argelia. Se detallan proyectos pasados para instalar conexiones vía satélite y radio que mejoraron la hidrología y la gestión médica. El nuevo objetivo es desarrollar una red de
Un hombre le dio 1,000 euros a cada una de sus 3 novias para ver qué hacían con el dinero y decidir con cuál casarse. La primera gastó el dinero en su apariencia. La segunda le compró regalos caros. La tercera invirtió el dinero y lo duplicó, devolviéndole los 1,000 euros y reinvirtiendo la ganancia para su futuro juntos. A pesar de analizar cuidadosamente cada comportamiento, el hombre decidió casarse con la novia con los senos más grandes.
Encontro de Fiscalização e Seminário Regional sobre Agrotóxicos 2009 - Goiâni...Agropec Consultoria
O documento anuncia um evento sobre fiscalização e seminário regional sobre agrotóxicos que ocorrerá de 14 a 16 de abril de 2009 em Goiânia, Goiás. O encontro de fiscais será nos dias 14 e 15 no SFA-GO e o seminário sobre agrotóxicos no dia 16 no auditório da FIEG. Mais informações e inscrições estão disponíveis no site listado.
The document is Illinois Tool Works Inc.'s Form 10-Q filing for the quarterly period ended June 30, 2004. It provides financial statements and notes for the company, including their statement of income, balance sheet, and notes on accounting policies. For the quarter, Illinois Tool Works reported revenues of $3 billion, operating income of $561.5 million, and net income of $360.3 million. As of June 30, 2004 their total assets were $11.85 billion with current assets of $4.99 billion.
Os alunos do Clube "Meu Amigo Ambiente" visitaram o Parque Ecológico do Funchal em novembro de 2008 e janeiro, onde aprenderam sobre a floresta Laurissilva e plantaram árvores nativas. Eles descreveram as espécies que aprenderam a identificar como o Cedro da Madeira, a Urze e o seu papel na captura da água da chuva. Apesar do frio em janeiro, os alunos se divertiram plantando as árvores e ajudando a proteger a flo
Tim Ash of SiteTuners gave a presentation on conversion hacking the brain. He discussed how the brain has three parts - the neo-cortex, limbic system, and brain stem - and how marketers can appeal to each. He provided strategies for optimizing conversions such as limiting choices, using anchors, appealing to tribal instincts, and leveraging the powerful impact of visuals. The presentation covered how to increase ROI by understanding irrational behaviors and designing marketing campaigns accordingly.
Illinois Tool Works Inc. (ITW) is a leading diversified manufacturing company with nearly 100 years of history. ITW designs and produces highly engineered fasteners, components, equipment, and specialty products for customers around the world through its 700 decentralized business units located in 48 countries. The document provides an overview of ITW's manufacturing segments, product categories, major businesses, end markets, financial highlights, and strategies for revenue growth through both base business expansion and acquisitions.
The ITW Annual Report 2003 document contains the following key information:
1) ITW operates over 600 decentralized business units across 44 countries focused on engineered products and specialty systems for diverse end markets.
2) In 2003, ITW achieved operating revenues of $10.035 billion, operating income of $1.633 billion, and income from continuing operations of $1.040 billion.
3) ITW pursues continual improvement and innovation through a disciplined 80/20 process, focusing on the most important customers and products to drive improved financial results.
El documento describe cómo Abraham Lincoln se convirtió al cristianismo después de experimentar grandes tragedias y sufrimientos durante la Guerra Civil, incluyendo la muerte de su hijo. También relata cómo Jesús se unió a dos discípulos que estaban tristes y confundidos después de su crucifixión, y les explicó las Escrituras, lo que les dio consuelo. El sufrimiento a menudo conduce a las personas a buscar a Dios y encontrar significado a través de Él.
This document provides an overview and analysis of Illinois Tool Works Inc.'s financial statements for 2001, 2000 and 1999. It summarizes revenues, operating income, and margins for each of ITW's five business segments for each year. It also discusses factors affecting revenues and costs, including lower demand in North America, currency fluctuations, acquisitions, and nonrecurring costs. Additionally, it provides details on ITW's investments in mortgage-related assets and the expected future cash flows from these investments.
POLICY SUPPORT IN MEDIA AND ENTERTAINMENT FOR MAKING IT GLOBALLY COMPETITIVE-...anthony4web
The document discusses policy support for making the media and entertainment industry globally competitive in India. It summarizes the key aspects of the Information Technology Act, 2000 that provide the legal framework for electronic records and transactions. It also discusses the proposed Broadcasting Bill and issues around overlapping regulations between the IT Act and the proposed bill, as well as concerns around draconian government powers and the need for stakeholder inputs.
U.S. Steel United States Steel Corporation Declares Dividendfinance15
United States Steel Corporation announced a dividend of 30 cents per share on its common stock. The dividend will be payable on March 10, 2009 to stockholders of record as of the close of business on February 11, 2009. The announcement was made in a press release from United States Steel Corporation's Public Affairs office in Pittsburgh, Pennsylvania, providing contact information for media and investors.
In 2004, Kohl's expanded its brand selection and introduced several new exclusive brands to attract more customers. Financial highlights show sales and profits increased over 13-22% from the previous year. In 2005, Kohl's will continue adding new brands like Chaps, Candie's, and The Backyardigans to draw customers and differentiate its merchandise. It will also enhance the store experience through improved navigation and presentation.
The document is Anadarko Petroleum Corporation's 2008 Fourth Quarter Operations Report. It summarizes Anadarko's operational performance and key accomplishments in the fourth quarter of 2008. Specifically, it discusses:
1) Strong operational performance and sales volumes above guidance despite challenges.
2) Exciting results from Anadarko's deepwater exploration program including a major Gulf of Mexico discovery.
3) Encouraging results from U.S. onshore exploration including the Marcellus and Haynesville shale plays.
4) Continued growth in Anadarko's major Rockies natural gas assets and enhanced drilling efficiencies across development programs.
This is an overview of a 3day learning programme created for the progressive consultancy Raison d'Etre to holistically and authentically approach the development of sales skills across their global spa teams.
Dominion has the opportunity to create shareholder value by leveraging its existing strengths such as a skilled workforce, sound business plan, and industry-leading performance efficiency. These embedded strengths and competitive advantages position Dominion well for long-term success.
Este documento describe cómo los proyectos de fin de carrera de estudiantes de ingeniería de la Universidad de Oviedo, a través de la organización Ingeniería Sin Fronteras, han ayudado a mejorar las comunicaciones y los sistemas de salud en los campamentos de refugiados saharauis en el desierto de Tindouf, Argelia. Se detallan proyectos pasados para instalar conexiones vía satélite y radio que mejoraron la hidrología y la gestión médica. El nuevo objetivo es desarrollar una red de
Un hombre le dio 1,000 euros a cada una de sus 3 novias para ver qué hacían con el dinero y decidir con cuál casarse. La primera gastó el dinero en su apariencia. La segunda le compró regalos caros. La tercera invirtió el dinero y lo duplicó, devolviéndole los 1,000 euros y reinvirtiendo la ganancia para su futuro juntos. A pesar de analizar cuidadosamente cada comportamiento, el hombre decidió casarse con la novia con los senos más grandes.
Encontro de Fiscalização e Seminário Regional sobre Agrotóxicos 2009 - Goiâni...Agropec Consultoria
O documento anuncia um evento sobre fiscalização e seminário regional sobre agrotóxicos que ocorrerá de 14 a 16 de abril de 2009 em Goiânia, Goiás. O encontro de fiscais será nos dias 14 e 15 no SFA-GO e o seminário sobre agrotóxicos no dia 16 no auditório da FIEG. Mais informações e inscrições estão disponíveis no site listado.
The document is Illinois Tool Works Inc.'s Form 10-Q filing for the quarterly period ended June 30, 2004. It provides financial statements and notes for the company, including their statement of income, balance sheet, and notes on accounting policies. For the quarter, Illinois Tool Works reported revenues of $3 billion, operating income of $561.5 million, and net income of $360.3 million. As of June 30, 2004 their total assets were $11.85 billion with current assets of $4.99 billion.
Os alunos do Clube "Meu Amigo Ambiente" visitaram o Parque Ecológico do Funchal em novembro de 2008 e janeiro, onde aprenderam sobre a floresta Laurissilva e plantaram árvores nativas. Eles descreveram as espécies que aprenderam a identificar como o Cedro da Madeira, a Urze e o seu papel na captura da água da chuva. Apesar do frio em janeiro, os alunos se divertiram plantando as árvores e ajudando a proteger a flo
Tim Ash of SiteTuners gave a presentation on conversion hacking the brain. He discussed how the brain has three parts - the neo-cortex, limbic system, and brain stem - and how marketers can appeal to each. He provided strategies for optimizing conversions such as limiting choices, using anchors, appealing to tribal instincts, and leveraging the powerful impact of visuals. The presentation covered how to increase ROI by understanding irrational behaviors and designing marketing campaigns accordingly.
Illinois Tool Works Inc. (ITW) is a leading diversified manufacturing company with nearly 100 years of history. ITW designs and produces highly engineered fasteners, components, equipment, and specialty products for customers around the world through its 700 decentralized business units located in 48 countries. The document provides an overview of ITW's manufacturing segments, product categories, major businesses, end markets, financial highlights, and strategies for revenue growth through both base business expansion and acquisitions.
The ITW Annual Report 2003 document contains the following key information:
1) ITW operates over 600 decentralized business units across 44 countries focused on engineered products and specialty systems for diverse end markets.
2) In 2003, ITW achieved operating revenues of $10.035 billion, operating income of $1.633 billion, and income from continuing operations of $1.040 billion.
3) ITW pursues continual improvement and innovation through a disciplined 80/20 process, focusing on the most important customers and products to drive improved financial results.
ITW Annual Report 2002 provides an overview of Illinois Tool Works Inc. for the year 2002. Some key points:
- ITW operates across multiple business segments and geographic regions, providing engineered products and specialty systems to a variety of end markets including construction, automotive, food equipment, and general industry.
- In 2002, stronger end markets like construction helped offset weaker demand in other markets, leading to overall solid financial performance for the company.
- ITW's decentralized structure with business units having autonomy fosters innovation, customer focus, and operating margin improvements through the consistent use of an 80/20 business planning process.
ITW designs and produces fasteners, components, equipment and specialty products for customers around the world through over 750 decentralized business units in 49 countries. In 2006, ITW achieved $14.1 billion in revenues and acquired 53 companies, expanding into new markets and geographies globally. While diversifying internationally, ITW focuses on providing innovative solutions and exceptional customer service to create value for customers in all markets.
ITW designs and produces fasteners, components, equipment and specialty products for customers around the world through over 750 decentralized business units in 49 countries. In 2006, ITW's revenues increased 10% to $14.1 billion due to 4% base revenue growth, 7% from acquisitions, and it acquired 53 companies representing $1.7 billion in annual revenues to further diversify its business across industries and geographies. Looking ahead, ITW aims to continue growing its business globally, including expanding its presence in emerging markets and Asia Pacific region which it expects to be a significant contributor to future revenue growth.
Illinois Tool Works Inc. (ITW) is a Fortune 200 company with $9.3 billion in revenues from its 600 business units across 43 countries. ITW produces highly engineered fasteners, components, equipment and specialty products. In 2001, revenues declined 2% to $9.3 billion due to a 7% drop in base business from economic weakness. Operating income and earnings per share declined 17% from 2000 levels. However, ITW is well positioned for growth as the economy recovers due to its decentralized structure, customer focus, value-added innovation, and acquisition strategy.
Illinois Tool Works Inc. (ITW) is a Fortune 200 company with $9.3 billion in revenues from its 600 business units across 43 countries. ITW produces highly engineered fasteners, components, equipment and specialty products. In 2001, revenues declined 2% to $9.3 billion due to a 7% drop in base business from economic weakness. Operating income and earnings per share declined 17% from their record levels in 2000. However, ITW is well positioned for growth as the economy recovers due to its focus on customer relationships, decentralized structure, and ongoing acquisition strategy.
This document is Parker Hannifin Corporation's 2001 Annual Report which provides an overview of the company's financial performance and discusses its strategies. The report discusses how Parker operates in many industries including aerospace, food processing, computing, energy, transportation, manufacturing and more. It highlights several acquisitions Parker made in 2001 to expand its capabilities and better serve customers. The report emphasizes Parker's focus on customer service, financial performance, and growth through innovation.
This document is Parker Hannifin Corporation's 2001 Annual Report which provides an overview of the company's financial performance and discusses its strategies. The report summarizes that Parker experienced a decline in orders during a manufacturing recession but took steps to reduce costs and maintain margins. It also discusses several acquisitions completed in 2001 to expand its product offerings and industries served. The report outlines Parker's strategy of focusing on customer service, financial performance, and growth to strengthen its position as a leader in motion and control technologies.
Owens & Minor is a leading distributor of medical supplies with $4.24 billion in sales in 2003. It provides distribution, consulting, and supply chain management services to hospitals and healthcare systems. In 2003, Owens & Minor grew sales 7.2% and net income 13.5% while maintaining expenses as a percentage of sales. It continued initiatives in distribution, consulting, and third party logistics while forming new partnerships.
Tenneco Automotive reduced SGA&E expenses by $17 million or 3.7% from 2000 to 2001 through cost cutting initiatives like Six Sigma and strategic sourcing. Six Sigma projects identified process improvements that saved $19 million in 2001, while reverse auctions for parts lowered supply costs by an average of 13%. The company also used computer-aided engineering tools to design emission control systems virtually in order to reduce development costs and time to market for new products.
Owens & Minor is the leading distributor of medical and surgical supplies in the US. In 2001, the company grew sales by 9% while maintaining a gross margin of 10.7% and improving earnings per share to $1.03 excluding unusual items. The company strengthened its balance sheet by refinancing debt and increased business with group purchasing organization customers using its CostTrack pricing model. Owens & Minor focuses on service, partnerships, consistency and using technology like WISDOM to meet customer needs, positioning it for continued leadership in the evolving healthcare supply chain.
- Embraer delivered 28 commercial jets and sold 17 E-Jets in 3Q11, reaching 1,018 firm orders total. Six additional orders were placed with GECAS in October.
- Revenue was US$3.78 billion year-to-date, with a gross margin of 22.5%. Net income was US$126 million excluding deferred taxes.
- The firm order backlog reached US$16 billion as of 3Q11, and Embraer delivered its 800th E190 jet to China Southern Airlines during the quarter.
This document is Parker Hannifin Corporation's 2002 Annual Report. The summary provides an overview of Parker's financial performance for fiscal years 2002, 2001, and 2000. It also discusses Parker's strategies to improve customer service, accelerate financial performance, and drive profitable growth. Parker aims to be the leading provider of motion and control systems through innovation, strategic acquisitions, and developing new markets.
Owens & Minor had strong financial results in 2000. Net sales reached $3.5 billion, up 10% from 1999. Earnings per share were $0.93, up 16% from the previous year. The company grew organically and through the acquisition of Medix. Owens & Minor continued investing in technology to improve customer service and productivity. It strengthened relationships with key customers and signed new supply chain agreements. Productivity gains increased sales and margins per employee. The balanced scorecard approach and technology investments have positioned Owens & Minor for continued success.
- Illinois Tool Works Inc. (ITW) is a worldwide manufacturer of engineered products and systems organized into 5 segments: Engineered Products—North America, Engineered Products—International, Specialty Systems—North America, Specialty Systems—International, and Leasing and Investments.
- ITW focuses on key performance metrics like revenues, income, margins, and applies an "80/20 simplification process" to focus on the most important parts of the business.
- Across segments, results varied in 2002 from 2001 - some saw income increases from cost improvements and acquisitions while others faced revenue declines from slower end markets.
- Illinois Tool Works Inc. (ITW) is a worldwide manufacturer of engineered products and systems organized into 5 segments: Engineered Products—North America, Engineered Products—International, Specialty Systems—North America, Specialty Systems—International, and Leasing and Investments.
- ITW focuses on key performance metrics like revenues, income, margins, and applies an "80/20 simplification process" to focus on the most important parts of the business.
- Across segments, results varied in 2002 from 2001 - some saw income increases from cost improvements and acquisitions while others faced revenue declines from slower end markets.
The document summarizes BR Properties' 4Q12 and full year 2012 financial highlights. Some key points:
- 4Q12 net revenues were R$200.7 million, up 122% year-over-year. Full year 2012 net revenues reached R$630.8 million.
- 4Q12 adjusted EBITDA was R$176.1 million, up 117% year-over-year, with a margin of 88%. Full year 2012 adjusted EBITDA was R$568.8 million with a margin of 90%.
- The portfolio was appraised at R$13.84 billion at the end of 4Q12, up 20% from 2011. The average capitalization
4 q12 br properties earnings release presentation - final (1)brproperties
- BR Properties reported strong financial results in 4Q12 and full year 2012, with net revenues increasing 122% and 84% respectively.
- Adjusted EBITDA grew 117% in 4Q12 and 82% for the full year, while net income was up 160% and 266% due to property appraisals.
- The company acquired one property and delivered certificates of occupancy for two others, while prepaying debt and raising additional capital.
C.H. Robinson achieved strong success in 2007 despite challenging market conditions. The company grew gross profits 14.9% to $1.2 billion through its diverse mix of transportation services and customer relationships. Its non-asset based model and over 7,300 employees enabled it to efficiently manage over 6.5 million shipments. Looking ahead, C.H. Robinson is well positioned for continued growth given industry trends, its financial strength with no debt and $455 million in cash, and opportunities to expand internationally and through acquisitions.
This document provides consolidated financial highlights for Burlington Northern Santa Fe Corporation for the years 1991-1995. Some key points:
- Revenues grew from $4.559 billion in 1991 to $6.183 billion in 1995. Operating income improved from a loss of $239 million in 1991 to income of $526 million in 1995, excluding unusual merger-related charges.
- Net income was $92 million in 1995 but would have been $416 million without accounting changes and debt retirement costs related to the merger.
- Capital expenditures were $1.042 billion in 1995 and are planned to be nearly $1.7 billion in 1996 to support revenue growth and cost reduction initiatives.
This document summarizes the financial performance of Burlington Northern Santa Fe Corporation for the years 1992-1996. It reports that in 1996:
- Operating income increased 14% to $1.75 billion compared to 1995 on a comparable basis.
- Revenues reached $8.19 billion despite a drop in agricultural commodities revenues.
- Operating expenses were $178 million below 1995 levels, lowering the operating ratio to 78.6%.
- Net income grew 21% to $889 million, or $5.70 per share, compared to $733 million in 1995.
This annual report summarizes Burlington Northern Santa Fe Corporation's financial and operational performance in 1998. Some key highlights include:
- Revenues reached a record $8.94 billion, a 6.8% increase over 1997.
- Adjusted operating income grew 16% to a record $2.16 billion.
- Adjusted net income exceeded $1.12 billion, a 19% improvement over 1997.
- The operating ratio improved to 75.9%, nearly 2 points better than 1997's adjusted ratio.
- Safety continued to improve, with reductions in reportable injuries and rail accidents.
Burlington Northern Santa Fe Corporation's 1999 Annual Report summarizes the company's performance in 1999 and compares it to 1994, the year before the BNSF merger. Key points:
1) BNSF achieved record results in safety, customer service, efficiency and financial performance in 1999 compared to 1994.
2) Safety metrics like lost workdays and injuries dropped significantly. Customer service improved with 91% on-time performance. Operating expenses per ton-mile dropped 20-25%.
3) Financial results were also much stronger, with operating income reaching a record $2.24 billion, up 14% annually from 1994. The operating ratio improved 9 points to 75.4%.
Burlington Northern Santa Fe Corporation's 2000 Annual Report summarizes the company's performance for the year. Key points include:
- Revenues grew to $9.2 billion while operating expenses only increased 1% despite a $230 million rise in fuel costs.
- Intermodal revenues increased 6% to a record level while safety and efficiency improvements were made.
- However, weak coal demand, high fuel prices, and a slow US economy impacted results for the year.
- Over the past five years since the Burlington Northern and Santa Fe merger, significant progress has been made in safety, service, efficiency and financials.
This document is the 2001 Annual Report to Shareholders for Burlington Northern Santa Fe Corporation. It contains the following key information:
1) The CEO discusses BNSF's progress on its strategic priorities of People, Growth, Ease of Doing Business, Service, and Efficiency in 2001, noting challenges from the economic slowdown but some record achievements.
2) Safety improvements were made but injuries remained level, while discussions progressed with unions on safety agreements.
3) Revenues were flat in 2001 due to economic conditions, but some business lines like Mexico grew, and new customers and services helped capture additional market share.
4) Financial results disappointed expectations for revenue and operating ratio goals, though costs
BNSF is a major railroad network in the United States that transports a variety of goods. In 2003, BNSF saw revenue growth of 5% driven by strong intermodal growth, though on-time performance fell short of goals. Safety performance reached record levels with injury rates down significantly. Looking forward, BNSF aims to continue revenue growth through initiatives like expanding intermodal capacity and pursuing market-based pricing across all business lines.
Burlington Northern Santa Fe Corporation reported earnings of $0.36 per diluted share for the first quarter of 2001, compared to $0.55 per diluted share for the same period in 2000. Freight revenues were $2.26 billion, up slightly due to a 4% increase in ton-miles. Operating expenses increased 7% to $1.87 billion due to higher fuel costs, severe winter weather, and increased energy costs. The operating ratio was 81.5% compared to 77.3% in 2000. Revenue from agricultural commodities increased 11% while industrial revenues declined 3% and coal revenues declined 1% compared to the first quarter of 2000.
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2. Freight revenues decreased 6% to $2.14 billion due to softer demand across all major product sectors and mild winter weather reducing coal shipments.
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3. FINANCIAL HIGHLIGHTS
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS 2004 2003 2002
Year Ended December 31
Operating Results
Operating revenues $ 11,731,425 $ 10,035,623 $ 9,467,740
Operating income 2,056,613 1,633,458 1,505,771
Operating income margin 17.5% 16.3% 15.9%
Income from continuing operations $ 1,339,605 $ 1,040,214 $ 931,810
Return on operating revenues 11.4% 10.4% 9.8%
Operating income margins by segment:
Engineered Products—Nor th America 16.7% 16.0% 17.6%
Engineered Products—International 15.0 13.9 13.6
Specialty Systems—Nor th America 17.8 16.3 15.2
Specialty Systems—International 13.2 11.0 9.7
Leasing and Investments 88.4 76.6 47.1
Per Share of Common Stock
Income from continuing operations:
Basic $ 4.43 $ 3.39 $ 3.04
Diluted 4.39 3.37 3.02
Cash dividends paid $ 1.00 $ 0.93 $ 0.89
Returns
Return on average invested capital 18.5% 16.1% 15.0%
Return on average stockholders’ equity 17.3 14.3 14.7
Liquidity and Capital Resources
Free operating cash flow $ 1,334,883 $ 1,169,938 $ 1,095,112
Total debt to total capitalization 12.8% 11.0% 19.2%
TABLE OF CONTENTS
ITW at a Glance 2 A Disciplined Approach 3 Par t 1: Base Revenues 4 Par t 2: Acquisitions 14 Par t 3: Margin Improvement 20
Management Team 26 Letter to Shareholders 28 Financial Table of Contents 30 Corporate Executives and Directors 80
1
4. ITW AT A GLANCE Illinois Tool Works Inc. (NYSE: ITW) designs and produces an array of highly engineered fasteners
and components, equipment and consumable systems, and specialty products and equipment
for customers around the world. A leading diversified manufacturing company with nearly
100 years of histor y, ITW’s some 650 decentralized business units in 45 countries employ
approximately 49,000 men and women who are focused on creating value-added products
and innovative customer solutions.
PRODUCT MAJOR PRIMARY
CATEGORIES BUSINESSES END MARKETS
ENGINEERED Shor t lead-time plastic and Buildex, CIP, Deltar, Devcon, Construction, automotive and
metal components and Drawform, Fastex, Fibre Glass general industrial
PRODUCTS
fasteners, and specialty Evercoat, ITW Brands,
NORTH AMERICA products such as adhesives, Minigrip/Zip-Pak, Paslode,
fluid products and Ramset/Red Head,
resealable packaging Shakeproof, TACC, Texwipe,
Truswal and Wilsonar t
ENGINEERED Shor t lead-time plastic and Bailly Comte, Buildex, Deltar, Construction, automotive and
metal components and Fastex, Ispra, James Briggs, general industrial
PRODUCTS
fasteners, and specialty Krafft, Meritex, Novadan,
INTERNATIONAL products such as electronic Paslode, Pr yda, Ramset,
component packaging Resopal, Rocol, Shakeproof,
SPIT and Wilsonar t
SPECIALTY Longer lead-time machiner y Acme Packaging, Angleboard, Food institutional and retail,
and related consumables, and DeVilbiss, Gerrard, Hi-Cone, general industrial, construction,
SYSTEMS
specialty equipment for Hobar t, ITW Foils, Miller, and food and beverage
NORTH AMERICA applications such as food Ransburg, Signode, Valeron,
service and industrial finishing Unipac and Vulcan
SPECIALTY Longer lead-time machiner y Auto-Sleeve, Decorative General industrial, food
and related consumables, and Sleeves, DeVilbiss, Elga, institutional and retail, and
SYSTEMS
specialty equipment for Foster, Gema, Gerrard, food and beverage
INTERNATIONAL applications such as food Hi-Cone, Hobar t, ITW Foils,
service and industrial finishing Mima, Orgapack, Ransburg,
Signode, Simco, Strapex
and Tien Tai Electrode
LEASING AND This segment makes oppor tunistic investments in the following categories: mor tgage entities;
leases of telecommunications, aircraft, air traffic control and other equipment; properties; affordable
INVESTMENTS
housing; and a venture capital fund.
2
5. A sound strategy.
A disciplined approach.
At ITW, we know what it takes. We’ve been growing this
business since 1912. How? By following a sound business
strategy that focuses on customers first.
By building a solid management team from the ground up.
By infusing innovation and an entrepreneurial spirit into
every level of our business. And by staying focused on our
operational and financial goals:
growing base revenues,
making profitable acquisitions, and
improving operating margins and returns.
It’s the way we do business.
And it’s what drives our growth over the long term.
3
7. Base
Revenues
A diversified sales mix. A decentralized operating structure.
A sharp focus on core products, new product development and customers.
Our formula for growing base revenues works.
We have the track record to prove it.
5
8. ENGINEERED PRODUCTS
Construction
Wherever there is commercial, renovation or residential construction taking place in
the world, ITW products are on the job. From Paslode nail systems and staplers to
Buildex specialty fasteners and tools, our ITW construction products businesses manufacture
innovative products that set the standard in today’s construction industr y.
60 BUSINESSES IN 20 COUNTRIES
2004 REVENUE DIVERSIFICATION
45% NORTH AMERICA 30% EUROPE 25% ASIA PACIFIC
6
9.
10.
11. ENGINEERED PRODUCTS
Automotive
ITW plays the role of a specialty supplier to many of the world’s best-known
automotive companies. Leading manufacturers and suppliers rely on our ITW automotive business
units for the industr y-leading fasteners and components they need to ensure quality and
cost savings in the cars and light trucks they produce.
53 BUSINESSES IN 17 COUNTRIES
2004 REVENUE DIVERSIFICATION
56% NORTH AMERICA 41% EUROPE 3% ASIA PACIFIC AND SOUTH AMERICA
9
12. SPECIALTY SYSTEMS
Food Institutional and Retail
From well-known casual dining restaurants and supermarkets to convention centers and
cruise ships, ITW outfits a diverse array of commercial kitchens around the globe.
Our own Hobar t business is the world’s premier commercial food equipment and ser vice provider
for both the food ser vice and food retail industries. And our other brands, including Traulsen,
Vulcan and Foster, are recognized and respected worldwide.
40 BUSINESSES IN 23 COUNTRIES
2004 REVENUE DIVERSIFICATION
67% NORTH AMERICA 30% EUROPE 3% ASIA PACIFIC AND SOUTH AMERICA
10
13.
14.
15. SPECIALTY SYSTEMS
Industrial Packaging
Through our Signode Packaging Systems businesses, we par tner with customers
around the world to help them create the most efficient, cost-effective ways to package,
handle and ship industrial products. As an industr y leader in packaging systems,
our strapping systems and consumables are used to secure ever ything from cotton bales
and newspapers to steel coils and corrugated car tons.
77 BUSINESSES IN 31 COUNTRIES
2004 REVENUE DIVERSIFICATION
54% NORTH AMERICA 36% EUROPE 10% ASIA PACIFIC AND SOUTH AMERICA
13
17. Acquisitions
Strong products and brand names. Long-term growth potential.
Increased market penetration. Opportunities for margin improvement.
A well-schooled management team. These are the traits we look for
in our tried-and-true way of making profitable acquisitions.
A target company must add value for our customers to be the right fit for ITW.
15
18. Andy Schwitter
Key members of the ITW acquisition team:
Mary Ann Spiegel (legal), Steve Micatka (internal audit),
Maria Green (legal)
19. Truswal Systems
While our acquisition strategy almost always is driven by a bottom-up After an extensive evaluation of the business, we determined that
approach that originates at the customer and individual business- Truswal provided a significant opportunity to create a stronger foot-
unit levels, occasionally a great company finds us. Needless to say, print in the residential and commercial construction markets, where
when the right oppor tunity knocks—we answer. our Paslode, Buildex and Ramset/Red Head units are already well
known. What’s more, several of our companies regularly sold products
Such was the case with the 2004 acquisition of Truswal Systems
to truss manufacturers, making Truswal a natural extension of our
Corporation, a leading supplier of engineered products and software
core business.
for the building components industr y in Nor th America. In addition
®
to producing the well-known truss systems such as SpaceJoist TE This acquisition expands ITW’s activities in the construction-related
™
and TrusSpacer , Truswal also invests millions of dollars to develop software business. While all of Truswal’s computer programs are deeply
state-of-the-art software programs for component design, engineering, rooted in our base business, Truswal’s exper tise in developing
building layout and truss management. One of its newer programs, sophisticated, technological solutions will serve as a strong foundation
®
IntelliBuild , is revolutionizing the world of whole-house design, for ITW as the construction industr y continues to evolve over time.
integrating all components of a structure—walls, openings, roofs
and floors—into a single application.
“Our competition in the marketplace
now understands that ITW is going to be
a serious player in this arena.”
Andy Schwitter President and CEO, Truswal Systems Corporation
17
20. Mauricio Lujambio Mike Underwood
Key members of the ITW acquisition team:
Carmelle Giblin (group controller),
Jay Minich (internal audit)
21. Krafft
Our business unit managers are always on the lookout for After carefully examining the business, Lujambio and Under wood
oppor tunities to grow ITW in ways that make the most sense concluded that Krafft would complement the other companies in
for our customers. So when Mauricio Lujambio, General Manager of our polymers business. Initially, the company wasn’t prepared to sell,
ITW Polymex, learned about the Krafft polymers business at a trade but the owners expressed interest in leaving the door open for future
show a few years ago, he investigated the possibility of acquiring discussions. We maintained a friendly rappor t with the company
the company. Excited by the potential oppor tunity, Lujambio shared over the next three years until Februar y 2004, when Krafft decided
his discover y with Mike Under wood, Vice President and General to join forces with ITW.
Manager of ITW Per formance Polymers Nor th America. In 2001 the Now par t of ITW Per formance Polymers division, Krafft joins the
two made a special trip to Krafft headquar ters in Spain to find out ranks of such industr y-leading companies as VersaChem, Devcon,
more about its operations. Plexus and TACC. Through this acquisition, we are better positioned
During their visit, Lujambio and Under wood learned that Krafft is to help customers simplify purchasing activities around the world
one of the leading players in the polymers market in Spain. This through vendor consolidation. Moreover, Kraf ft opens up new
business produces a variety of adhesives, lubricants, sealants, and geographic and channel oppor tunities for our polymers business in
other original equipment manufacturer (OEM) and maintenance, Europe, while providing our customers with an expanded product
repair and operations (MRO) products for industry and the automotive offering in markets worldwide.
aftermarket. While Spain accounts for the majority of its sales,
Krafft also distributes products in various markets across southern
Europe, as well as the United States, the Middle East and the Far East.
“We like to have a position in small niche
markets, where we can really get to know the
customers and help them grow and prosper.”
David Parry President, ITW Per formance Polymers
19
23. Margin
Improvement
Innovating new products. Streamlining operations. Increasing productivity.
Reducing costs. Improving profitability and operating margins. It’s all part of our
strategic 80/20 business process—one that has delivered powerful results
since it was first developed nearly 20 years ago.
21
24.
25. 80/20:
The ITW Toolbox
A driving force behind much of our success at ITW is our 80/20 SEGMENTATION
business process, a practice that keeps us focused on our most Working in tandem with product line simplification and outsourcing,
profitable products and customers. For nearly 20 years, we have segmentation is our way of streamlining our large, multifaceted
been collecting and refining a comprehensive body of 80/20 businesses into smaller, more manageable business units. We
knowledge that touches ever y par t of our business. Known as the focus on the small pieces of the markets we ser ve and then create
ITW Toolbox, this repositor y of proven strategies and techniques ITW businesses to ser ve these niches. Segmentation allows us to
guides our business process and helps us find new ways to provide greater focus on customers, products and end markets,
enhance customer satisfaction as well as drive margin growth and and creates an ideal platform for integrating future acquisitions.
profitability. While a few of these strategies are outlined below, they
IN-LINING AND CELLULAR MANUFACTURING
are only a sampling of the power ful methodologies we bring to
We are constantly searching for better, more efficient ways to organize
ITW’s some 650 businesses around the world each and ever y day.
our shop-room floors. With in-lining and cellular manufacturing, we
PRODUCT LINE SIMPLIFICATION take a hard look at our plants to evaluate everything from the
To achieve a streamlined product line, we regularly assess our arrangement of workstations and equipment to employee training
products and technologies to ensure we’re appropriately focused programs and inventor y control. By reducing the complexity in
on key customers. We literally separate out our high-volume products our manufacturing processes, we increase the speed of deliver y,
and make them the focal point of our business. Then, we evaluate productivity and, in the end, profitability.
our lower-volume products and pursue oppor tunities to consolidate,
MARKET RATE OF DEMAND
outsource or, in some cases, eliminate their production. It’s a
Market rate of demand is the only way we manufacture. We produce
power ful technique that helps us focus with laser-like precision on
our products to actual order rates rather than relying on some
the basics of the business.
marketing plan that can be hopelessly outdated in shor t order.
OUTSOURCING Using this technique, we regularly review our sales activity, capacity
Once we’ve identified the lower-volume items in our product mix, we and lead times to determine target inventor y levels for each and
then pursue outsourcing oppor tunities. To accomplish this, we align every product. It’s a system that keeps us aligned with our customers’
ourselves with a select number of highly specialized suppliers, who needs and ensures we only produce what we can sell.
are able to deliver ITW quality products at a more efficient rate.
It’s a process that enables our businesses to continue to ser ve
specialty customers. At the same time, our units benefit from
reduced costs and greatly increased productivity.
23
26.
27. New Product Development:
A Way of Life at ITW
Fundamental to our 80/20 business process is our belief that new MILLER ELECTRIC’S AXCESS™ WELDING SYSTEM
products are a way of life at ITW. As a regular member of the United EMBODIES INNOVATION
States’ top 100 patent producers, ITW consistently conver ts ideas
Near the ver y top of ITW’s top patent producers, Miller Electric
into action—developing groundbreaking products, technologies and
is continuously searching for new and better ways to build value
ser vices that help our customers stay ahead in the marketplace.
for its welding customers. When the company learned that many
Each year, we commit significant resources to new product develop- production plants were manufacturing at rates consistent with the
ment through our engineering teams at the business units. These ‘60s, ‘70s and ‘80s, Miller set out to develop more effective welding
engineering people work hand-in-hand with their sales, marketing systems that would solve today’s more complex manufacturing
and manufacturing teams to ensure that new and improved products problems, shor ten production times and improve overall return
make their way into the hands of customers around the world. on investment.
We also have the ability to suppor t our businesses through our After an extensive research and development process that involved
ITW Technology Center. Working on a request only basis from a number of ITW customers, Miller introduced the revolutionary
our business units, the technology center develops cutting-edge Axcess welding system. Widely praised throughout the industr y, the
materials, products and manufacturing processes that drive our Axcess system features a number of patented technologies including
customers’ businesses. The technology center also manages the Accu-pulse™, a process improvement that dramatically increases
ITW Technology Resource Web site, a password-protected Internet the productivity of factor y welding workstations by an average of
site that allows information sharing among our business units 25 percent. Used in both robotic and manual welding applications by
worldwide. The site features valuable tools and information to a wide variety of manufacturers, Axcess is the world’s first universal
support new product development, including online forums, research welding system that can be integrated into production lines anywhere
on raw materials, vendor recommendations and a global director y of regardless of primar y voltage levels, which often var y from one
ITW employees with expertise or experience in a wide range of areas. countr y to the next. Best of all, the system is the easiest product
on the market to install in our customers’ existing automation
Whether it’s through our business units’ engineering teams or
processes, enabling them to achieve optimal per formance within
our technology center’s talented group of exper ts, ITW product
minutes—and at a minimal cost.
development focuses on solving the needs of our diverse customer
base. From the design of complex manufacturing facilities to the
development of new products, equipment and technologies, we
collaborate with customers to provide them with the innovations
they need to succeed.
25
28. Management Team
From left to right:
FRANK S. PTAK Vice Chairman; E. SCOTT SANTI Executive Vice President; JACK R. CAMPBELL Executive Vice President; HUGH J. ZENTMYER Executive Vice President;
W. JAMES FARRELL Chairman and Chief Executive Officer; JON C. KINNEY Chief Financial Officer
26
29. From left to right:
CRAIG A. HINDMAN Executive Vice President; THOMAS J. HANSEN Executive Vice President; DAVID B. SPEER President; RUSSELL M. FLAUM Executive Vice President;
DAVID T. FLOOD Executive Vice President; ALLAN C. SUTHERLAND Senior Vice President; PHILIP M. GRESH, JR. Executive Vice President
27
30. To Our Shareholders
At ITW, discipline makes the difference. From developing innovative return on invested capital improved to 18.5 percent, up from
products to improving manufacturing efficiencies to targeting 16.1 percent the prior year.
profitable acquisitions, we keep our eye on what matters most. As
LEADERSHIP FOR THE FUTURE
noted elsewhere in this repor t, our 80/20 business process makes
Results like these are driven not just by the 80/20 process itself, but
sure that leaders at ever y level of our company focus on our most
by the ability of ITW managers to understand and apply it ever y day.
power ful and profitable oppor tunities. Putting these principles into
Because this management capital is our most impor tant asset,
practice and refining them for nearly two decades have made your
we take a ver y disciplined approach to our leadership development
company one of the premier manufacturers in the world. And one of
and succession.
the best investments anywhere.
By and large, we promote from within. ITW’s highly decentralized
2004 FINANCIAL RESULTS structure and entrepreneurial culture create opportunities, as well as
Discipline keeps us accountable to our shareholders. Our focus on challenges, for our managers. Combining that practical experience
financial per formance has produced the consistent, quality returns with professional development programs produces a talented,
outlined in the char t below. And fiscal 2004 was a ver y strong year, trained and tested corps of leaders within the company.
even by ITW standards.
Your senior management team, for example, averages 26 years of
Revenues reached a record $11.7 billion, a 17 percent increase ser vice. Our Executive Vice Presidents are each responsible for
versus 2003. Notably, base revenues rose a robust 8 percent in roughly 75 businesses generating more than $1 billion in revenue.
2004 while acquisitions and currency translation grew 5 percent Together with their general managers and strong suppor t teams,
and 4 percent, respectively. For the full year, income from continuing they provide tremendous executive bench strength and ensure a
operations grew 29 percent to $1.3 billion, while diluted income continuum of leadership for the future.
per share from continuing operations of $4.39 was 30 percent
This past year was a critical one for management succession at
higher than the prior year.
ITW. Following my announced decision to retire in 2006, David
Despite raw material shor tages and the escalating price of steel Speer was appointed president of ITW in August 2004. David is
in Nor th America, total company operating margins rose to 17.5 expected to become CEO in 2005. Formerly an Executive Vice
percent—a 120-basis-point gain year over year. The improvement President for ITW Construction, Wilsonart and Finishing, David has held
came even though margins were diluted over the shor t term by the progressively more responsible operating positions since first joining
acquisition of 24 companies during the year, representing nearly the company in 1978. He currently has operating responsibility for
$624 million of annualized revenues. Free operating cash flow all ITW businesses worldwide. Your board of directors believes
increased to $1.3 billion, up from $1.2 billion in 2003, while our David will do an outstanding job leading ITW for ward.
25-YEAR TRACK RECORD Revenue: 15% CAGR EPS: 13% CAGR ROIC: 15% Shareholder Return: 20%
$ 12,000
$ 10,000
$ 8,000
Revenue (in millions)
$ 6,000
$ 4,000
$ 2,000
$ 0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
28
31. In a related appointment, Craig Hindman was elected to the newly The depth and breadth of management talent is one of your company’s
created position of Executive Vice President of Wilsonart, a business greatest strengths. Cultivating homegrown leaders and taking a
line previously managed in tandem with ITW Construction. Craig disciplined approach to succession planning help ensure continuity
has spent the last 29 years at ITW and ser ved most recently as and a commitment to excellence going for ward.
president of our global finishing businesses.
A BRIGHT FUTURE
Two other key members of the management team plan to retire in Disciplined attention to financial per formance, management
2005. A 29-year veteran of ITW, Vice Chairman Frank Ptak has strength, product development and acquisition activity has made
relinquished his duties as head of our welding business units. He your company stronger today than ever before. Staying disciplined
has been succeeded by newly elected Executive Vice President and focusing on our operational goals—growing base revenues,
Scott Santi, who has spent his entire 22-year career at ITW—most making value-adding acquisitions and improving operating margins—
recently as President of Welding Products Focus Markets Group. will make it even stronger in the future.
Jon Kinney also will be retiring as Chief Financial Officer in the second
In 2004, as always, we owed our success to the ongoing suppor t
half of 2005 after 32 years of ser vice at ITW. Your company is
of our many long-term customers, suppliers and shareholders. We
currently assessing internal candidates to fill his position. Frank
also appreciate and thank our 49,000 employees around the world
and Jon will be with us for much of 2005, but we want to thank both
for their effor ts and exper tise. All of us at ITW remain dedicated
of them for their friendship and their significant contributions to the
to delivering superior results today and creating exciting growth
company over the years. We wish them the ver y best.
oppor tunities for tomorrow.
Lastly, we want to extend our thanks and best wishes to Jim
Ringler, who retired at the end of 2004 after more than 15 years
with the company. As Vice Chairman and head of our food equipment
business, Jim came to us with the 1999 Premark acquisition and
made significant contributions to ITW during his tenure. He has FRANK S. PTAK
W. JAMES FARRELL
Vice Chairman
Chairman and
been succeeded by newly elected Executive Vice President Jack
Chief Executive Officer
Campbell. A 24-year veteran of ITW, Jack brings strong operational
exper tise to this position thanks to his wide range of experience
within the company, including his most recent assignment as head FEBRUARY 11, 2005
of the marking and decorating businesses.
Operating Income (in thousands)
$ 2,500
$ 2,000
$ 1,500
$ 1,000
$ 500
$ 0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
29
32. FINANCIAL TABLE OF CONTENTS
Management’s Discussion and Analysis 31
For ward-Looking Statements 49
Management Repor t on Internal Control Over Financial Repor ting 50
Repor t of Independent Registered Public Accounting Firm 51
Statement of Income 52
Statement of Income Reinvested in the Business 52
Statement of Comprehensive Income 52
Statement of Financial Position 53
Statement of Cash Flows 54
Notes to Financial Statements 55
Quar terly and Common Stock Data 77
Eleven-Year Financial Summar y 78
30
33. Management’s Discussion and Analysis
INTRODUCTION
Illinois Tool Works Inc. (the “Company” or “ITW”) is a worldwide manufacturer of highly engineered products and specialty systems.
The Company has approximately 650 operations in 45 countries which are aggregated and organized for internal reporting purposes
into the following five segments: Engineered Products—Nor th America; Engineered Products—International; Specialty Systems—
Nor th America; Specialty Systems—International; and Leasing and Investments. These segments are described below.
Due to the large number of diverse businesses and the Company’s highly decentralized operating style, the Company does not
require its business units to provide detailed information on operating results. Instead, the Company’s corporate management collects
data on a few key measurements: operating revenues, operating income, operating margins, overhead costs, number of months on
hand in inventory, past due receivables, return on invested capital and cash flow. These key measures are monitored by management
and significant changes in operating results versus current trends in end markets and variances from forecasts are discussed with
operating unit management.
The results of each segment are analyzed by identifying the effects of changes in the results of the base businesses, newly
acquired companies, currency translation, restructuring costs, and goodwill and intangible impairment charges on the operating
revenues and operating income of each segment. Base businesses are those businesses that have been included in the Company’s
results of operations for more than a year. The changes to base business operating income include the estimated effects of both
operating leverage and changes in variable margins and overhead costs. Operating leverage is the estimated effect of the base
business revenue changes on operating income, assuming variable margins remain the same as the prior period. As manufacturing
and administrative overhead costs do not significantly change as a result of revenues increasing or decreasing, the percentage
change in operating income due to operating leverage is more than the percentage change in the base business revenues.
A key element of the Company’s business strategy is its continuous 80/20 business process. The basic concept of this 80/20
business process is to focus on what is most impor tant (the 20% of the items which account for 80% of the value) and to spend
less time and resources on the less important (the 80% of the items which account for 20% of the value). The Company’s operations
use this 80/20 business process to simplify and focus on the key par ts of their business, and as a result, reduce complexity that
often disguises what is truly impor tant. Each of the Company’s 650 operations utilizes the 80/20 process in all aspects of their
business. Common applications of the 80/20 business process include:
• Simplifying manufactured product lines by reducing the number of products offered by combining the features of similar products,
outsourcing products or, as a last resor t, eliminating products.
• Simplifying the customer base by focusing on the 80/20 customers and finding different ways to ser ve the 20/80 customers.
• Simplifying the supplier base by par tnering with key 80/20 suppliers and reducing the number of 20/80 suppliers.
• Designing business processes and systems around the key 80/20 activities.
The result of the application of this 80/20 business process is that the Company improves its operating and financial performance.
These 80/20 effor ts often result in restructuring projects that reduce costs and improve margins. Corporate management works
closely with those business units that have operating results below expectations to help those units apply this 80/20
business process and improve their results.
CONSOLIDATED RESULTS OF OPERATIONS
The Company’s consolidated results of operations for 2004, 2003 and 2002 are summarized as follows:
DOLLARS IN THOUSANDS 2004 2003 2002
Operating revenues $ 11,731,425 $ 10,035,623 $ 9,467,740
Operating income 2,056,613 1,633,458 1,505,771
Margin % 17.5% 16.3% 15.9%
31
34. In 2004 and 2003, the changes in revenues, operating income and operating margins over the prior year were primarily due to the
following factors:
2004 COMPARED TO 2003 2003 COMPARED TO 2002
% POINT INCREASE % POINT INCREASE
% INCREASE (DECREASE) (DECREASE) % INCREASE (DECREASE) (DECREASE)
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
REVENUES INCOME MARGINS REVENUES INCOME MARGINS
Base manufacturing business:
Revenue change/Operating leverage 8.1% 20.3% 1.8% (1.8)% (4.5)% (0.4)%
Changes in variable margins and
overhead costs — (3.2) (0.5) — 3.9 0.7
Total 8.1 17.1 1.3 (1.8) (0.6) 0.3
Acquisitions and divestitures 5.0 2.4 (0.4) 2.9 1.7 (0.2)
Translation 4.4 4.3 (0.1) 5.5 4.9 (0.1)
Restructuring costs — 2.3 0.4 — 0.2 —
Impairment of goodwill and intangibles — (1.1) (0.2) — 0.2 —
Leasing and Investments — 0.9 0.1 (0.3) 2.1 0.4
Other (0.6) — 0.1 (0.3) — —
16.9% 25.9% 1.2% 6.0% 8.5% 0.4%
Operating Revenues
The total company base business revenue increase in 2004 versus 2003 is primarily related to a 9% revenue increase in Nor th
American base business revenue. Industrial production levels in Nor th America improved over the prior year’s sluggish levels. This
improvement was evident in both the Nor th American Specialty Systems and Engineered Products segments. Internationally, base
business revenues increased 6% in 2004 over 2003 as a result of increased penetration in European industrial markets despite
an only slightly improved European economic environment.
The total company base business revenue decrease in 2003 versus 2002 is primarily related to a 2% and 1% decline in Nor th
American and international base business revenues, respectively. In Nor th America, industrial production activity showed modest
improvement over the prior year, most of which occurred in the fourth quarter of 2003. Despite this improvement, capacity utilization
and capital spending remained weak. Internationally, overall business conditions were flat, as indicated by low industrial production
in the major European economies.
Operating Income
Operating income in 2004 improved over 2003 primarily due to leverage from the growth in base business revenue, the favorable
effect of foreign currency translation, lower restructuring costs and income from acquired companies. These improvements were
partially offset by higher raw material costs, increased overhead costs and higher impairment charges.
Operating income in 2003 improved over 2002, primarily due to favorable currency translation, acquisition income and operational
cost savings as evidenced by a 50 basis point improvement in variable margin. Leasing and Investments income improved over the
prior year primarily due to a $32 million impairment charge related to aircraft leases in 2002. These increases were par tially offset
by the negative effect of leverage from the decline in base revenue described above.
ENGINEERED PRODUCTS—NORTH AMERICA SEGMENT
Businesses in this segment are located in Nor th America and manufacture a variety of shor t lead-time plastic and metal components
and fasteners, as well as specialty products for a diverse customer base. These commercially oriented, value-added products
become par t of the customers’ products and typically are manufactured and delivered in a time period less than 30 days.
In the plastic and metal components and fasteners categor y, products include:
• metal fasteners, fastening tools, and metal plate connecting components for the commercial and
residential construction industries;
• laminate products for the commercial and residential construction industries and furniture markets;
• metal fasteners for automotive, appliance and general industrial applications;
• metal components for automotive, appliance and general industrial applications;
• plastic components for automotive, appliance, furniture and electronics applications; and
• plastic fasteners for automotive, appliance and electronics applications.
32
35. In the specialty products categor y, products include:
reclosable packaging for consumer food applications;
•
swabs, wipes and mats for clean room usage in the electronics and pharmaceutical industries;
•
hand wipes for industrial purposes;
•
chemical fluids which clean or add lubrication to machines;
•
adhesives for industrial, construction and consumer purposes;
•
epoxy and resin-based coating products for industrial applications;
•
components for industrial machines; and
•
manual and power operated chucking equipment for industrial applications.
•
In 2004, this segment primarily ser ved the construction (47%), automotive (29%) and general industrial (9%) markets.
The results of operations for the Engineered Products—Nor th America segment for 2004, 2003 and 2002 were as follows:
DOLLARS IN THOUSANDS 2004 2003 2002
Operating revenues $ 3,314,093 $ 3,053,961 $ 3,034,734
Operating income 552,985 489,416 533,459
Margin % 16.7% 16.0% 17.6%
In 2004 and 2003, the changes in revenues, operating income and operating margins over the prior year were primarily due to the
following factors:
2004 COMPARED TO 2003 2003 COMPARED TO 2002
% POINT INCREASE % POINT INCREASE
% INCREASE (DECREASE) (DECREASE) % INCREASE (DECREASE) (DECREASE)
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
REVENUES INCOME MARGINS REVENUES INCOME MARGINS
Base manufacturing business:
Revenue change/Operating leverage 7.0% 18.3% 1.7% (2.5)% (5.9)% (0.6)%
Changes in variable margins and
overhead costs — (7.0) (1.0) — (2.2) (0.4)
Total 7.0 11.3 0.7 (2.5) (8.1) (1.0)
Acquisitions and divestitures 1.3 0.8 (0.1) 3.0 1.1 (0.3)
Translation 0.2 0.2 — 0.3 0.2 —
Restructuring costs — 2.0 0.3 — (1.4) (0.2)
Impairment of goodwill and intangibles — (1.3) (0.2) — (0.1) (0.1)
Other — — — (0.2) — —
8.5% 13.0% 0.7% 0.6% (8.3)% (1.6)%
Operating Revenues
Revenues increased in 2004 over 2003 primarily due to higher base business revenues and revenues from acquisitions. The base
revenue increase was a result of stronger end market demand and price increases that par tially offset raw material cost increases.
Construction base business revenues increased 9% in 2004 as a result of growth in the residential remodeling/rehab and
commercial construction markets. As a result of increased penetration, automotive base revenues were flat in 2004 despite a 4%
decline in automotive production at the large domestic automotive manufacturers. Revenues from the other industrial base businesses
in this segment grew 11% in 2004 as they benefited from increased demand in a broad array of end markets.
Revenues increased in 2003 compared with 2002 due mainly to revenues from acquisitions, par tially offset by lower base business
revenues. In 2003, construction base business revenues decreased 2% versus 2002 as a result of a slow down in the commercial
and residential construction markets during the first half of the year. Automotive base business revenues declined 4% due to a 6%
decline in automotive production at the large domestic automotive manufacturers in 2003. Revenues from the other businesses in
this segment declined 2% in 2003 due to sluggishness in the various industrial and commercial markets that these businesses serve.
33
36. Operating Income
Operating income increased in 2004 over 2003 primarily due to leverage from the growth in base business revenues described
above, lower restructuring costs and income from acquisitions. These increases were par tially offset by base business variable
margin declines of 40 basis points, primarily due to steel cost increases. In addition, income in 2004 was negatively impacted by
a $9 million charge associated with a warranty issue related to a discontinued product at the Wilsonar t business. Also partially
offsetting the base business increases were first quarter 2004 goodwill and impairment charges of $7 million, primarily related to the
goodwill of a U.S. electrical components business and the trademarks and brands of a U.S. manufacturer of clean room mats.
Operating income declined in 2003 over 2002 primarily due to the negative effect of leverage from the decline in 2003 base business
revenues described above, increased restructuring expense and higher corporate-related expenses primarily associated with
pensions, restricted stock and medical benefits. Par tially offsetting these declines was income from acquisitions.
ENGINEERED PRODUCTS — INTERNATIONAL SEGMENT
Businesses in this segment are located outside Nor th America and manufacture a variety of shor t lead-time plastic and metal
components and fasteners, as well as specialty products for a diverse customer base. These commercially oriented, value-added
products become part of the customers’ products and typically are manufactured and delivered in a time period less than 30 days.
In the plastic and metal components and fastener categor y, products include:
• metal fasteners, fastening tools, and metal plate connecting components for the commercial and
residential construction industries;
• laminate products for the commercial and residential construction industries and furniture markets;
• metal fasteners for automotive, appliance and general industrial applications;
• metal components for automotive, appliance and general industrial applications;
• plastic components for automotive, appliance and electronics applications; and
• plastic fasteners for automotive, appliance and electronics applications.
In the specialty products categor y, products include:
• electronic component packaging trays used for the storage, shipment and manufacturing inser tion of electronic components
and microchips;
• swabs, wipes and mats for clean room usage in the electronics and pharmaceutical industries;
• adhesives for industrial, construction and consumer purposes;
• chemical fluids which clean or add lubrication to machines;
• epoxy and resin-based coating products for industrial applications; and
• manual and power operated chucking equipment for industrial applications.
In 2004, this segment primarily ser ved the construction (37%), automotive (30%), and general industrial (15%) markets.
The results of operations for the Engineered Products—International segment for 2004, 2003 and 2002 were as follows:
DOLLARS IN THOUSANDS 2004 2003 2002
Operating revenues $ 2,465,941 $ 1,873,767 $ 1,566,387
Operating income 369,188 260,701 212,824
Margin % 15.0% 13.9% 13.6%
34
37. In 2004 and 2003, the changes in revenues, operating income and operating margins over the prior year were primarily due to the
following factors:
2004 COMPARED TO 2003 2003 COMPARED TO 2002
% POINT INCREASE % POINT INCREASE
% INCREASE (DECREASE) (DECREASE) % INCREASE (DECREASE) (DECREASE)
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
REVENUES INCOME MARGINS REVENUES INCOME MARGINS
Base manufacturing business:
Revenue change/Operating leverage 7.3% 21.0% 1.8% 2.3% 6.7% 0.6%
Changes in variable margins and
overhead costs — (0.2) — — (0.1) —
Total 7.3 20.8 1.8 2.3 6.6 0.6
Acquisitions and divestitures 12.5 8.8 (0.6) 1.5 1.3 —
Translation 11.8 13.9 0.1 15.8 17.9 0.2
Restructuring costs — 1.4 0.2 — (3.4) (0.5)
Impairment of goodwill and intangibles — (3.3) (0.4) — 0.1 —
31.6% 41.6% 1.1% 19.6% 22.5% 0.3%
Operating Revenues
Revenues increased in 2004 over 2003 due to contributions from acquisition, increased base business revenues and the favorable
effect of currency translation primarily as a result of the euro strengthening versus the U.S. dollar. The acquisition revenue is
primarily related to the acquisitions of an Australian construction business and a European polymer business in the first quar ter
of 2004 and two European fluid product businesses in the second quar ter of 2004. Base business construction revenues
increased 8% in 2004 due to a rise in commercial construction activity in Europe, as well as increased commercial and residential
demand in the Australasia region. Automotive base revenues grew 7% primarily due to increased product penetration at the
European automotive manufacturers. The other businesses in the segment serve a broad array of industrial and commercial markets,
and revenues from these businesses increased 6% in 2004.
Revenues increased in 2003 over 2002 mainly due to the favorable effect of currency translation, primarily the euro. Base business
construction revenues increased 2% in 2003 mainly due to an increase in commercial construction activity in Europe as well as
commercial and residential construction activity in the Australasia region. Automotive base revenues increased 2% and revenues
in the other base businesses grew 3% in 2003.
Operating Income
Operating income increased in 2004 over 2003 primarily due to leverage from the increase in base business revenues described
above, the favorable effect of currency translation, income from acquisitions and lower restructuring expense. Par tially offsetting
the above income increases was a goodwill impairment charge of $8.5 million incurred in the first quar ter of 2004. This impact
primarily was related to the diminished cash flow expectations of a European automotive components business.
Operating income increased in 2003 over 2002 primarily due to favorable currency translation, increased base business income
due to operating leverage and income from the acquisitions. These increases were par tially offset by higher restructuring expenses.
SPECIALTY SYSTEMS — NORTH AMERICA SEGMENT
Businesses in this segment are located in Nor th America and design and manufacture longer lead-time machiner y and related
consumables, as well as specialty equipment for a diverse customer base. These commercially oriented, value-added products
become par t of the customers’ processes and typically are manufactured and delivered in a time period more than 30 days.
In the machiner y and related consumables categor y, products include:
• industrial packaging equipment and plastic and steel strapping for the bundling and shipment of a variety of products for
customers in numerous end markets;
• welding equipment and metal consumables for a variety of end market users;
• equipment and plastic consumables that multi-pack cans and bottles for the food and beverage industr y;
• plastic stretch film and related packaging equipment for various industrial purposes;
• paper and plastic products used to protect shipments of goods in transit;
• marking tools and inks for various end users; and
• foil and film and related equipment used to decorate a variety of consumer products.
35
38. In the specialty equipment categor y, products include:
• commercial food equipment such as dishwashers, refrigerators, mixers, ovens, food slicers and specialty scales for use
by restaurants, institutions and supermarkets;
• paint spray equipment for a variety of general industrial applications;
• static control equipment for electronics and industrial applications;
• wheel balancing and tire uniformity equipment used in the automotive industr y; and
• airpor t ground power generators for commercial and militar y applications.
In 2004, this segment primarily ser ved the food institutional and retail (25%), general industrial (23%), construction (13%), and
food and beverage (8%) markets.
The results of operations for the Specialty Systems—Nor th America segment for 2004, 2003 and 2002 were as follows:
DOLLARS IN THOUSANDS 2004 2003 2002
Operating revenues $ 3,862,556 $ 3,365,219 $ 3,357,504
Operating income 688,303 549,038 509,299
Margin % 17.8% 16.3% 15.2%
In 2004 and 2003, the changes in revenues, operating income and operating margins over the prior year were primarily due to the
following factors:
2004 COMPARED TO 2003 2003 COMPARED TO 2002
% POINT INCREASE % POINT INCREASE
% INCREASE (DECREASE) (DECREASE) % INCREASE (DECREASE) (DECREASE)
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
REVENUES INCOME MARGINS REVENUES INCOME MARGINS
Base manufacturing business:
Revenue change/Operating leverage 11.3% 29.2% 2.6% (2.1)% (5.8)% (0.6)%
Changes in variable margins and
and overhead costs — (5.3) (0.8) — 7.0 1.1
Total 11.3 23.9 1.8 (2.1) 1.2 0.5
Acquisitions and divestitures 3.1 1.3 (0.3) 2.0 1.3 (0.1)
Translation 0.4 0.4 — 0.5 0.6 —
Restructuring costs — 0.2 0.1 — 5.4 0.8
Impairment of goodwill and intangibles — (0.4) (0.1) — (0.7) (0.1)
Other — — — (0.2) — —
14.8% 25.4% 1.5% 0.2% 7.8% 1.1%
Operating Revenues
Revenues increased in 2004 over 2003 due to increased base business revenues and revenues from acquisitions. The base revenue
increase was a result of stronger end market demand and price increases that par tially offset raw material cost increases. Base
business revenue growth in 2004 is primarily due to an increase in demand in most of the end markets that this segment ser ves.
Welding base revenues increased 27%, industrial packaging base revenues grew 11%, food equipment base revenues increased
2% and base revenues in the other businesses in this segment increased 9%.
Revenues increased slightly in 2003 versus 2002 as revenues from acquisitions were offset by lower base business revenues.
Base business revenues declined in 2003 as a result of low capacity utilization in the various markets this segment ser ves, which
resulted in slow demand for capital equipment. In addition, low industrial production activity reduced demand for consumable products.
The lower market demand for the year was reflected in declines in food equipment revenue of 8%, industrial packaging revenue of
1% and other base business revenue of 5%. These declines were par tially offset by an increase in welding revenues of 2%.
Operating Income
Operating income increased in 2004 over 2003 primarily due to leverage from the base business revenue increases described
above. Additionally, income from acquisitions increased income in 2004. However, variable margins declined 60 basis points
in 2004 primarily due to steel raw material cost increases. Additionally, income was adversely impacted in 2004 due to goodwill
and intangible asset impairment charges of $6 million incurred in the first quar ter of 2004. These charges were primarily related
to the diminished cash flow expectations at two welding businesses and an industrial packaging unit.
36
39. Operating income increased in 2003 versus 2002 primarily due to lower base business costs and reduced restructuring expenses.
Variable margins increased 40 basis points in 2003 as a result of cost reductions related to prior years’ restructuring activity and
the continued benefits of the 80/20 business process. These improvements were offset by higher corporate-related expenses
primarily related to pensions, restricted stock, and employee health and welfare. Income was also negatively impacted by the effect
of leverage from the base business declines described above.
SPECIALTY SYSTEMS — INTERNATIONAL SEGMENT
Businesses in this segment are located outside Nor th America and design and manufacture longer lead-time machiner y and related
consumables, as well as specialty equipment for a diverse customer base. These commercially oriented, value-added products
become par t of the customers’ processes and typically are manufactured and delivered in a time period more than 30 days.
In the machiner y and related consumables categor y, products include:
• industrial packaging equipment and plastic and steel strapping for the bundling and shipment of a variety of products for
customers in numerous end markets;
• welding equipment and metal consumables for a variety of end market users;
• equipment and plastic consumables that multi-pack cans and bottles for the food and beverage industr y;
• plastic bottle sleeves and related equipment for the food and beverage industr y;
• plastic stretch film and related packaging equipment for various industrial purposes;
• paper and plastic products used to protect shipments of goods in transit; and
• foil and film and related equipment used to decorate a variety of consumer products.
In the specialty equipment categor y, products include:
• commercial food equipment such as dishwashers, refrigerators, mixers, ovens, food slicers and specialty scales for use by
restaurants, institutions and supermarkets;
• paint spray equipment for a variety of general industrial applications;
• static control equipment for electronics and industrial applications; and
• airpor t ground power generators for commercial applications.
In 2004, this segment primarily ser ved the general industrial (29%), food institutional and retail (21%), and food and beverage
(13%) markets.
The results of operations for the Specialty Systems—International segment for 2004, 2003 and 2002 were as follows:
DOLLARS IN THOUSANDS 2004 2003 2002
Operating revenues $ 2,375,189 $ 1,967,630 $ 1,693,042
Operating income 314,535 217,366 164,656
Margin % 13.2% 11.0% 9.7%
In 2004 and 2003, the changes in revenues, operating income and operating margins over the prior year were primarily due to the
following factors:
2004 COMPARED TO 2003 2003 COMPARED TO 2002
% POINT INCREASE % POINT INCREASE
% INCREASE (DECREASE) (DECREASE) % INCREASE (DECREASE) (DECREASE)
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
REVENUES INCOME MARGINS REVENUES INCOME MARGINS
Base manufacturing business:
Revenue change/Operating leverage 4.2% 14.3% 1.1% (3.4)% (12.8)% (1.0)%
Changes in variable margins and
overhead costs — 3.8 0.4 — 21.5 2.2
Total 4.2 18.1 1.5 (3.4) 8.7 1.2
Acquisitions and divestitures 6.1 2.5 (0.5) 5.0 6.5 0.1
Translation 10.4 13.1 — 14.7 18.7 0.2
Restructuring costs — 11.1 1.2 — (6.4) (0.6)
Impairment of goodwill and intangibles — (0.1) — — 4.5 0.4
Other — — — (0.1) — —
20.7% 44.7% 2.2% 16.2% 32.0% 1.3%
37
40. Operating Revenues
Revenues increased in 2004 over 2003 mainly due to favorable currency translation, primarily as a result of the euro strengthening
versus the U.S. dollar. Revenues also grew due to acquisitions, including a second quarter 2003 acquisition of an Asian manufacturer
of welding consumables. Base business revenues increased as demand increased in most end markets that this segment ser ves.
Industrial packaging base revenues grew 5%, food equipment base business revenues grew 2%, and other base business revenues,
including welding and finishing, increased 3%.
Revenues increased in 2003 versus 2002 primarily due to acquisitions and favorable currency translation, which was tied to the
rise in the euro. Base business revenues declined primarily as a result of slow European industrial production. Industrial packaging
revenues decreased 4%, food equipment revenues decreased 1%, and other base business revenues in this segment declined 3%.
Operating Income
Operating income increased in 2004 versus 2003 primarily as a result of leverage from higher base business revenues, lower
restructuring expenses, the favorable effect of currency translation and income from acquisitions. In addition, variable margins
improved 60 basis points reflecting the benefits of past restructuring effor ts.
Operating income increased in 2003 versus 2002 mainly due to the favorable effect of currency translation and income from
acquired companies. In addition, operational cost savings related to prior years’ restructuring programs increased operating
income, reflected in a 110 basis point increase in variable margin. In addition, income was higher in 2003 due to a goodwill asset
impairment charge of approximately $7 million related to industrial packaging businesses in Australia and Asia which was incurred
in 2002. Par tially offsetting these increases in income was increased restructuring expense in 2003.
LEASING AND INVESTMENTS SEGMENT
Businesses in this segment make investments in mor tgage entities, leases of telecommunications, aircraft, air traffic control and
other equipment, proper ties, affordable housing and a venture capital fund. As a result of the Company’s strong cash flow, the
Company has historically had excess funds to make oppor tunistic investments that meet the Company’s desired returns. See the
Investments note for a detailed discussion of the accounting policies for the various investments in this segment.
The results of operations for the Leasing and Investments segment for 2004, 2003 and 2002 were as follows:
IN THOUSANDS 2004 2003 2002
Operating revenues $ 148,791 $ 152,585 $ 181,570
Operating income 131,602 116,937 85,533
Operating income (loss) by investment for the years ended December 31, 2004, 2003 and 2002 was as follows:
IN THOUSANDS 2004 2003 2002
Mor tgage investments $ 72,270 $ 72,570 $ 83,357
Leases of equipment 23,294 23,744 (6,658)
Proper ty developments 7,440 10,398 6,583
Proper ties held for sale 4,177 (3,044) 5,532
Venture capital limited par tnership 18,211 (924) (3,588)
Other 6,210 14,193 307
$ 131,602 $ 116,937 $ 85,533
The net assets attributed to the Leasing and Investments segment at December 31, 2004 and 2003 are summarized by investment
type as follows:
IN THOUSANDS 2004 2003
Mor tgage investments $ 376,194 $ 244,957
Leases of equipment (14,821) 3,946
Proper ty developments 24,831 19,885
Proper ties held for sale 21,602 33,711
Affordable housing limited par tnerships 7,110 (5,821)
Other, net 49,344 18,277
$ 464,260 $ 314,955
38
41. The net assets attributed to the Leasing and Investments segment as of December 31, 2004 and 2003 were as follows:
IN THOUSANDS 2004 2003
Investments $ 912,483 $ 832,358
Deferred tax assets 201,954 198,166
Allocated general corporate debt (78,991) (198,945)
Deferred tax liabilities (335,391) (295,150)
Affordable housing capital obligations (94,657) (117,838)
Preferred stock of subsidiaries (60,000) (60,000)
Accrued dividends on preferred stock of subsidiaries (32,700) (28,580)
Other, net (48,438) (15,056)
$ 464,260 $ 314,955
A por tion of the Company’s general corporate debt has been attributed to the various investments of the Leasing and Investments
segment based on the net cumulative after-tax cash investments in the applicable projects.
Mortgage Investments
In 1995, 1996 and 1997, the Company, through its investments in separate mor tgage entities, acquired pools of mor tgage-related
assets in exchange for aggregate nonrecourse notes payable of $739.7 million, preferred stock of subsidiaries of $60 million and
cash of $240 million. The mor tgage-related assets acquired in these transactions relate to office buildings, apar tment buildings
and shopping malls located throughout the United States and included four variable-rate balloon loans and 24 proper ties at
December 31, 2004. In conjunction with these transactions, the mor tgage entities simultaneously entered into ten-year swap
agreements and other related agreements whereby a third par ty receives the por tion of the interest and net operating cash flow
from the mortgage-related assets in excess of $26 million per year and a portion of the proceeds from the disposition of the mortgage-
related assets and principal repayments, in exchange for the third par ty making the contractual principal and interest payments on
the nonrecourse notes payable. In addition, in the event that the pools of mor tgage-related assets do not generate interest and
net operating cash flow of $26 million a year, the Company has the right to receive the shor tfall from the cash flow generated by
three separate pools of mor tgage-related assets (owned by third par ties in which the Company has minimal interests), which the
swap counter par ty has estimated to have a total fair value of approximately $1.1 billion at December 31, 2004.
The mor tgage entities entered into the swaps and other related agreements in order to reduce the Company’s real estate, credit
and interest rate risks relative to its net mor tgage investments. The swap counter par ty has assumed the majority of the real estate
and credit risk related to the commercial mor tgage loans and real estate, and has assumed all of the interest rate risk related to
the nonrecourse notes payable.
On July 1, 2003, the Company adopted FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”) relative
to its investments in mor tgage entities. See the Investments note for fur ther discussion of the change in accounting for these
investments.
Income (loss) from mor tgage investments consisted of the following components for the years ended December 31, 2004, 2003
and 2002:
IN THOUSANDS 2004 2003 2002
Equity income from mor tgage investments $ 81,030 $ 23,298 $ —
Commercial mor tgage loans — 623 (7,584)
Commercial real estate — (11,852) (11,498)
Net swap receivables — 69,547 116,003
Deferred mor tgage investment income — 15,362 30,723
Interest expense on nonrecourse debt — (18,696) (39,629)
Interest expense on allocated debt (3,582) (1,027) (1,465)
Preferred stock dividend expense (4,120) (4,120) (4,120)
Other (1,058) (565) 927
$ 72,270 $ 72,570 $ 83,357
In 2004, mortgage investment income was flat versus 2003 as gains on sales of properties in 2004 of $45.3 million were essentially
offset by the net income recorded in the first half of 2003 before the adoption of FIN 46, primarily related to a $39 million favorable
swap mark-to-market adjustment in the second quar ter of 2003.
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42. In 2003, mor tgage investment income declined primarily due to lower swap mark-to-market income versus 2002. In the second
quar ter of 2003, favorable swap mark-to-market adjustments of $39 million were recorded, primarily due to lower market interest
rates and lower estimated future cash flows from the related mortgage loans and real estate. As a result of the adoption of FIN 46
relative to the mor tgage investments, star ting in the third quar ter of 2003 and for future periods, income for the net mor tgage
investments was accounted for under the equity method, without any future mark-to-market adjustments. Accordingly, activity attributed
to commercial mor tgage loans, real estate, swap receivables, deferred mor tgage investment income and nonrecourse debt was
recorded only for the first six months of 2003.
The Company’s net assets related to mor tgage investments as of December 31, 2004 and 2003 were as follows:
IN THOUSANDS 2004 2003
Net equity investments in mor tgage entities $ 380,465 $ 325,435
Deferred tax assets 106,722 51,293
Allocated general corporate debt (18,422) (43,437)
Preferred stock of subsidiaries (60,000) (60,000)
Accrued dividends on preferred stock of subsidiaries (32,700) (28,580)
Other, net 129 246
$ 376,194 $ 244,957
As shown below, the amount of future cash flows which is greater than the Company’s net equity investments in mor tgage entities
at December 31, 2004 will be recorded as income during the remaining terms of the transactions:
MORTGAGE MORTGAGE MORTGAGE
TRANSACTION TRANSACTION TRANSACTION
ENDING ENDING ENDING
DECEMBER 31, DECEMBER 31, FEBRUARY 28,
IN THOUSANDS 2005 2006 2008 TOTAL
ITW’s estimated share of future cash flows:
Annual operating cash flows $ 4,500 $ 9,000 $ 20,000 $ 33,500
Disposition proceeds 146,504 147,336 165,900 459,740
151,004 156,336 185,900 493,240
Net equity investments in mor tgage entities at December 31, 2004 120,854 118,456 141,155 380,465
Future income expected to be recorded $ 30,150 $ 37,880 $ 44,745 $ 112,775
The Company believes that because the swaps’ counter par ty is AAA-rated, there is minimal risk that the nonrecourse notes payable
of the mor tgage entities will not be repaid by the swap counter par ty. In addition, because significant assets back the total annual
cash flow, the Company believes its risk of not receiving the $33.5 million of cumulative annual operating cash flows is also minimal.
Under the terms of the servicing agreements, the swap counter party, upon sale of the mortgage loans and real estate by the mortgage
entities, is entitled to receive most of the disposition proceeds in excess of specified levels. Currently, the projected disposition
proceeds exceed the levels specified. Fur thermore, the disposition value of cer tain proper ties has been guaranteed by the swap
counter par ty to be at least equal to their original cost. As such, modest fluctuations in the market values of the mor tgage loans
and real estate held by the mor tgage entities are expected to largely impact the swap counter par ty rather than ITW.
To illustrate the extent to which the Company’s risk related to its share of the disposition proceeds has been mitigated, the effects
of decreases in the estimated disposition proceeds at December 31, 2004 are shown below:
DISPOSITION PROCEEDS
FUTURE ITW
ITW’S SWAP COUNTER INCOME TO BE
IN THOUSANDS SHARE PARTY’S SHARE TOTAL RECOGNIZED
Current estimate $ 459,740 $ 522,684 $ 982,424 $ 112,775
10% reduction in disposition proceeds 447,162 437,019 884,181 100,197
20% reduction in disposition proceeds 417,004 368,935 785,939 70,039
30% reduction in disposition proceeds 392,233 295,463 687,696 45,268
If the swap counter party is unable to sell all of the commercial loans and real estate by the end of the tenth year for each transaction,
the Company will begin receiving all of the annual operating cash flow from the remaining assets. Accordingly, the Company believes
that it is unlikely that the assets will not be sold within the ten-year term of each transaction.
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43. Leases of Equipment
Income (loss) from leases of equipment consisted of the following components for the years ended December 31, 2004, 2003 and
2002:
IN THOUSANDS 2004 2003 2002
Telecommunications equipment $ 11,214 $ 17,393 $ 15,759
Air traffic control equipment 9,211 2,419 —
Aircraft 2,129 3,488 (22,968)
Other 740 444 551
$ 23,294 $ 23,744 $ (6,658)
The Company’s net assets related to investments in leases of equipment at December 31, 2004 and 2003 were as follows:
IN THOUSANDS 2004 2003
Investments in leases:
Telecommunications equipment $ 193,306 $ 181,370
Air traffic control equipment 61,757 51,395
Aircraft 44,020 45,388
Manufacturing equipment 3,404 5,390
Railcars — 499
Deferred tax liabilities (245,723) (151,414)
Allocated general corporate debt (69,578) (126,597)
Other, net (2,007) (2,085)
$ (14,821) $ 3,946
In the third quar ter of 2003, the Company entered into a leveraged lease transaction related to air traffic control equipment in
Australia with a cash investment of $48.8 million. In the first half of 2002, the Company entered into leveraged leasing transactions
related to mobile telecommunications equipment with two major European telecommunications companies with cash investments
of $144.7 million. Under the terms of the telecommunications and air traffic control lease transactions, the lessees have made
upfront payments to creditworthy 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 can recover its net investment from the payment under takers. In
addition, the lessees are required to purchase residual value insurance from a creditwor thy third par ty at a date near the end of
the lease term. As a result of the payment under taker arrangements and the residual value insurance, the Company believes that
any credit and residual value risks related to the telecommunications and air traffic control leases have been significantly mitigated.
In 2004, lease income was essentially flat compared to 2003 as higher income from the new air traffic control lease was offset
by lower income from the telecommunications leases. In 2003, income from leases increased significantly from 2002 due to a
2002 impairment charge of $31.6 million related to aircraft leases, as well as the new air traffic control and telecommunications
leases. The impairment charge related to the Company’s investments in aircraft leased to United Airlines, which declared bankruptcy
in December 2002. Of this impairment charge, $28.6 million related to a direct financing lease of a Boeing 757 aircraft. This
charge was estimated based on the reduced lease payments that United Airlines agreed to pay in the future versus the Company’s
lease receivable under the existing lease agreement. Although some credit risk exists relating to the remaining investments in aircraft
due to financial difficulties and overcapacity in the airline industr y, the Company believes that its net remaining investments of
$44.0 million at December 31, 2004 will be realizable as sufficient collateral exists in the event of default by the lessees.
Other Investments
Income from proper ty developments was $7.4 million in 2004 compared to $10.4 million in 2003 and $6.6 million in 2002 as a
result of more residential home sales in 2003 than either 2004 or 2002.
Income from proper ties held for sale was higher in 2004 versus 2003 due to net gains of $8.2 million on the sale of eight former
manufacturing facilities in 2004 versus net gains of $1.2 million on the sale of four proper ties in 2003 and a 2003 asset writedown
of $1.2 million. Income related to proper ties held for sale was lower in 2003 compared with 2002 primarily due to a gain on the
sale of a Chicago-area proper ty of $7.4 million in 2002.
Operating income from the venture capital limited par tnership was $18.2 million in 2004 versus losses of $0.9 million in 2003
and $3.6 million in 2002 due to favorable mark-to-market gains in 2004. In addition, in 2002 a $2.5 million writedown related to
one of the par tnership’s investments was recorded.
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