3decades

MIRA INFORM REPORT

Report No. :	486226
Report Date :	16.01.2018

IDENTIFICATION DETAILS

Name :	ILLINOIS TOOL WORKS INC.

Registered Office :	Corporation Trust Center 1209 Orange St, Wilmington, DE 19801

Country :	United States

Financials (as on) :	31.12.2016

Date of Incorporation :	1912

Legal Form :	Corporation

Line of Business :	Subject manufactures and sells industrial products and equipment worldwide.

No. of Employees :	50,000

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A+

Credit Rating	Explanation	Rating Comments
A+	Low Risk	Business dealings permissible with low risk of default

Status :	Excellent

Payment Behaviour :	Regular

Litigation :	Exist

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List

Country Name

Previous Rating

(30.06.2017)

Current Rating

(30.09.2017)

United States

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

UNITED STATES - ECONOMIC OVERVIEW

The US has the most technologically powerful economy in the world, with a per capita GDP of $57,300. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at purchasing power parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades.

In the US, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, businesses face higher barriers to enter their rivals' home markets than foreign firms face entering US markets.

Long-term problems for the US include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits.

The onrush of technology has been a driving factor in the gradual development of a "two-tier" labor market in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income.

Imported oil accounts for nearly 55% of US consumption and oil has a major impact on the overall health of the economy. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. Because the US economy is energy-intensive, falling oil prices since 2013 have alleviated many of the problems the earlier increases had created.

The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the US into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009, Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP. In 2012, the Federal Government reduced the growth of spending and the deficit shrank to 7.6% of GDP. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries.

Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2014, the direct costs of the wars totaled more than $1.5 trillion, according to US Government figures.

In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to extend coverage to an additional 32 million Americans by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on healthcare - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010.

In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight.

In December 2012, the Federal Reserve Board (Fed) announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short-term rates near zero until unemployment dropped below 6.5% or inflation rose above 2.5%. In late 2013, the Fed announced that it would begin scaling back long-term bond purchases to $75 billion per month in January 2014 and further reduce them as conditions warranted; the Fed ended the purchases during the summer of 2014. In 2014, the unemployment rate dropped to 6.2%, and continued to fall to 5.5% by mid-2015, the lowest rate of joblessness since before the global recession began; inflation stood at 1.7%, and public debt as a share of GDP continued to decline, following several years of increases. In December 2015, the Fed raised its target for the benchmark federal funds rate by 0.25%, the first increase since the recession began. With US GDP growth below 2%, the Fed has opted to raise rates three times since then, and in mid-June 2017, the range for the target rate stood at 1% to 1.25%.

Source : CIA

STATUTORY INFORMATION

Order:

IT W AIR MANAGEMENT VORTEC PAXTON PRODUCTS

(ITW Air Management is one of the company´s business units, which, in addition to Vortec products, offers the Paxton Products).

Address in the order:

AN ILLINOIS TOOL WORKS COMPANY 10125 CARVER ROAD, CINCINNATI OH 45242 4798

Legal Name:

ILLINOIS TOOL WORKS INC.

TradeName:

ILLINOIS TOOL WORKS INC.

ID:

568702

Date Created:

1912

Date Incorporated:

June 19, 1961

Legal Address:

Corporation Trust Center 1209 Orange St

Wilmington, DE 19801, USA

Operative Address:

155 Harlem Avenue

Glenview, IL 60025

United States

Telephone:

513.891.7485

Fax:

513.891.4092

Legal Form:

CORPORATION

Email:

sales@vortec.com

Registered in:

DELAWARE

Website:

www.itw-air.com

Contact:

Mr. E. Scott Santi - Chairman, Chief Executive Officer and President

Staff:

50.000

Activity:

SIC Code: 3089, Plastics Products, NEC

NAICS Code: 326199, All Other Plastics Product Manufacturing

History

Illinois Tool Works Inc. was founded in 1912 and is headquartered in Glenview, Illinois.

Key Developments:

Illinois Tool Works Inc. Provides Earnings Guidance for the Year 2018

Dec 1 17

Illinois Tool Works Inc. provided earnings guidance for the year 2018. For the year 2018, the company expects GAAP EPS of $7.05 to $7.25, represents 10% earnings growth at the midpoint. Effective tax rate expects to be 29%, which is the same as 2017.

Illinois Tool Works Seeks Acquisition

Dec 1 17

Michael M. Larsen, Chief Financial Officer and Senior Vice President of Illinois Tool Works Inc. (NYSE:ITW) said-"Our organic growth agenda is supplemented by expanding a segment's long-term organic growth potential with highly targeted bolt-on acquisitions that are a tight strategic fit."

Illinois Tool Works Inc. - Analyst/Investor Day

Nov 22 17

Illinois Tool Works Inc. - Analyst/Investor Day

PRINCIPAL ACTIVITY

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide.

The ITW Air Management Unit manufactures and supplies heating and air conditioning equipment.

Products/Services description:

The ITW Air Management Unit offers products such as enclosure coolers, cold air guns, personal, air conditioners, vortex tubes, air flow amplifiers, air knives, air nozzles, air jets, and accessories.

Brands:

ITW AIR MANAGEMENT

VORTEC

PAXTON

Sales are:

Wholesale

Clients:

Grupo Comercializador Borjas S.A. D

Ledme S De Rl De Cv

Conveyors Y Componentes, S.A. De C.V.

Enertec Exports S De R.L. De C.V.

La Agujita S.A. De C.V.

Tecnicos En Transmisiones Electro Mecanicas Sa De Cv

Nutec Bickley Sa de Cv

Suministros Y Servicios Tecnicos Sociedad Por Acciones Simples

Essi Electricidad Y Servicios Industriales S.A.S

Rittal LTDA.

Proyecing Sa

Suppliers:

Paslode Fasteners Shanghai Co Ltd

Operations area:

National And International

The company imports from

CHINA

The company exports to

MEXICO

COLOMBIA

CHILE

ECUADOR

The subject employs

50,000 Employees

Payments:

Regular

Partners:

On February 6, 2014, the Company announced that it had signed a definitive agreement to sell its Industrial Packaging business to The Carlyle Group for $3.2 billion . The transaction was completed on May 1, 2014, resulting in a pre-tax gain of $ 1.7 billion ($ 1.1 billion after-tax) in the second quarter of 2014 which was included in Income from discontinued operations.

LOCATION

Headquarters :

155 Harlem Avenue

Glenview, IL 60025

United States

Branches:

The company has several branches. Some of them are:

ILLINOIS TOOL WORKS INC

10125 CARVER ROAD, CINCINNATI, OH 45242, USA

ILLINOIS TOOL WORKS INC

1 MISSOURI RESEARCH PARK D

SAINT CHARLES, MO 63304, USA

ILLINOIS TOOL WORKS INC

2155 TRAVERSEFIELD DR

TRAVERSE CITY, MI 49686, USA

ILLINOIS TOOL WORKS INC

3700 W LAKE AVE

GLENVIEW, IL 60025, USA

ILLINOIS TOOL WORKS INC

8125 COBB CENTER DR

KENNESAW, GA 30152, USA

Subsidiaries

We attach the list of subsidiaries.

Acquisitions:

Net cash paid for acquisitions during 2016, 2015, and 2014 was $453 million , $6 million , and $45 million , respectively.

The net cash paid for acquisitions in 2016 primarily related to the acquisition of the Engineered Fasteners and Components ("EF&C") business from ZF TRW on July 1, 2016 for a purchase price of approximately $450 million . EF&C had operating revenue of $245 million for the six months ended December 31, 2016 which was reported within the Company’s Automotive OEM segment. As a result of the EF&C transaction, the Company recorded $187 million of goodwill and $135 million of amortizable intangible assets primarily related to customer relationships and technology. The Company expects goodwill of $104 million related to the transaction will be tax deductible. The fair values of the intangible assets were estimated based on discounted cash flow and market-based valuation models using Level 2 and Level 3 inputs and assumptions. The intangible assets are expected to be amortized on a straight-line basis over their estimated useful lives ranging from 4 to 17 years , with a weighted average amortization period of 16 years . Subsequent purchase accounting adjustments may change the initial amounts recorded, including goodwill and intangible assets, primarily due to the completion of valuations. The allocation of purchase price will be completed as soon as practicable, but no later than one year from the acquisition date.

GROUP STRUCTURE AND SUBSIDIARY COMPANIES

Listed at the stock exchange:

Market Capital:

58.42B

Outstanding Shares:

346,550,685.

Shareholders:

Direct Holders
Name	Shares
SMITH DAVID BYRON JR	112,372
MORRISON ROBERT S	99,741
SANTI ERNEST SCOTT	87,565
CROWN SUSAN	47,806
SKINNER JAMES A	46,485
STROBEL PAMELA B	30,565
MARTINDALE STEVEN L	30,510
MARTEL ROLAND M	26,222
NAGARAJAN SUNDARAM	23,847
Top Institutional Holders
Holder	Shares
Northern Trust Corporation	33,711,915
Vanguard Group, Inc. (The)	23,373,802
State Farm Mutual Automobile Insurance Co	23,154,700
Blackrock Inc.	20,909,816
State Street Corporation	13,578,473
Price (T.Rowe) Associates Inc	10,908,933
Wells Fargo & Company	9,025,426
Capital Research Global Investors	8,180,041
JP Morgan Chase & Company	5,411,089
Massachusetts Financial Services Co.	5,245,714
Top Mutual Fund Holders
Holder	Shares
Vanguard Total Stock Market Index Fund	6,390,794
Investment Company Of America	5,450,000
Vanguard 500 Index Fund	4,905,480
SPDR S&P 500 ETF Trust	3,509,559
Vanguard Institutional Index Fund-Institutional Index Fund	3,412,737
Price (T.Rowe) Growth Stock Fund Inc.	3,100,785
Vanguard Specialized-Dividend Appreciation Index Fund	2,904,098
MFS Series Trust I-MFS Value Fund	2,652,841
American Mutual Fund Inc	2,050,000
iShares Core S&P 500 ETF	1,817,315

Management:

Mr. E. Scott Santi - Chairman, Chief Executive Officer and President

Mr. Michael M. Larsen - Chief Financial Officer and Senior Vice President

Mr. Christopher A. O’Herlihy - Vice Chairman

Mr. Sundaram Nagarajan - Executive Vice President of Automotive OEM Segment

FINANCIAL INFORMATION

We attach company’s last financial statements.

For the quarter, operating revenue was $3,599 million against $3,431 million a year ago. Operating income was $874 million against $792 million a year ago. Income before taxes was $819 million against $751 million a year ago. Net income was $587 million against $525 million a year ago. Net income per diluted share was $1.69 against $1.46 a year ago. Adjusted return on average invested capital was 24.8% against 22.9% a year ago. Net cash provided by operating activities was $464 million against $535 million a year ago.

Additions to plant and equipment were $77 million against $64 million a year ago. Free cash flow was $387 million against $471 million a year ago. Adjusted free cash flow was $502 million. During the second quarter, the company recorded an EPS benefit of $0.03 per share related to a legal settlement. Excluding this item, second quarter earnings were $1.66 per share, an increase of 14% versus the prior year.

Operating income was up 10% year-on-year and was the higher quarterly operating income in the company's history. For six months, operating revenue was $7,070 million against $6,705 million a year ago. Operating income was $1,683 million against $1,514 million a year ago.

Income before taxes was $1,568 million against $1,419 million a year ago. Net income was $1,123 million against $993 million a year ago. Net income per diluted share was $3.23 against $2.75 a year ago. Adjusted return on average invested capital was 24.3% against 22.1% a year ago. Net cash provided by operating activities was $927 million against $1,014 million a year ago. Additions to plant and equipment were $141 million against $121 million a year ago. Free cash flow was $786 million against $893 million a year ago.

Adjusted free cash flow was $946 million. As a result of the company’s strong second quarter results, the company is raising its 2017 full-year EPS guidance by $0.12 at the mid-point. The company now expects earnings to be in the range of $6.32 to $6.52 per share, up from prior guidance of $6.20 to $6.40 per share, with organic revenue growth of 2% to 4%. The company expects operating margin of approximately 24% and free cash flow to exceed 100% of net income.

The company expects an effective tax rate of approximately 29%. The company’s third quarter and revised full-year EPS guidance does not include any EPS benefit from the previously disclosed legal settlement beyond the $0.03 per share recorded in the second quarter. For the third quarter 2017, the company expects earnings to be in the range of $1.57 to $1.67 per share with organic growth of 1% to 3%.

LEGAL FILINGS

PATENTS

FASTENING TOOL WITH BLIND GUIDE WORK CONTACT TIP

Publication number: 20130175314

Abstract: A blind guide work contact tip for mounting to a drive probe of a fastening tool is shaped in a manner which allows for an angled nail placement, such as 45 degree into a workpiece. The blind guide work contact is a one-piece attachment which is fitted around the existing drive probe and includes a body and two wings which extend therefrom forming a channel through which a fastener passes into the workpiece. The body has a work surface with a peak and sloped slides adjacent each side of the peak at approximately 45 degrees. The sloped surfaces allows the blind guide work contact tip to better access corners and angled spaces than previous work contact tips. The work contact tip also has a flat portion at the peak of the work surface so as to not inhibit face nailing.

Type: Application

Filed: March 1, 2013

Publication date: July 11, 2013

Applicant: ILLINOIS TOOL WORKS INC.

Inventor: Illinois Tool Works Inc.

FASTENER FEEDER DELAY FOR FASTENER DRIVING TOOL

Publication number: 20130037593

Abstract: A fastener driving tool includes a power source including a cylinder, a piston with a driver blade reciprocating in the cylinder, a tool nose associated with the power source for receiving the driver blade for driving fasteners fed into the nose, and a magazine housing a supply of the fasteners. A magazine feeder mechanism is associated with the magazine for sequentially feeding fasteners into the nose, and the feeder mechanism includes a reciprocating feed piston. A conduit is connected between a port in the cylinder and the feed mechanism for diverting combusted gas for activating the feed piston. The port is disposed in the cylinder a specified distance below a piston prefiring position, the distance being reflective of a delay of activating the feed piston until the drive piston finishes a driving stroke and begins a return to the prefiring position.

Type: Application

Filed: October 8, 2012

Publication date: February 14, 2013

Applicant: ILLINOIS TOOL WORKS INC.

Inventor: ILLINOIS TOOL WORKS INC.

SYMMETRICAL OVERLAPPING JAW FRONT ACTION SEALING TOOL

Publication number: 20130327117

Abstract: A crimping tool for applying a deformable crimp seal onto overlapping layers of strap material includes a head and pairs of jaws disposed in the tool head and operably mounted thereto. Each pair includes opposingly oriented jaw elements. A shear extends between and is operably connected to the jaw elements. The jaw elements have an inwardly oriented crimping portion with a tip having a tapered portion terminating at a free end. A pair of handles are operably connected to the jaw elements and to one another. A side plate is operably connected to the jaw elements and shears and includes a centrally disposed slotted opening. When the tool is in a closed position the jaw elements of each pair align with one another and the free ends of the opposingly oriented jaw element tips overlap in a direction transverse to the jaw elements.

Type: Application

Filed: May 13, 2013

Publication date: December 12, 2013

Applicant: Illinois Tool Works Inc.

Inventor: Illinois Tool Works Inc.

GOVERNMENT CONTRACTS

Government Contractor: ILLINOIS TOOL WORKS INC

Name & Address: 2155 TRAVERSEFIELD DR

TRAVERSE CITY, MI 49686

Number of Defense Contracts Awarded: 1

Dollar Amount of Defense Contracts Awarded: $3,252

Government Contractor: ILLINOIS TOOL WORKS INC

Name & Address: 3700 W LAKE AVE

GLENVIEW, IL 60025

Number of Defense Contracts Awarded:1

Dollar Amount of Defense Contracts Awarded: $384,444

Government Contractor: ILLINOIS TOOL WORKS INC

Name & Address: 3700 W LAKE AVE

GLENVIEW, IL 60026-1217

Number of Defense Contracts Awarded: 85

Dollar Amount of Defense Contracts Awarded: $1,459,319

CASES

Winslow v. Illinois Tool Works, Inc.

Plaintiff: John Winslow

Defendant: Illinois Tool Works, Inc.

Case Number: 1:2017cv08796

Filed: December 6, 2017

Court: Illinois Northern District Court

Office: Chicago Office

County: Cook

Presiding Judge: Amy J. St. Eve

Nature of Suit: Employment

Cause of Action: 29:621

Jury Demanded By: Plaintiff

David Boysen v. Illinois Tool Works Inc. Sep., et al

Plaintiff - Appellee: DAVID L. BOYSEN

Defendant - Appellant: ILLINOIS TOOL WORKS INC. SEPARATION PAY PLAN and ILLINOIS TOOL WORKS, INC.

Case Number: 17-14289

Filed: September 25, 2017

Court: U.S. Court of Appeals, Eleventh Circuit

Nature of Suit: Employee Retirement

TRADEMARKS

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