<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER 1-4797
ILLINOIS TOOL WORKS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 36-1258310
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3600 W. LAKE AVENUE, GLENVIEW, ILLINOIS 60025-5811
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (708) 724-7500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
- --------------------------------------------------- ---------------------------------------------------
<S> <C>
COMMON STOCK NEW YORK STOCK EXCHANGE
CHICAGO STOCK EXCHANGE
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES ____X____ NO ____________
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. / /
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF MARCH 8, 1994, WAS APPROXIMATELY $3,500,000,000.
------------------------
SHARES OF COMMON STOCK OUTSTANDING AT MARCH 8, 1994 - 113,213,921
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
<TABLE>
<S> <C>
PARTS I, II,
1993 ANNUAL REPORT TO STOCKHOLDERS........................................... IV
PROXY STATEMENT DATED MARCH 28, 1994, FOR ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON MAY 6, 1994...................................................... PART III
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL --
Illinois Tool Works Inc. (the "Company") manufactures and markets a variety
of products and systems that provide specific, problem-solving solutions for a
diverse customer base worldwide. The Company has more than 250 operations in 33
countries. The Company's business units are divided into two segments:
Engineered Components, and Industrial Systems and Consumables. Products in the
Company's Engineered Components segment include short lead-time plastic and
metal components and assemblies; industrial fluids and adhesives; plastic and
metal fasteners, and fastening tools and equipment. Industrial Systems and
Consumables' products include longer lead-time systems and related consumables
for consumer and industrial packaging, finishing, furniture, inspection and
quality assurance applications.
In March 1993, the Company acquired the Miller Group Ltd., a manufacturer of
arc welding equipment, through an exchange of ITW voting Common Stock for all of
the voting Common Stock of Miller. As a result, the acquisition has been
accounted for as a pooling of interests in conformity with Generally Accepted
Accounting Principles, specifically paragraphs 46 through 48 of Accounting
Principles Board Opinion No. 16. Accordingly, the results of operations have
been included in the Statement of Income as of the beginning of 1993. The impact
of Miller on consolidated operating revenues, net income and net income per
share for 1993, 1992 and 1991 was not significant. Therefore, prior years'
financial statements have not been restated to reflect the acquisition of
Miller.
In 1990, the Company acquired substantially all of the net assets of the
DeVilbiss Industrial/Commercial businesses of Eagle Industries, Inc.
("DeVilbiss"). The DeVilbiss businesses manufacture products and engineered
systems used for product finishing and coating applications, including
conventional air spray equipment, powder-coating devices and robotic finishing
systems. The acquisition has been accounted for as a purchase and, accordingly,
the results of operations have been included in the Statement of Income from the
acquisition date.
In 1989, the Company acquired all of the outstanding common stock of
Ransburg Corporation ("Ransburg") for $192,000,000, which includes payment for
outstanding options and investment banking, legal and accounting fees paid by
both parties. Ransburg businesses manufacture and distribute electrostatic
finishing systems for liquid and powder coatings. The acquisition has been
accounted for as a purchase and, accordingly, the results of operations have
been included in the Statement of Income from the acquisition date.
In 1991, the Company sold certain net assets and technology related to the
Ransburg and DeVilbiss automotive finishing systems businesses. The revenues,
income and net assets related to the automotive finishing systems businesses
were not material.
During the five-year period ending December 31, 1993, the Company acquired
and disposed of a number of other businesses, none of which individually had a
material impact on consolidated results.
CURRENT YEAR DEVELOPMENTS --
Refer to pages 20 through 22, Management's Discussion and Analysis, in the
Company's 1993 Annual Report to Stockholders.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS --
For financial reporting purposes, the Company has grouped its operations
into two industry segments: Engineered Components and Industrial Systems and
Consumables. The percentage contributions to operating revenues for the last
three (3) years by these product categories are:
<TABLE>
<CAPTION>
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES
---------- -----------
<S> <C> <C>
1993.................................... 52% 48%
1992.................................... 46% 54%
1991.................................... 45% 55%
</TABLE>
1
<PAGE>
Segment and geographic data are included on pages 20 and 26 of the Company's
1993 Annual Report to Stockholders.
Product data relating to the Company's two segments are located on page 4 of
the Company's 1993 Annual Report to Stockholders. The principal markets served
by the Company's two segments are as follows:
<TABLE>
<CAPTION>
% OF OPERATING REVENUES
------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES
---------- -----------
<S> <C> <C>
Construction............................ 36.0% 10.8%
Automotive.............................. 25.9% 9.6%
General Industrial...................... 18.6% 28.5%
Food and Beverage....................... 1.7% 18.0%
Industrial Capital Goods................ 2.0% 10.2%
Consumer Durables....................... 6.0% 2.8%
Paper Products.......................... -- 8.8%
Electronics............................. 5.5% 1.9%
Other................................... 4.3% 9.4%
----- -----
100.0% 100.0%
----- -----
----- -----
</TABLE>
Operating results of the segments are described on pages 20 and 21 of the
Company's 1993 Annual Report to Stockholders.
BACKLOG --
Backlog generally is not considered a significant factor in the Company's
businesses as relatively short delivery periods and rapid inventory turnover are
characteristic of many of its products.
The following summarizes backlog by industry segment as of December 31, 1993
and 1992:
<TABLE>
<CAPTION>
BACKLOG IN THOUSANDS OF DOLLARS
-------------------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES TOTAL
----------- ------------ ----------
<S> <C> <C> <C>
1993.................................................. $ 159,000 $ 142,000 $ 301,000
1992.................................................. 128,000 140,000 268,000
</TABLE>
Backlog orders scheduled for shipment beyond calendar year 1994 were not
material in either industry segment as of December 31, 1993.
The following information is equally applicable to both industry segments of
the business unless otherwise noted:
COMPETITION --
The Company's global competitive environment is complex because of the wide
diversity of products the Company manufactures and the markets it serves.
Depending on the product or market, the Company may compete with few other
companies or with many firms, some of which may be the Company's own licensees.
The Company is a leading producer of plastic and metal fastening components
and assemblies; adhesives and fluids; packaging systems and related consumables;
finishing and static control systems and products; quality assurance equipment;
tooling for specialty applications; and arc welding equipment and related
systems.
2
<PAGE>
RAW MATERIALS --
The Company uses raw materials of various types, primarily metals and
plastics that are available from numerous commercial sources. The availability
of materials and energy has not resulted in any business interruptions or other
major problems, nor are any such problems anticipated.
RESEARCH AND DEVELOPMENT --
The Company's growth has resulted from developing new and improved products,
broadening the application of established products, continuing efforts to
improve and develop new methods, processes and equipment, and from acquisitions.
Many new products are designed to reduce customers' costs by eliminating steps
in their manufacturing processes, reducing the number of parts in an assembly,
or by improving the quality of customers' assembled products. Typically, the
development of such products is accomplished by working closely with customers
on specific applications. Identifiable research and development costs are set
forth on page 27 of the Company's 1993 Annual Report to Stockholders.
The Company owns approximately 1,630 unexpired United States patents
covering articles, methods and machines. Many counterparts of these patents have
also been obtained in various foreign countries. In addition, the Company has
approximately 240 applications for patents pending in the United States Patent
Office, but there is no assurance that any patent will be issued. The Company
maintains an active patent department for the administration of patents and
processing of patent applications.
The Company licenses some of its patents to other companies, from which the
Company collects royalties. The Company believes that many of its patents are
valuable and important. Nevertheless, the Company credits its leadership in the
markets it serves to engineering capability; manufacturing techniques, skills
and efficiency; marketing and sales promotion; and service and delivery of
quality products to its customers.
TRADEMARKS --
Many of the Company's products are sold under various trademarks owned or
licensed by the Company. Among the most significant are: ITW, Signode, Apex,
Buildex, Deltar, Devcon, DeVilbiss, Fastex, Hi-Cone, Keps, Magnaflux, Miller,
Minigrip, Paslode, Ransburg, Ramset, Shakeproof, Teks, Tenax, and Zip-Pak.
ENVIRONMENTAL PROTECTION --
The Company believes that its plants and equipment are in substantial
compliance with applicable environmental regulations. Additional measures to
maintain compliance are not expected to materially affect the Company's capital
expenditures, competitive position, financial position or results of operations.
Various legislative and administrative regulations concerning environmental
issues have become effective or are under consideration in many parts of the
world relating to manufacturing processes, and the sale or use of certain
products. To date, such developments have not had a substantial adverse impact
on the Company's sales or earnings. The Company has made considerable efforts to
develop and sell environmentally compatible products resulting in new and
expanding marketing opportunities.
EMPLOYEES --
The Company employed approximately 19,000 persons as of December 31, 1993
and considers its employee relations to be excellent.
INTERNATIONAL --
The Company's international operations include subsidiaries, joint ventures,
licensees and other affiliates in 33 countries on six continents. These
operations serve such markets as automotive, beverage and food, construction,
general industrial, packaging and others on a worldwide basis. The Company's
wholly and majority-owned international subsidiaries contributed approximately
36% and 45% of operating revenues in 1993 and 1992, respectively.
Refer to pages 20 and 21 in the Company's 1993 Annual Report to Stockholders
for additional information on international activities. International operations
are subject to certain risks inherent in
3
<PAGE>
conducting business in foreign countries, including price controls, exchange
controls, limitations on participation in local enterprises, nationalization,
expropriation and other governmental action, and changes in currency exchange
rates.
EXECUTIVE OFFICERS --
Executive Officers of the Company as of March 8, 1994 are as follows:
<TABLE>
<CAPTION>
Name Office Age
- --------------------------------- -------------------------------------------------------------- ---
<S> <C> <C>
Gunter A. Berlin Executive Vice President 61
Thomas W. Buckman Vice President, Patents and Technology 56
H. Richard Crowther Vice Chairman 61
W. James Farrell Executive Vice President 51
Russell M. Flaum Executive Vice President 43
Michael W. Gregg Senior Vice President and Controller, Accounting 58
Stewart S. Hudnut Senior Vice President, General Counsel and Secretary 54
Robert H. Jenkins Executive Vice President 51
John Karpan Senior Vice President, Human Resources 53
John D. Nichols Chairman and Chief Executive Officer 63
Frank S. Ptak Executive Vice President 50
F. Ronald Seager Executive Vice President 53
Harold B. Smith Chairman of the Executive Committee 60
</TABLE>
Except for Messrs. Hudnut and Karpan, each of the foregoing officers has
been employed by the Company in various executive capacities for more than five
years. The executive officers of the Company serve at the pleasure of the Board
of Directors. Mr. Hudnut joined the Company in January 1992 having previously
served as Senior Vice President, General Counsel and Secretary of MBIA Inc., a
financial guarantor, and Vice President, General Counsel and Secretary of
Scovill Inc., a diversified manufacturer. Mr. Karpan joined the Company in June
1990 having previously served as President and Chief Operating Officer of Butler
Fixture Company, a manufacturer of commercial fixtures, and Vice President,
Human Resources and Planning for Borg Warner Automotive, Inc., manufacturer of
automotive components. Mr. Smith has entered into a one-year service agreement
with the Company for $85,000.
ITEM 2. PROPERTIES
As of December 31, 1993 the Company operated 160 plants and office
facilities in the United States, excluding regional sales offices and warehouse
facilities. Of the total U.S. floor space of 11.1 million square feet, 7.5
million is owned by the Company, with the remaining 3.6 million being leased.
Internationally, the Company operated 87 plants and office facilities excluding
regional sales offices and warehouse facilities. Of the total international
floor space of 5.1 million square feet, 3.6 million is owned by the Company,
with the remaining 1.5 million being leased. The principal international plants
are in Australia, Belgium, Brazil, Canada, France, Germany, Ireland, Italy,
Japan, Malaysia, Spain, Switzerland and the United Kingdom.
Of the worldwide plants and office facilities, 122 were operated by
businesses in the Engineered Components segment, 119 by businesses in the
Industrial Systems and Consumables segment, and 6 by corporate-related entities.
Of the company-wide square footage, 7.5 million are used by businesses in the
Engineered Components segment and 7.6 million are used by businesses in the
Industrial Systems and Consumables segment, with the remaining square footage
used as corporate-related facilities.
The Company's properties are primarily of steel, brick or concrete
construction and are maintained in good operating condition. Productive
capacity, in general, currently exceeds operating levels. Capacity levels are
somewhat flexible based on the number of shifts operated and on the number of
overtime hours worked. The Company adds productive capacity from time to time as
required by increased demand. Additions to capacity can be made within a
reasonable period of time due to the nature of the businesses.
4
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
This information is incorporated by reference to page 37 of the Company's
1993 Annual Report to Stockholders.
ITEM 6. SELECTED FINANCIAL DATA
This information is incorporated by reference to pages 38 and 39 of the
Company's 1993 Annual Report to Stockholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This information is incorporated by reference to pages 20 through 22 of the
Company's 1993 Annual Report to Stockholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and report thereon of Arthur Andersen & Co. dated
February 9, 1994, as found on pages 23 through 37 of the Company's 1993 Annual
Report to Stockholders, are incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information regarding the Directors of the Company is incorporated by
reference to the information under the caption "Election of Directors" in the
Company's Proxy Statement for the 1994 Annual Meeting of Stockholders.
Information regarding the Executive Officers of the Company can be found in
Part I of this Annual Report on Form 10-K on page 4.
ITEM 11. EXECUTIVE COMPENSATION
This information is incorporated by reference to the information under the
captions "Executive Compensation" and "Directors' Compensation" in the Company's
Proxy Statement for the 1994 Annual Meeting of Stockholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This information is incorporated by reference to the information under the
caption "Security Ownership" in the Company's Proxy Statement for the 1994
Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
5
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The financial statements and report thereon of Arthur Andersen & Co. dated
February 9, 1994 as found on pages 23 through 37 of the Company's 1993 Annual
Report to Stockholders, are incorporated by reference.
(2) Financial Statement Schedules
The following supplementary financial data should be read in conjunction
with the financial statements and comments thereto as presented in the Company's
1993 Annual Report to Stockholders. Schedules not included with this
supplementary financial data have been omitted because they are not applicable,
immaterial or the required information is included in the financial statements
or the related comments on financial statements.
<TABLE>
<CAPTION>
Schedule No. Page No.
------------ ---------
<S> <C> <C>
Amounts Receivable from Related Parties, Underwriters,
Promoters and Employees Other Than Related Parties......... II 9
Valuation And Qualifying Accounts.......................... VIII 10
Short-Term Borrowings...................................... IX 11
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the period for which this
report is filed.
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULES
To Illinois Tool Works Inc.:
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Illinois Tool Works Inc.'s 1993 Annual
Report to Stockholders, incorporated by reference in this Form 10-K, and have
issued our report thereon dated February 9, 1994. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the accompanying index are the responsibility of the
Company's management and are presented for the purpose of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. The schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
February 9, 1994
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 25th day of
March, 1994.
ILLINOIS TOOL WORKS INC.
By ________/s/__JOHN D. NICHOLS_______
John D. Nichols
Director, Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant and
in the capacities indicated on this 25th day of March, 1994.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ----------------------------------- --------------------------------------------
<S> <C>
- --------------------------- Senior Vice President and Controller,
/s/ MICHAEL W. GREGG Accounting (Principal Accounting and
Michael W. Gregg Financial Officer)
Julius W. Becton, Jr. Director
Silas S. Cathcart Director
Richard M. Jones Director
George D. Kennedy Director
Richard H. Leet Director
John D. Nichols Director
Robert C. McCormack Director
Phillip B. Rooney Director
Harold B. Smith Director
Edward F. Swift Director
Ormand J. Wade Director
</TABLE>
By________/s/__JOHN D. NICHOLS________
(John D. Nichols
as Attorney-in-Fact)
Original powers of attorney authorizing John D. Nichols to sign this Annual
Report on Form 10-K and amendments thereto on behalf of the above-named
directors of the registrant have been filed with the Securities and Exchange
Commission as part of this Annual Report on Form 10-K (Exhibit 24).
8
<PAGE>
ILLINOIS TOOL WORKS INC.
AMOUNTS RECEIVABLE FROM RELATED PARTIES, UNDERWRITERS, PROMOTERS
AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1993(1)
SCHEDULE II
<TABLE>
<CAPTION>
DEDUCTIONS BALANCE AT END
BALANCE AT ---------------------- OF PERIOD
BEGINNING AMOUNTS AMOUNTS ----------------------
NAME OF DEBTOR OF PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT NOT-CURRENT
- ------------------------------------------ ----------- ----------- --------- ----------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1992:
Automated Label Systems Co. (2)......... -- $ 23,042 $ 9,050 -- $ 13,992 --
Year Ended December 31, 1993:
Automated Label Systems Co. (2)......... $ 13,992 $ 36,874 $ 14,976 -- $ 35,890 --
<FN>
- ------------------------
(1) No such items were in existence as of December 31, 1991.
(2) 50%-owned Joint Venture of the Company. Amounts receivable represent
outstanding advances made at the prime interest rate. Of the total amounts
receivable at December 31, 1993, $13.6 million is due on demand, and $22.3
million is due 180 days after termination of the Joint Venture.
</TABLE>
9
<PAGE>
ILLINOIS TOOL WORKS INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
SCHEDULE VIII
<TABLE>
<CAPTION>
DEDUCTIONS
-------------------------------------
RECEIVABLES
BALANCE AT PROVISIONS WRITTEN
BEGINNING CHARGED TO OFF, NET OF BALANCE END
OF PERIOD INCOME ACQUISITIONS RECOVERIES DISPOSITIONS OTHER OF PERIOD
----------- ----------- ----------- ----------- ------------- --------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1991:
Allowances for uncollectible
accounts.......................... $ 15,500 $ 7,824 $ 1,711 $ (6,000) $ (37) $ (98) $ 18,900
Year Ended December 31, 1992:
Allowances for uncollectible
accounts.......................... 18,900 6,804 528 (7,896) (140) (396) 17,800
Year Ended December 31, 1993:
Allowances for uncollectible
accounts.......................... 17,800 8,233 740 (7,496) -- (1,277) 18,000
</TABLE>
10
<PAGE>
ILLINOIS TOOL WORKS INC.
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1991, 1992 AND 1993
SCHEDULE IX
<TABLE>
<CAPTION>
MAXIMUM AVERAGE WEIGHTED
WEIGHTED AMOUNT AMOUNT AVERAGE
BALANCE AVERAGE OUTSTANDING OUTSTANDING INTEREST
AT END INTEREST RATE DURING THE DURING THE RATE-DURING
CLASSIFICATION OF YEAR END OF YEAR YEAR (3) YEAR (1) THE YEAR (2)
- ---------------------------------------- -------- ------------- ----------- ----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1991:
Bank overdrafts....................... $ 19,557 11.6% $ 21,390 $ 25,145 11.6%
Short-term loans...................... 107,710 10.2 23,504 41,837 10.5
Commercial paper...................... 45,500 5.9 137,500 36,600 5.9
-------- --- ----------- ----------- ---
Short-term borrowings................. 172,767 9.3% $ 182,394 $ 103,582 9.0%
----------- -----------
----------- -----------
Current maturities of long-term debt.. 9,340
--------
Total short-term debt............... $182,107
--------
--------
Year Ended December 31, 1992:
Bank overdrafts....................... $ 19,704 11.7% $ 19,557 $ 21,244 11.6%
Short-term loans...................... 29,854 8.8 107,710 66,221 10.1
Commercial paper...................... 30,000 3.4 45,500 46,800 4.3
-------- --- ----------- ----------- ---
Short-term borrowings................. 79,558 7.5% $ 172,767 $ 134,265 8.3%
----------- -----------
----------- -----------
Current maturities of long-term debt.. 3,703
--------
Total short-term debt............... $ 83,261
--------
--------
Year Ended December 31, 1993:
Bank overdrafts....................... $ 18,034 8.4% $ 22,032 $ 20,941 10.2%
Short-term loans...................... 22,539 7.2 37,834 32,426 7.9
Commercial paper...................... 63,881 3.2 171,234 102,489 3.2
-------- --- ----------- ----------- ---
Short-term borrowings................. 104,454 5.0% $ 231,100 $ 155,856 5.1%
----------- -----------
----------- -----------
Current maturities of long-term debt.. 2,619
--------
Total short-term debt............... $107,073
--------
--------
<FN>
- ------------------------
(1) Determined by averaging the outstanding balance at the beginning of the
period and the outstanding balance at the end of each quarter during the
period. Commercial paper was reclassified from long-term to short-term as
of September 30, 1991. The average amount outstanding was computed using
only those amounts classified as short-term over the entire year.
(2) Determined by averaging the weighted average interest rate on amounts
outstanding at the beginning of the period and on amounts outstanding at
the end of each quarter during the period.
(3) Maximum amount outstanding during the year is based on quarter-end
balances for short-term borrowings in total.
</TABLE>
11
<PAGE>
EXHIBIT INDEX
1993 FORM 10-K ANNUAL REPORT
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
3(a) Restated Certificate of Incorporation of Illinois Tool Works Inc., as amended, filed as Amendment No. 1
to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989, by means of
Form 8 dated May 24, 1990, (Commission File No. 1-4797) and incorporated herein by reference.
3(b) By-laws of Illinois Tool Works Inc., as amended, filed as Exhibit 3(b) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1990, (Commission File No. 1-4797) and incorporated
herein by reference.
3(c) Certificate of Amendment of Restated Certificate of Incorporation of Illinois Tool Works Inc. dated June
11, 1991.
4(a) Indenture, dated as of November 1, 1986, between Illinois Tool Works Inc. and The First National Bank of
Chicago, as Trustee, filed as Exhibit 4 to the Company's Registration Statement on Form S-3
(Registration Statement No. 33-5780) filed with the Securities and Exchange Commission on May 14, 1986,
and incorporated herein by reference.
4(b) Resignation of Trustee and Appointment of Successor under Indenture (Exhibit 4(a)), filed as Exhibit
4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989,
(Commission File No. 1-4797) and incorporated herein by reference.
4(c) First Supplemental Indenture, dated as of May 1, 1990 between Illinois Tool Works Inc. and Harris Trust
and Savings Bank, as Trustee, filed as Exhibit 4-3 to the Company's Post-Effective Amendment No. 1 to
Registration Statement on Form S-3 (Registration No. 33-5780) filed with the Securities and Exchange
Commission on May 8, 1990, and incorporated herein by reference.
4(d) Credit agreement, dated as of August 14, 1992, among the Company, the Banks listed therein and the First
National Bank of Chicago, as agent, filed as Exhibit 4(d) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992, (Commission File No. 1-4797) and incorporated herein by
reference.
4(e) Officers' Certificate Pursuant to Sections 2.01 and 2.04 of the Indenture (Exhibit 4(a) as amended by
Exhibit 4(c)) related to the 5 7/8% Notes due March 1, 2000, filed as Exhibit 4(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1992, (Commission File No. 1-4797) and
incorporated herein by reference.
4(f) Form of 7 1/2% notes due December 1, 1998, filed as Exhibit 4 to the Company's Current Report on Form
8-K dated December 2, 1991, and incorporated herein by reference.
4(g) Form of 5 7/8% Notes due March 1, 2000, filed as Exhibit 4(f) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, (Commission File No. 1-4797) and incorporated herein
by reference.
4(h) Amendment I to the Credit Agreement dated August 14, 1992 (Exhibit 4(d)), filed as Exhibit 4(a) to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1993, (Commission File
No. 1-4797) and incorporated herein by reference.
10(a) Illinois Tool Works Inc. Stock Incentive Plan and amendments thereto filed as Exhibit 10(a) to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, (Commission File No.
1-4797) and incorporated herein by reference.
10(b) Contracts between Illinois Tool Works Inc. and John D. Nichols filed as Exhibit 10(b) to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1990, (Commission File No. 1-4797) and
incorporated herein by reference.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
10(c) Illinois Tool Works Inc. 1982 Executive Contributory Retirement Income Plan adopted December 13, 1982,
filed as Exhibit 10(c) to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1990, (Commission File No. 1-4797) and incorporated herein by reference.
10(d) Illinois Tool Works Inc. 1985 Executive Contributory Retirement Income Plan adopted December 1985, filed
as Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1990, (Commission File No. 1-4797) and incorporated herein by reference.
10(e) Illinois Tool Works Inc. Executive Incentive Program adopted August 1, 1979 and amendments thereto,
filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1991, (Commission File No. 1-4797) and incorporated herein by reference.
10(f) Supplemental Plan for Employees of Illinois Tool Works Inc., effective January 1, 1989, filed as Exhibit
10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1989,
(Commission File No. 1-4797) and incorporated herein by reference.
10(g) Phantom stock agreement between Illinois Tool Works Inc. and John D. Nichols dated January 1, 1986,
October 17, 1986 and January 1, 1991, respectively, filed as Exhibit 10(g) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1991, (Commission File No. 1-4797) and incorporated
herein by reference.
10(h) Amendment to the Phantom stock agreement between Illinois Tool Works Inc. and John D. Nichols, dated
January 1, 1991 (see 10(g) above), filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992, (Commission File No. 1-4797) and incorporated herein by reference.
10(i) Underwriting Agreement dated November 20, 1991, related to the 7 1/2% Notes due December 1, 1998, filed
as Exhibit 1 to the Company's Current Report on Form 8-K dated December 2, 1991, and incorporated herein
by reference.
10(j) Underwriting Agreement dated February 23, 1993, related to the 5 7/8% Notes due March 1, 2000, filed as
Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
(Commission File No. 1-4797) and incorporated herein by reference.
10(k) Illinois Tool Works Inc. 1993 Executive Contributory Retirement Income Plan, filed as Exhibit 10(a) to
the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1993, (Commission
File No. 1-4797) and incorporated herein by reference.
13 The Company's 1993 Annual Report to Stockholders, pages 4, 20-39.
21 Subsidiaries of the Company.
22 Information under the captions "Election of Directors," "Directors' Compensation," "Executive
Compensation" and "Security Ownership" in the Company's Proxy Statement for the 1994 Annual Meeting of
Stockholders.
23 Consent of Arthur Andersen & Co.
24 Powers of Attorney.
</TABLE>
13
<PAGE>
EXHIBIT 3(c)
CERTIFICATE OF AMENDMENT
OF
RESTATED
CERTIFICATE OF INCORPORATION
ILLINOIS TOOL WORKS INC.
ILLINOIS TOOL WORKS INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That at a meeting of the Board of Directors of Illinois Tool
Works Inc. held on February 22, 1991, resolutions were adopted setting forth a
proposed amendment of the Restated Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and directing that the
amendment be considered at the Annual meeting of Stockholders of the corporation
to be held May 10, 1991. The resolution setting forth the proposed amendment is
as follows:
"RESOLVED: That the Restated Certificate of Incorporation of this
corporation be amended by changing the FOURTH Article thereof so that,
as amended said Article shall be and read as follows:
FOURTH: (1) Authorized shares. The total number of
shares of stock of all classes which the corporation
shall have authority to issue is one hundred fifty
million three hundred thousand (150,300,000), of
which three hundred thousand (300,000) shall be
shares of Preferred Stock without par value and
one hundred fifty million (150,000,000) shall be
shares of Common Stock without par value."
SECOND: That thereafter, pursuant to resolution of its Board of Directors,
the Annual Meeting of the Stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
<PAGE>
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, ILLINOIS TOOL WORKS INC. has caused this certificate
to be signed by John D. Nichols, its Chairman and Chief Executive Officer, and
Arthur M. Wright, its Secretary, this 11th day of June, 1991.
ILLINOIS TOOL WORKS INC.
By: s/John D. Nichols
-------------------------------------
John D. Nichols
Chairman and Chief
Executive Officer
ATTEST:
By: s/Arthur M. Wright
------------------------------------
Arthur M. Wright
Secretary
Effective: July 15, 1991
<PAGE>
ITW OVERVIEW: SEGMENTS AND GROUPS
ITW's businesses are organized into two segments--Engineered Components, and
Industrial Systems and Consumables. Within these segments are several groups,
each comprised of businesses that share similar manufacturing capabilities,
market focus or other business practices.
ENGINEERED COMPONENTS SEGMENT
Short lead-time plastic and metal components and assemblies; industrial
fluids and adhesives; plastic and metal fasteners, and fastening tools and
equipment.
BUSINESS GROUPS
CONSTRUCTION PRODUCTS AND ENGINEERED POLYMERS
Fasteners and fastening systems used in wood, metal and concrete/masonry
construction applications; advanced-technology adhesives and polymers used in
construction, industrial and consumer markets.
MILLER
Arc welding equipment and related systems for metalworking, construction,
maintenance and other applications.
AUTOMOTIVE AND SPECIALTY COMPONENTS
Metal and plastic fasteners, switches, components and assemblies used in
automotive and industrial applications; extruded plastic packaging; fluids and
related products used in metal cutting operations.
INDUSTRIAL SYSTEMS AND CONSUMABLES SEGMENT
Longer lead-time systems and related consumables for consumer and
industrial packaging, finishing, furniture, inspection and quality assurance
applications.
BUSINESS GROUPS
CONSUMER PACKAGING PRODUCTS AND SYSTEMS
Plastic multipacking and application systems; resealable packaging
products; marking, labeling and identification systems.
INDUSTRIAL PACKAGING SYSTEMS
Packaging application equipment and systems, including steel and plastic
strapping, stretch film and carton sealing tape; paper packaging systems; wire-
tieing equipment; and hot melt adhesive application equipment.
FINISHING SYSTEMS AND SPECIALTY ENGINEERED PRODUCTS
Electrostatic and conventional, liquid and powder finishing spray guns,
equipment and systems for appliance, automotive and general industrial markets;
infrared drying, paint curing and heat treating systems; static control, spot
cooling and air amplification systems. Specialty inspection, balancing, non-
destructive testing and quality measurement systems for automotive and
industrial applications.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
Illinois Tool Works Inc. is a multinational manufacturer of industrial
components and systems with two business segments: Engineered Components, and
Industrial Systems and Consumables. The markets served by these segments are
shown on page 5 of this report. These segments are described below.
ENGINEERED COMPONENTS SEGMENT
Businesses in this segment manufacture short lead-time plastic and metal
components and assemblies; industrial fluids and adhesives; plastic and metal
fasteners, and fastening tools and equipment. This segment primarily serves the
construction, automotive and general industrial markets.
Dollars in millions
<TABLE>
<CAPTION>
Operating
Revenues 1993 1992 1991
- ------------------------------------------------------------
<S> <C> <C> <C>
Domestic $1,083 $ 678 $ 622
International 560 603 561
------ ------ ------
Total $1,643 $1,281 $1,183
------ ------ ------
------ ------ ------
<CAPTION>
Operating 1993 1992 1991
Income Income Margin% Income Margin% Income Margin%
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic $153 14.1% $ 92 13.6% $ 62 10.0%
International 55 9.8% 68 11.3% 62 11.1%
---- ---- ----
Total $208 12.7% $160 12.5% $124 10.5%
---- ---- ----
---- ---- ----
</TABLE>
Domestically, operating revenues increased in 1993 compared with 1992 due
to the Miller acquisition, along with higher volume in the automotive and
construction markets. The increased demand in the automotive markets was driven
by U.S. car builds increasing 12 percent in 1993 compared with 1992, and
improved market penetration. Increased revenues in the construction market
resulted from new distribution channels and an increase in the number of
domestic housing starts. Operating income increased in 1993 versus 1992 as a
result of acquisitions, coupled with increased revenues and cost reductions in
the automotive-related businesses. Miller's lower margins caused total segment
margins to improve only slightly over 1992 results. Management expects margins
will continue to increase in 1994 as a result of cost improvements at businesses
acquired in 1993 and steady growth in the domestic markets.
From 1991 to 1992, domestic revenues and operating income increased due to
a general improvement in the U.S. economy, particularly in the automotive and
construction markets. These markets had been weak in 1991 as a result of a
domestic recessionary environment. Improved productivity in the automotive and
general industrial-related businesses led to a significant increase in operating
margins over 1991.
Internationally, operating revenues were down in 1993 compared with 1992
mainly as a result of a recessionary European economy. Approximately 80% of
international revenues were generated by European operations. Although European
markets were weak, significant automotive and construction market penetration
moderated the decline in revenues. Operating income was down compared with the
previous year due to price pressure in the soft European automotive and
construction markets. In addition, nonrecurring costs at some business units
negatively impacted operating income. Operating margins were down versus 1992
but improved from the first quarter of 1993 to the fourth quarter of 1993. The
margin improvements are expected to continue in 1994 as cost reduction efforts
continue.
Automotive and construction markets contributed to the increase in
international revenues in 1992 compared with 1991. The weakening of European
construction markets caused international operating margins to remain relatively
flat in 1992 versus 1991.
INDUSTRIAL SYSTEMS AND CONSUMABLES SEGMENT
Businesses in this segment manufacture longer lead-time systems and related
consumables for consumer and industrial packaging, finishing, furniture,
inspection and quality assurance applications. The largest markets served by
this segment are general industrial, food and beverage, construction and
industrial capital goods.
Dollars in millions
<TABLE>
<CAPTION>
Operating
Revenues 1993 1992 1991
- ------------------------------------------------------------
<S> <C> <C> <C>
Domestic $ 936 $ 878 $ 819
International 580 653 638
------ ------- ------
Total $1,516 $ 1,531 $1,457
------ ------- ------
------ ------- ------
<CAPTION>
Operating 1993 1992 1991
Income Income Margin% Income Margin% Income Margin%
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic $133 14.2% $119 13.6% $ 97 11.8%
International 45 7.8% 65 10.0% 83 13.0%
---- ---- ----
Total $178 11.7% $184 12.0% $180 12.4%
---- ---- ----
---- ---- ----
</TABLE>
The increase in domestic operating revenues was due to solid performance in
all the domestic markets as a result of an improved U.S. economy in 1993
compared with 1992. The finishing systems businesses largely contributed to the
increase in operating income compared with the previous year due to benefits
from significant cost reductions implemented in 1992 and new product
introductions in 1993. Operating margins in 1993 were up due to improved
profitability in the finishing systems businesses and also the Industrial
Packaging Systems Group.
Also the U.S. recession moderated in 1992, volume increased in the consumer
and industrial packaging groups.
20
<PAGE>
Operating income and operating margins improved in 1992 compared with the
previous year primarily as a result of margin gains in the Industrial Packaging
Systems Group.
Internationally, operating revenues in 1993 were lower than the previous
year due to a slowdown in the European economy. Approximately 70% of
international revenues in this segment came from European operations. The
recession significantly affected the Industrial Packaging Systems Group, which
serves many European markets. Operating income and margins were lower compared
with 1992 as a result of the decline in volume and increased price pressure in
European markets. The finishing systems businesses' operating income generated
by European operations more than doubled compared with 1992, which moderated the
decline in international operating income and margins in 1993. Management
expects international revenues to remain flat during 1994, but anticipates
operating income and margins to improve as a result of aggressive cost
reductions.
International revenues in 1992 increased only slightly versus 1991 due to
the European recession, which mostly affected the Industrial Packaging Systems
Group. The finishing systems businesses hindered growth in 1992 operating
income and margins versus 1991 due to nonrecurring costs necessary to improve
future profitability.
OPERATING COSTS
Operating costs as a percentage of revenues increased to 67.2% in 1993 compared
with 66.1% in 1992 and 66.6% in 1991. The increase was a result of European
price pressure and the acquisition of Miller, which had higher operating costs
than the Company average.
ADMINISTRATIVE AND R&D EXPENSES
Selling, administrative, and research and development expenses were 19.9% of
revenues in 1993 versus 20.9% in 1992 and 1991. This ratio was lower because of
cost reductions as a result of a Company-wide objective to reduce administrative
costs.
INTEREST EXPENSE
Interest expense declined to $35 million in 1993, compared with $43 million in
1992 and $44 million in 1991. Average debt outstanding for the year rose as a
result of increased borrowing used to finance acquisitions. However, interest
expense declined from previous years due to the reduction of foreign debt with
higher interest rates and lower domestic interest rates on commercial paper.
POSTRETIREMENT HEALTH CARE BENEFITS
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions. This standard requires that the expected cost of health
care benefits be charged to expense during the service lives of employees rather
than the cash basis method previously used. The Company has elected to amortize
the unfunded accumulated postretirement benefit obligation of $145.5 million as
of January 1, 1993 over 20 years.
The cost of postretirement health care benefits was $21 million under SFAS
106 in 1993 versus approximately $9 million in both 1992 and 1991.
OTHER INCOME (EXPENSE)
The increase of various nonrecurring costs unrelated to operations and lower
interest income resulted in net other expense of $7.7 million in 1993 compared
with net other income of $8.7 million in 1992. Net other income of $28.6
million was higher in 1991 versus 1992 due primarily to gains related to the
sale of investment properties in Japan and France. In accordance with the
Securities and Exchange Commission's policy, amortization of goodwill and other
intangibles has been reclassified from other income (expense) to an operating
expense.
TAX RATE
Under the new 1993 tax law, the Federal statutory rate increased to 35% in 1993
from 34% in both 1992 and 1991. This rate increase resulted in an effective
1993 annual tax rate of 38.5% compared with 38% in 1992 and 37.3% in 1991. See
the Provision for Income Taxes footnote for reconciliation of the Federal
statutory rate to the effective tax rate. SFAS No. 109, Accounting for Income
Taxes, was adopted in 1993 and had no material impact on earnings.
NET INCOME
Net income of $207 million ($1.83 per share) was 7.5% higher than the 1992 net
income of $192 million ($1.72 per share). Net income for 1992 was 6.4% higher
than 1991 net income of $181 million ($1.62 per share). The Company declared a
two-for-one stock split in June 1993 that doubled the outstanding shares. Net
income per share has been restated for the stock split.
FOREIGN CURRENCY
The strong U.S. dollar against European currencies resulted in a reduction of
net income by 4 cents per share in 1993 compared with 1992. Foreign currency
had no material impact on earnings in 1992 versus 1991.
21
<PAGE>
FINANCIAL POSITION
Net working capital at December 31, 1993 and 1992 is summarized as follows:
<TABLE>
<CAPTION>
Increase/
In thousands 1993 1992 (Decrease)
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Current Assets:
Cash and equivalents $ 35,395 $ 31,193 $ 4,202
Trade receivables 544,226 492,202 52,024
Inventories 403,902 400,605 3,297
Other 110,125 80,847 29,278
----------- ----------- -------
$ 1,093,648 $ 1,004,847 $88,801
----------- ----------- -------
----------- ----------- -------
Current Liabilities:
Short-term debt $ 107,073 $ 83,261 $23,812
Accounts payable and
accrued expenses 383,137 338,645 44,492
Other 55,932 90,823 (34,891)
----------- ----------- -------
546,142 512,729 33,413
----------- ----------- -------
Net Working Capital $ 547,506 $ 492,118 $55,388
----------- ----------- -------
----------- ----------- -------
Current Ratio 2.00 1.96
---- ----
---- ----
</TABLE>
The acquisition of Miller in 1993 resulted in an increase of $39.6 million
in net working capital. The increase in trade receivables was primarily due to
Miller and increased 1993 sales. Excluding the impact of Miller, inventories
decreased $26.7 million in 1993 as a result of the Company's continued effort to
minimize inventory levels.
Other current assets increased and other current liabilities decreased due
to certain reclassifications between deferred income taxes and income taxes
payable recorded in conjunction with the implementation of SFAS No. 109,
Accounting for Income Taxes. The increase in short-term debt was the result of
additional commercial paper borrowings of $33.9 million, partially offset by a
$9.0 million reduction in foreign short-term borrowings that carried higher
interest rates. The increase in accounts payable and accrued expenses was
mainly due to 1993 acquisitions.
Long-term debt at December 31, 1993 consisted of $100 million of commercial
paper, $125 million of 7-1/2% notes due in 1998, $125 million of 5-7/8% notes
due in 2000 and $26 million of capitalized lease obligations and other debt.
Long-term debt increased $124 million from December 31, 1992, principally as the
result of the issuance of the 5-7/8% notes in March 1993 made in response to the
availability of lower interest rates and to fund acquisitions.
Stockholders' equity was $1.259 billion at December 31, 1993 compared with
$1.340 billion at December 31, 1992. Affecting equity were earnings of $207
million, dividends declared of $56 million, the effect of pooling of interests
acquisitions of $211 million and unfavorable currency translation adjustments of
$28 million related to weaker European currencies.
The Statement of Cash Flows for the years ended December 31, 1993 and 1992
is summarized below:
<TABLE>
<CAPTION>
In thousands 1993 1992
- ------------------------------------------------------------------------------
<S> <C> <C>
Net income $206,570 $ 192,080
Depreciation and amortization 131,726 122,631
Acquisitions (303,802) (62,496)
Additions to plant and equipment (119,931) (115,313)
Cash dividends paid (55,175) (50,290)
Proceeds from long-term debt 128,119 102,516
Repayments of long-term debt (15,939) (158,274)
Other, net 32,634 (92,763)
-------- ---------
Net increase (decrease) in cash and
equivalents $ 4,202 $ (61,909)
-------- ---------
-------- ---------
</TABLE>
Net cash provided by operating activities of $314 million in 1993 and $287
million in 1992 was used mainly for additions to plant and equipment and cash
dividends. Cash provided by the proceeds from long-term debt in 1993 was used
principally to fund acquisitions.
Dividends paid per share increased 8.9% to $.49 per share in 1993 from $.45
in 1992. The Company expects to continue to meet its dividend payout objective
of 25-30% of the average of the last three years' net income.
Management continues to believe that internally generated funds will be
adequate to service existing debt and maintain appropriate debt to total
capitalization and earnings to fixed charge ratios. Internally generated funds
are also expected to be adequate to finance internal growth and small-to-medium
sized acquisitions for cash. The Company has additional debt capacity for
larger acquisitions.
22
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
STATEMENT OF INCOME
Illinois Tool Works Inc. and Subsidiaries
- -----------------------------------------------------------------------------------------------
For the Years Ended December 31
----------------------------------------
In thousands except for per share amounts 1993 1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues $3,159,181 $2,811,645 $2,639,650
Operating costs 2,122,286 1,858,752 1,759,288
Selling, administrative, and research
and development expenses 629,459 586,801 552,874
Amortization of goodwill and other
intangible assets 21,874 22,169 23,979
---------- ---------- ----------
Operating Income 385,562 343,923 303,509
Interest expense (35,025) (42,852) (44,342)
Amortization of retiree health care (6,968) -- --
Other income(expense) (7,699) 8,709 28,592
---------- ---------- ----------
Income Before Income Taxes 335,870 309,780 287,759
Income taxes 129,300 117,700 107,200
---------- ---------- ----------
Net Income $ 206,570 $ 192,080 $ 180,559
---------- ---------- ----------
---------- ---------- ----------
Net Income Per Share of Common Stock $1.83 $1.72 $1.62
----- ----- -----
----- ----- -----
</TABLE>
STATEMENT OF INCOME REINVESTED IN THE BUSINESS
Illinois Tool Works Inc. and Subsidiaries
<TABLE>
<CAPTION>
For the Years Ended December 31
----------------------------------------
In thousands 1993 1992 1991
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, Beginning of Year $1,201,537 $1,060,931 $ 918,589
Net income 206,570 192,080 180,559
Cash dividends declared (56,443) (51,474) (46,501)
Effect of pooling of interests acquisitions (222,229) -- 8,284
---------- ---------- ----------
Balance, End of Year $1,129,435 $1,201,537 $1,060,931
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The Comments on Financial Statements are an integral part of these
statements.
- ------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Illinois Tool Works Inc.:
We have audited the accompanying statement of financial position of Illinois
Tool Works Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1993 and 1992, and the related statements of income, income reinvested in the
business and cash flows for each of the three years in the period ended December
31, 1993. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Illinois Tool Works Inc. and
Subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
Chicago, Illinois,
February 9, 1994
Arthur Andersen and Co.
23
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
STATEMENT OF FINANCIAL POSITION
Illinois Tool Works Inc. and Subsidiaries
December 31
-------------------------
In thousands except shares 1993 1992
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 35,395 $ 31,193
Trade receivables 544,226 492,202
Inventories 403,902 400,605
Deferred income taxes 57,764 33,136
Prepaid expenses and other current assets 52,361 47,711
----------- ----------
Total current assets 1,093,648 1,004,847
----------- ----------
Plant and Equipment:
Land 65,134 36,253
Buildings 282,104 245,281
Machinery and equipment 771,066 687,467
Equipment leased to others 62,857 73,498
Construction in progress 24,718 30,834
----------- ----------
1,205,879 1,073,333
Accumulated depreciation (622,114) (549,217)
----------- ----------
Net plant and equipment 583,765 524,116
----------- ----------
Investment in Leveraged Leases 60,088 61,065
----------- ----------
Goodwill 363,769 356,616
----------- ----------
Other Assets 235,621 257,543
----------- ----------
$ 2,336,891 $2,204,187
----------- ----------
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt $ 107,073 $ 83,261
Accounts payable 149,205 138,165
Accrued expenses 233,932 200,480
Cash dividends payable 14,710 13,442
Income taxes payable 41,222 77,381
----------- ----------
Total current liabilities 546,142 512,729
----------- ----------
Non-current Liabilities:
Long-term debt 375,641 251,979
Deferred income taxes 92,470 54,137
Other 63,969 45,669
----------- ----------
Total non-current liabilities 532,080 351,785
----------- ----------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Stockholders' Equity:
Preferred stock -- --
Common stock:
Issued- 113,292,888 shares in 1993 and 112,156,582
shares in 1992 170,185 150,944
Income reinvested in the business 1,129,435 1,201,537
----------- -----------
1,299,620 1,352,481
Common stock held in treasury (1,955) (1,960)
Equity adjustment from foreign currency translation (38,996) (10,848)
----------- -----------
Total stockholders' equity 1,258,669 1,339,673
----------- -----------
$2,336,891 $2,204,187
----------- -----------
----------- -----------
</TABLE>
The Comments on Financial Statements are an integral part of this statement.
24
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
Illinois Tool Works Inc. and Subsidiaries
For the Years Ended December 31
--------------------------------------
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Provided by (Used for) Operating Activities:
Net income $206,570 $192,080 $180,559
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 131,726 122,631 115,393
Change in deferred income taxes (13,332) (4,104) (4,131)
(Gain)loss on sale of plant and equipment,
and investment properties 2,932 (351) (9,182)
(Gain)loss on sale of operations 894 (1,973) (1,668)
Other non-cash items, net 12,093 3,204 1,284
-------- -------- --------
Cash provided by operating activities 340,883 311,487 282,255
Change in assets and liabilities:
(INCREASE) DECREASE IN -
Trade receivables (35,029) (15,807) (2,372)
Inventories 23,191 26,661 66,837
Prepaid expenses and other assets (8,109) (14,114) (36,798)
INCREASE (DECREASE) IN -
Accounts payable (3,569) (16,496) (17,724)
Accrued expenses (2,954) (16,601) (39,537)
Income taxes payable (4,079) 10,229 (10,031)
Other, net 3,741 1,430 (3,169)
-------- -------- --------
Net cash provided by operating 314,075 286,789 239,461
activities -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cash Provided by (Used for) Investing Activities:
Acquisition of subsidiaries (excluding
cash and equivalents) and additional
interest in affiliates (303,802) (62,496) (120,649)
Additions to plant and equipment (119,931) (115,313) (106,036)
Proceeds from sale of plant and equipment,
and investment properties 14,174 12,975 24,363
Proceeds from sale of operating affiliates 1,705 3,584 103,607
Other, net 14,271 5,097 (8,697)
-------- -------- --------
Net cash used for investing activities (393,583) (156,153) (107,412)
-------- -------- --------
Cash Provided by (Used for) Financing Activities:
Cash dividends paid (55,175) (50,290) (44,108)
Issuance of common stock 8,316 10,962 9,498
Net proceeds (repayments) of short-term
debt 20,906 (96,014) 50,682
Proceeds from long-term debt 128,119 102,516 267,550
Repayments of long-term debt (15,939) (158,274) (364,753)
-------- -------- --------
Net cash provided by (used for)
financing activities 86,227 (191,100) (81,131)
-------- -------- --------
Effect of Exchange Rate Changes on Cash (2,517) (1,445) (4,588)
and Equivalents -------- -------- --------
Cash and Equivalents:
Increase (decrease) during the year 4,202 (61,909) 46,330
Beginning of year 31,193 93,102 46,772
-------- -------- --------
End of year $ 35,395 $ 31,193 $ 93,102
-------- -------- --------
-------- -------- --------
Cash Paid During the Year for Interest $ 33,052 $ 39,943 $ 35,233
-------- -------- --------
-------- -------- --------
Cash Paid During the Year for Income Taxes $127,874 $ 80,795 $105,140
-------- -------- --------
-------- -------- --------
Liabilities Assumed from Acquisitions $ 90,848 $ 5,094 $ 84,847
-------- -------- --------
-------- -------- --------
</TABLE>
The Comments on Financial Statements are an integral part of this statement.
25
<PAGE>
COMMENTS ON FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
COMMENTS AND ASSOCIATED SCHEDULES in this section furnish additional information
on items in the financial statements. The comments have been arranged in the
same order as the related items appear in the statements.
Significant accounting principles and policies of the Company are
highlighted in italics. Certain reclassifications of prior years' data have
been made to conform with current year reporting.
- --------------------------------------------------------------------------------
CONSOLIDATION AND TRANSLATION-The financial statements INCLUDE ILLINOIS TOOL
WORKS INC. AND MAJORITY-OWNED SUBSIDIARIES. ALL SIGNIFICANT INTERCOMPANY
TRANSACTIONS ARE ELIMINATED FROM THE STATEMENTS. The majority of the Company's
foreign subsidiaries have November 30 fiscal year-ends to facilitate inclusion
of their financial statements in the December 31 financial statements.
FOREIGN SUBSIDIARIES' ASSETS AND LIABILITIES ARE TRANSLATED TO U.S. DOLLARS
AT END-OF-PERIOD EXCHANGE RATES. REVENUES AND EXPENSES ARE TRANSLATED AT
AVERAGE RATES FOR THE PERIOD. TRANSLATION ADJUSTMENTS, OFFSET BY
CERTAIN FOREIGN CURRENCY HEDGE GAINS AND LOSSES, ARE NOT INCLUDED IN INCOME BUT
ARE REPORTED AS A SEPARATE COMPONENT OF STOCKHOLDERS' EQUITY.
INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION - The Company's operations are
divided into two segments: Engineered Components, and Industrial Systems and
Consumables. See Management's Discussion and Analysis for a description of the
segments and information regarding operating revenues and operating income.
No single customer accounted for more than 10% of consolidated revenues in
1993, 1992 or 1991. Export sales from the United States were less than 10% of
total operating revenues during these years.
Additional segment and geographic information for 1993, 1992 and 1991 was
as follows:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Identifiable Assets:
DOMESTIC--
Engineered Components $ 506,850 $ 382,271 $ 354,462
Industrial Systems and Consumables 620,263 617,654 623,837
---------- ---------- ----------
1,127,113 999,925 978,299
---------- ---------- ----------
INTERNATIONAL--
Engineered Components 429,370 434,416 423,685
Industrial Systems and Consumables 517,869 529,808 575,052
---------- ---------- ----------
947,239 964,224 998,737
---------- ---------- ----------
CORPORATE 262,539 240,038 280,103
---------- ---------- ----------
$2,336,891 $2,204,187 $2,257,139
---------- ---------- ----------
---------- ---------- ----------
Plant and Equipment Additions:
Engineered Components $ 80,672 $ 73,226 $ 66,952
Industrial Systems and Consumables 39,259 42,087 39,084
---------- ---------- ----------
$ 119,931 $ 115,313 $ 106,036
---------- ---------- ----------
---------- ---------- ----------
Depreciation:
Engineered Components $ 67,746 $ 55,992 $ 50,110
Industrial Systems and Consumables 42,106 44,470 41,304
---------- ---------- ----------
$ 109,852 $ 100,462 $ 91,414
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Identifiable assets by segment and geographic area are those assets that are
specifically used in that segment and geographic area.
Corporate assets are principally cash and equivalents, investments, goodwill and
other intangible assets.
26
<PAGE>
ACQUISITIONS AND DISPOSITIONS-In March, 1993, the Company acquired the Miller
Group Ltd. (Miller), a manufacturer of arc welding equipment. The acquisition
has been accounted for as a pooling of interests, and accordingly, the results
of operations have been included in the Statement of Income as of the beginning
of 1993. The impact of Miller on consolidated revenues, net income and earnings
per share for 1993, 1992 and 1991 was not significant. Therefore, prior years'
financial statements have not been restated to reflect the acquisition of
Miller.
During 1993, 1992 and 1991, the Company acquired and disposed of other
operations which did not materially affect consolidated results.
- --------------------------------------------------------------------------------
DEPRECIATION was $109,852,000 in 1993 compared with $100,462,000 in 1992 and
$91,414,000 in 1991 and was reflected primarily in operating costs. DEPRECIATION
OF PLANT AND EQUIPMENT FOR FINANCIAL REPORTING IS COMPUTED PRINCIPALLY ON AN
ACCELERATED BASIS. EQUIPMENT LEASED TO OTHERS IS DEPRECIATED OVER THE
NONCANCELABLE PERIOD OF THE RELATED LEASE.
RESEARCH AND DEVELOPMENT COSTS ARE RECORDED AS EXPENSE IN THE YEAR INCURRED.
These costs were $47,200,000 in 1993, $42,500,000 in 1992 and $40,300,000 in
1991.
RENTAL EXPENSE was $32,268,000 in 1993, $31,683,000 in 1992, and
$29,221,000 in 1991.
THE AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS has been reclassified
in 1993 from other income (expense) to an operating expense. Prior periods have
been reclassified to conform to the current year presentation.
OTHER INCOME (EXPENSE) consisted of the following:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income $ 6,596 $ 9,167 $ 7,686
Income from unconsolidated affiliates 1,584 2,888 7,472
Net reserves for disposition and relocation of
certain facilities, restructuring costs,
revaluation of non-operating assets to
realizable value, and nonrecurring costs
unrelated to operations (9,101) (2,622) 1,009
Gain on sale of investment properties -- 1,974 10,631
Gain(loss) on sale of operating affiliates (894) 1,973 1,668
Unamortized underwriting fees on zero coupon
bond redemption -- (1,767) --
Loss on sale of plant and equipment (2,932) (1,623) (1,449)
Other, net (2,952) (1,281) 1,575
-------- --------- --------
$(7,699) $ 8,709 $28,592
-------- --------- --------
-------- --------- --------
</TABLE>
27
<PAGE>
THE PROVISION FOR INCOME TAXES-Effective January 1, 1993, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes, using the current-year recognition approach. SFAS NO. 109
UTILIZES THE LIABILITY METHOD OF ACCOUNTING FOR INCOME TAXES. DEFERRED INCOME
TAXES ARE DETERMINED BASED ON THE ESTIMATED FUTURE TAX EFFECTS OF DIFFERENCES
BETWEEN THE FINANCIAL AND TAX BASES OF ASSETS AND LIABILITIES GIVEN THE
PROVISIONS OF THE ENACTED TAX LAWS. Prior to January 1, 1993, the income tax
provision was computed using Accounting Principles Board Opinion No. 11, which
is based on the income and expense in the Statement of Income. The adoption of
SFAS No. 109 had no material impact on the Company's results of operations in
1993.
The components of the provision for income taxes were as shown below:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Federal income taxes:
Current $ 95,406 $ 73,465 $ 49,957
Deferred (14,383) (4,224) (3,380)
Investment tax credits (727) (544) (469)
-------- -------- --------
80,296 68,697 46,108
-------- -------- --------
Foreign income taxes:
Current 28,239 37,915 56,137
Deferred 4,515 (1,737) (4,566)
-------- -------- --------
32,754 36,178 51,571
-------- -------- --------
State income taxes 16,250 12,825 9,521
-------- -------- --------
$129,300 $117,700 $107,200
-------- -------- --------
-------- -------- --------
</TABLE>
Income before income taxes for domestic and foreign operations was as follows:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $253,068 $224,041 $167,814
Foreign 82,802 85,739 119,945
-------- -------- --------
$335,870 $309,780 $287,759
-------- -------- --------
-------- -------- --------
</TABLE>
The reconciliation between the Federal statutory
tax rate and the effective tax rate was as
follows:
<TABLE>
<CAPTION>
1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory tax rate 35.0% 34.0% 34.0%
Increases(reductions):
State income taxes, net of Federal tax benefit 3.2 2.7 2.2
Amortization of goodwill and other intangible 1.1 1.7 1.7
assets
Difference between Federal statutory and
foreign tax rates 1.1 1.4 1.2
Other, net (1.9) (1.8) (1.8)
---- ---- ----
Effective tax rate 38.5% 38.0% 37.3%
---- ---- ----
---- ---- ----
</TABLE>
28
<PAGE>
Deferred U.S. Federal income taxes and foreign withholding taxes have not
been provided on $321,000,000 of undistributed earnings of international
affiliates as of December 31, 1993. In the event these earnings were
distributed to the Company, the Federal income taxes payable would be reduced by
foreign tax credits based on income tax laws and circumstances at the time of
distribution. The net tax effect would not be expected to be material.
The components of deferred income tax assets and liabilities were as
follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
December 31 January 1
-------------------------
In Thousands 1993 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred income tax assets:
Accrued expenses and reserves $ 30,085 $ 33,337
Inventory reserves and capitalized
tax cost 19,022 14,826
Employee benefit accruals 32,224 12,796
Net operating loss carryforwards 15,492 11,658
Accumulated depreciation 4,373 6,324
Allowances for uncollectible accounts 5,069 3,683
Other 8,141 8,422
-------- ----------
Gross deferred tax assets 114,406 91,046
Valuation allowance (8,189) (1,510)
-------- ----------
Net deferred tax assets 106,217 89,536
-------- ----------
Deferred income tax liabilities:
Leveraged leases (45,528) (49,300)
Acquisition asset write-ups (23,907) (32,196)
Accumulated depreciation (27,220) (27,439)
Pension assets (12,529) (11,701)
LIFO inventory (8,681) (9,405)
Other (23,058) (11,647)
-------- ----------
Deferred income tax liabilities (140,923) (141,688)
-------- ----------
Net deferred income tax
liability $(34,706) $ (52,152)
-------- ----------
-------- ----------
</TABLE>
NET INCOME PER SHARE OF COMMON STOCK IS COMPUTED ON THE BASIS OF THE AVERAGE
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING. Shares of common stock subject to
issuance under stock option plans are excluded from the computation
since their effect is not material. The average number of shares outstanding
was 112,979,000, 111,746,000 and 111,178,000 for 1993, 1992 and 1991,
respectively. Shares outstanding have been restated for the two-for-one stock
split in June 1993.
- -------------------------------------------------------------------------------
CASH AND EQUIVALENTS included interest bearing deposits of $28,506,000 at
December 31, 1993 and $28,510,000 at December 31, 1992. INTEREST BEARING
DEPOSITS HAVE MATURITIES OF 90 DAYS OR LESS AND ARE STATED AT COST, WHICH
APPROXIMATES MARKET.
TRADE RECEIVABLES as of December 31, 1993 and 1992 were net of allowances for
uncollectible accounts of $18,000,000 and $17,800,000, respectively.
29
<PAGE>
INVENTORIES at December 31, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
In thousands 1993 1992
- -------------------------------------------------------------------
<S> <C> <C>
Raw material $ 94,105 $ 83,441
Work-in-process 61,314 60,001
Finished goods 248,483 257,163
------- -------
$403,902 $400,605
------- -------
------- -------
</TABLE>
Inventories ARE STATED AT THE LOWER OF COST OR MARKET AND INCLUDE MATERIAL,
LABOR AND FACTORY OVERHEAD. THE LAST-IN, FIRST-OUT (LIFO) METHOD IS USED TO
DETERMINE THE COST OF THE INVENTORIES OF MOST DOMESTIC OPERATIONS. THE FIRST-
IN, FIRST-OUT (FIFO) METHOD IS USED FOR ALL OTHER INVENTORIES. Inventories
priced at LIFO were 46% and 37% of total inventories as of December 31, 1993 and
1992, respectively. Under the FIFO method, which approximates current cost,
total inventories would have been approximately $42,800,000 and $21,400,000
higher than reported at December 31, 1993 and 1992, respectively.
The LIFO inventory values of certain domestic subsidiaries of the Company
differ from the LIFO inventory values for tax purposes because of the
application of purchase accounting. Inventories for financial statement
purposes exceeded inventories for tax purposes by approximately $22,000,000 and
$21,000,000 at December 31, 1993 and 1992, respectively.
PLANT AND EQUIPMENT ARE STATED AT COST LESS ACCUMULATED DEPRECIATION. RENEWALS
AND IMPROVEMENTS THAT INCREASE THE USEFUL LIFE OF PROPERTY ARE CAPITALIZED.
MAINTENANCE AND REPAIRS ARE CHARGED TO EXPENSE AS INCURRED and were $53,800,000
in 1993, $58,700,000 in 1992 and $55,600,000 in 1991.
INVESTMENT IN LEVERAGED LEASES -- The Company has investments in leveraged
leases of equipment used primarily in the transportation, mining and paper
processing industries.
The components of the investment in leveraged leases at December 31, 1993 and
1992 were as shown below:
<TABLE>
<CAPTION>
In thousands 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Lease contracts receivable $52,652 $54,735
(net of principal and interest on nonrecourse financing)
Estimated residual value of leased assets 21,548 21,548
Unearned and deferred income (14,112) (15,218)
------- -------
Investment in leveraged leases 60,088 61,065
Deferred taxes arising from leveraged leases (45,528) (49,300)
------- -------
Net investment in leveraged leases $14,560 $11,765
------- -------
------- -------
</TABLE>
The components of the income from leveraged leases for the years ended December
31, 1993, 1992 and 1991 were as shown below:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Leveraged lease income (expense) before
income taxes $ 124 $ (76) $(143)
Investment tax credits recognized 727 544 469
Net income tax benefit (expense) (543) 235 255
----- ----- -----
$ 308 $ 703 $ 581
----- ----- -----
----- ----- -----
</TABLE>
30
<PAGE>
GOODWILL represents the excess cost over fair value of the net assets of
purchased businesses. Goodwill IS BEING AMORTIZED ON A STRAIGHT-LINE BASIS OVER
15 TO 40 YEARS. THE COMPANY ASSESSES THE RECOVERABILITY OF UNAMORTIZED GOODWILL
BY REVIEWING THE SUFFICIENCY OF ESTIMATED FUTURE OPERATING INCOME AND
UNDISCOUNTED CASH FLOWS OF THE RELATED ENTITY TO COVER THE AMORTIZATION DURING
THE REMAINING AMORTIZATION PERIOD.
Amortization expense was $13,268,000 in 1993, $12,262,000 in 1992 and
$10,621,000 in 1991.
Accumulated goodwill amortization was $64,822,000 and $51,420,000, at December
31, 1993 and 1992, respectively.
OTHER ASSETS as of December 31, 1993 and 1992 consisted of the following:
<TABLE>
<CAPTION>
In thousands 1993 1992
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other intangible assets $137,324 $127,233
Accumulated amortization of other intangible assets (73,569) (66,434)
Investment properties 39,455 68,188
Investment in and advances to unconsolidated affiliates 31,051 27,920
Prepaid assets 40,273 46,147
Other 61,087 54,489
-------- --------
$235,621 $257,543
-------- --------
-------- --------
</TABLE>
Other intangible assets represent patents, noncompete agreements and other
assets acquired with purchased businesses and ARE BEING AMORTIZED PRIMARILY ON A
STRAIGHT-LINE BASIS OVER ONE TO 17 YEARS.
Amortization expense was $8,606,000 in 1993, $9,907,000 in 1992 and
$13,358,000 in 1991.
Investment properties consist primarily of assets held for sale.
SHORT-TERM DEBT as of December 31, 1993 and 1992 consisted of the following:
<TABLE>
<CAPTION>
In thousands 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper $ 63,881 $30,000
Current maturities of long-term debt 2,619 3,703
Borrowings by foreign subsidiaries 40,573 49,558
-------- -------
$107,073 $83,261
-------- -------
-------- -------
</TABLE>
The weighted average interest rate on foreign borrowings was 7.7% at December
31, 1993 and 10.5% at December 31, 1992.
ACCRUED EXPENSES as of December 31, 1993 and 1992 consisted of accruals for:
<TABLE>
<CAPTION>
In thousands 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Compensation $135,855 $104,015
Taxes, other than income taxes 15,310 14,231
Customer deposits 10,677 17,728
Other 72,090 64,506
-------- --------
$233,932 $200,480
-------- --------
-------- --------
</TABLE>
31
<PAGE>
RETIREMENT PLANS-The Company sponsors defined contribution retirement plans
covering substantially all domestic employees. The Company's contributions to
these plans were $6,900,000 in 1993, $6,200,000 in 1992 and $5,800,000 in 1991.
The Company provides substantially all employees with pension benefits. The
Company's principal domestic plan provides benefits based on years of service
and compensation levels during the latter years of employment. Other domestic
and foreign plans provide benefits similar to the principal domestic plan.
In late 1992, the principal domestic pension plan was amended to provide an
early retirement supplement to be paid to future retirees from their early
retirement date to age 65. The pension supplement increased the prior service
cost as of December 31, 1992 by $25,700,000.
Subject to the limitation on deductibility imposed by Federal income tax
laws, the Company's policy has been to contribute funds to the plans annually in
amounts required to maintain sufficient plan assets to provide for accrued
benefits. Due to the current overfunded status of the principal plan, no
contributions to this plan were made in 1993, 1992 or 1991 and none are expected
to be made for the next several years. The previously mentioned amendment will
not significantly affect the status of future contributions. Other domestic
plan contributions were minimal in 1993, 1992 and 1991. Domestic plan assets
consist primarily of listed common stocks and debt securities.
The components of net pension expense for the years ended December 31, 1993,
1992 and 1991 were as shown below:
<TABLE>
<CAPTION>
In thousands 1993 1992 1991
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 21,757 $ 19,889 $ 19,554
Interest cost on projected benefit
obligation 29,832 25,348 24,041
Actual return on plan assets (48,002) (38,009) (50,545)
Net amortization and deferral 7,879 (5,560) 10,610
-------- -------- --------
Net pension expense $ 11,466 $ 1,668 $ 3,660
-------- -------- --------
-------- -------- --------
</TABLE>
The following table sets forth the funded status and amounts recognized in the
Company's Statement of Financial Position at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
In thousands 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested $(273,924) $ (45,591) $(217,997) $ (37,769)
Non-vested (55,103) (6,038) (42,916) (4,916)
--------- ---------- --------- ----------
Accumulated benefit obligation (329,027) (51,629) (260,913) (42,685)
Effect of projected wage increases (51,744) (2,606) (40,041) (2,521)
--------- ---------- --------- ----------
Projected benefit obligation (380,771) (54,235) (300,954) (45,206)
Plan assets at fair value 461,219 25,920 438,035 20,055
--------- ---------- --------- ----------
Plan assets in excess of (less than)
projected benefit obligation 80,448 (28,315) 137,081 (25,151)
Unrecognized net (gain)loss (49,009) 3,143 (93,340) (111)
Unrecognized prior service cost 42,427 3,273 33,719 3,514
Unrecognized transition (asset) liability (40,201) 1,028 (46,174) 1,117
Adjustment to recognize minimum liability -- (6,368) -- (3,691)
--------- ---------- --------- ----------
Prepaid (accrued) pension asset (liability) $ 33,665 $ (27,239) $ 31,286 $ (24,322)
--------- ---------- --------- ----------
--------- ---------- --------- ----------
</TABLE>
32
<PAGE>
The significant actuarial assumptions at December 31, 1993, 1992 and 1991 were
as follows:
<TABLE>
<CAPTION>
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic plans:
Discount rate 7.6% 8.5% 8.5%
Expected long-term rate of return on plan assets 9.0% 9.0% 9.0%
Rate of increase in future compensation levels 4.3% 6.1% 6.8%
Foreign plans:
Discount rate 5.5 - 9.0% 5.5 - 9.0% 5.5 - 9.0%
Expected long-term rate of return on plan assets 5.5 - 9.0% 5.5 - 10.0% 5.5 - 10.0%
</TABLE>
POSTRETIREMENT HEALTH CARE BENEFITS-The Company provides health care benefits to
substantially all retired domestic employees and their covered dependents.
Generally, employees who have reached age 55 and rendered 10 years of service
are eligible for these benefits, which are subject to retiree contributions,
deductibles, copayment provisions and other limitations.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions. This standard requires that the expected cost of
health care benefits be charged to expense during the service lives of employees
rather than the cash basis method previously used. The Company has elected to
amortize the unfunded accumulated postretirement benefit obligation (APBO) of
$145,500,000 as of January 1, 1993 over 20 years.
The assumed health care cost trend rate used in measuring the APBO at
December 31, 1993 was 10%, gradually declining to 5% in the year 1999 and
remaining at that level thereafter. The assumed discount rate was 7.6%. A one-
percentage point increase in the health care cost trend rate would increase the
APBO as of December 31, 1993 by approximately $15,383,000 and the sum of the
1993 annual service and interest cost by approximately $1,579,000.
Prior to 1993, the cost of providing postretirement health care benefits net
of retiree contributions was recognized as expense as claims were paid and
amounted to $8,900,000 in 1992 and $8,800,000 in 1991.
The cost of postretirement health care benefits under SFAS No. 106 for the
year ended December 31, 1993 was as shown below:
<TABLE>
<CAPTION>
In thousands 1993
- ---------------------------------------------------------------------------
<S> <C>
Service cost $ 2,312
Interest cost on accumulated postretirement benefit obligation 11,912
Amortizaton of transition obligation 6,968
-------
Net postretirement benefit cost $21,192
-------
-------
</TABLE>
The following table sets forth the amounts recognized in the Company's Statement
of Financial Position at December 31, 1993:
<TABLE>
<CAPTION>
In thousands 1993
- ----------------------------------------------------------------------------
<S> <C>
Accumulated postretirement benefit obligation:
Retirees $(112,876)
Active employees (31,439)
---------
(144,315)
Unrecognized transition obligation 137,283
Unrecognized net gain (3,470)
---------
Accrued postretirement benefit cost $ (10,502)
---------
---------
</TABLE>
33
<PAGE>
LONG-TERM DEBT at December 31, 1993 and 1992 consisted of the following:
<TABLE>
<CAPTION>
In thousands 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
Commercial paper $100,000 $100,000
7-1/2% notes due December 1, 1998 125,000 125,000
5-7/8% notes due March 1, 2000 125,000 --
Other, including capitalized lease obligations 28,260 30,682
-------- --------
378,260 255,682
Current maturities (2,619) (3,703)
-------- --------
$375,641 $251,979
-------- --------
-------- --------
</TABLE>
In March 1993, the Company issued $125,000,000 of 5-7/8% notes due March
1, 2000 at 99.744% of face value. The notes may not be redeemed by the Company
prior to maturity. The effective interest rate of the notes is 5.9%
In March 1993, the Company also entered into a $75,000,000 back-up credit
facility, which was subsequently canceled in January 1994. No borrowings were
made under this facility.
In August 1992, the Company entered into a $300,000,000 revolving credit
facility (RCF) expiring on August 14, 1997, which provides for borrowings under
a number of options and which may be reduced or canceled at any time at the
Company's option. There were no amounts outstanding under this facility as of
December 31, 1993.
The RCF contains financial covenants establishing a maximum total debt to
total capitalization percentage and a minimum consolidated tangible net worth.
The Company was in compliance with these covenants at December 31, 1993.
Commercial paper is issued at a discount and generally matures 30 to 90
days from the date of issue. The Company maintains unused commitments under
the RCF equal to any commercial paper borrowings. The commercial paper balance
expected to remain outstanding beyond one year has been classified as
long-term in the accompanying Statement of Financial Position, reflecting the
Company's intent and ability to finance the borrowings on a long-term basis.
The remaining commercial paper balance has been classified as short-term. The
weighted average interest rate on commercial paper outstanding was 3.3% at
December 31, 1993, and 3.4% at December 31, 1992.
In December 1991, the Company issued $125,000,000 of 7-1/2% notes due
December 1, 1998 at 99.892% of face value. The notes may not be redeemed by
the Company prior to maturity. The effective interest rate of the notes is
7.6%.
Other debt bears interest at rates ranging from 3.0% to 13.9%, with
maturities through the year 2017. Some of the debt is collateralized by plant
and equipment.
Scheduled maturities of long-term debt for the years ended December 31
are as follows:
<TABLE>
<CAPTION>
In thousands
- ------------------------------------------------------------
<S> <C>
1995 $ 2,874
1996 2,582
1997 105,202
1998 126,997
1999 and future years 137,986
--------
$375,641
--------
--------
</TABLE>
PREFERRED STOCK, without par value, of which 300,000 shares are authorized, is
issuable in series. The Board of Directors is authorized to fix by resolution
the designation and characteristics of each series of preferred stock. The
Company has no present commitments to issue any preferred stock.
34
<PAGE>
- -------------------------------------------------------------------------------
COMMON STOCK, without par value, and COMMON STOCK HELD IN TREASURY transactions
during 1993, 1992 and 1991 were as shown below.
On May 7, 1993, the Board of Directors authorized a two-for-one split of the
Company's common stock, with a distribution date of June 18, 1993, at a rate of
one additional share for each common share held by stockholders of record on
June 1, 1993. All per-share data in this report is calculated on a post-split
basis.
In 1991, the stockholders approved an amendment to the Certificate of
Incorporation increasing the number of authorized shares of common stock from
80,000,000 to 150,000,000.
<TABLE>
<CAPTION>
Common Stock
Common Stock Held in Treasury
-------------------------- ----------------------
Dollars in thousands Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1990 54,878,826 $129,876 (74,284) $(2,034)
During 1991-
Stock options exercised 290,692 5,898 22,667 1,370
Shares surrendered on exercise
of stock options (14,746) (901) (22,667) (1,370)
Tax benefits related to stock
options exercised and restricted
stock -- 2,873 -- --
Shares issued for acquisitions 608,005 608 -- --
Shares issued for stock incentive
grants and restricted stock 29,597 1,628 -- --
---------- ------- -------- -------
Balance, December 31, 1991 55,792,374 139,982 (74,284) (2,034)
During 1992-
Stock options exercised 288,917 8,274 5,552 356
Shares surrendered on exercise
of stock options (3,000) (190) (5,552) (356)
Tax benefits related to stock
options exercised and restricted
stock -- 2,776 -- --
Restricted stock grant -- 102 2,700 74
---------- ------- -------- -------
Balance, December 31, 1992 56,078,291 150,944 (71,584) (1,960)
During 1993-
Adjustment to reflect the June 1993
stock split 56,078,291 -- (71,584) --
Stock options exercised 403,558 5,693 27,348 991
Shares surrendered on exercise
of stock options (5,274) (194) (27,348) (991)
Tax benefits related to stock
options exercised and restricted
stock -- 2,114 -- --
Shares issued for acquisitions 718,810 10,931 -- --
Shares issued for stock incentive grants
and restricted stock 19,212 697 400 5
----------- -------- -------- -------
Balance, December 31, 1993 113,292,888 $170,185 (142,768) $(1,955)
----------- -------- -------- -------
----------- -------- -------- -------
Authorized, December 31, 1993 150,000,000
-----------
-----------
</TABLE>
35
<PAGE>
STOCK OPTIONS have been issued to officers and other employees under the
Company's 1979 Stock Incentive Plan. At December 31, 1993, 5,346,472 shares
were reserved for issuance under the plans. Option prices are 100% of the
common stock fair market value on the date of grant.
Stock incentive grants have been awarded to key employees and are based on
the attainment of target performance objectives over a three year period.
EXPENSE RELATED TO THESE GRANTS IS RECORDED OVER THE AWARD PERIOD BASED ON THE
EXCESS OF THE CURRENT FAIR MARKET VALUE OVER THE GRANT VALUE.
Stock option transactions during 1993, 1992 and 1991 were as shown below:
<TABLE>
<CAPTION>
Number of Shares Price per Share
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under option at December 31, 1990 2,515,904 $ 1.38 to $23.57
During 1991-
Granted 865,200 27.13 to 29.75
Exercised (626,718) 3.57 to 20.69
Canceled or expired (26,802) 16.13 to 20.69
---------
Under option at December 31, 1991 2,727,584 1.38 to 29.75
During 1992-
Granted 25,582 31.44 to 32.50
Exercised (588,938) 1.38 to 29.75
Canceled or expired (61,402) 16.13 to 29.75
---------
Under option at December 31, 1992 2,102,826 7.13 to 32.50
During 1993-
Granted 688,008 36.38 to 37.00
Exercised (430,906) 7.13 to 29.75
Canceled or expired (25,402) 20.69 to 29.75
---------
Under option at December 31, 1993 2,334,526 8.19 to 37.00
---------
---------
Exercisable at December 31, 1993 1,244,793 8.19 to 32.50
Reserved for grant - December 31, 1992 3,524,416
- December 31, 1993 3,011,946
</TABLE>
- ------------------------------------------------------------------------------
CASH DIVIDENDS DECLARED were $.50 per share in 1993, $.46 per share in 1992 and
$.42 per share in 1991.
36
<PAGE>
OTHER FINANCIAL INFORMATION
- -------------------------------------------------------------------------------
QUARTERLY CONSOLIDATED OPERATING RESULTS (UNAUDITED)
were as summarized below:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Three Months Ended
- -----------------------------------------------------------------------------------------------------------------------------
March 31 June 30 September 30 December 31
In thousands except ------------------ ------------------ ------------------ ------------------
per share amounts 1993 1992 1993 1992 1993 1992 1993 1992
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenues $750,022 $669,494 $829,318 $717,108 $779,536 $710,591 $800,305 $714,452
Operating costs(a) 508,887 444,105 556,998 471,958 527,854 470,428 528,547 472,261
Operating income(a) 77,585 74,147 101,935 93,156 93,529 86,257 112,513 90,363
Net income 42,027 40,237 54,799 51,171 50,946 49,125 58,798 51,547
Net income per share(b) .37 .36 .49 .46 .45 .44 .52 .46
<FN>
(a) Restated for the reclassification of the amortization of goodwill and other
intangible assets.
(b) Restated for the two-for-one stock split in June 1993.
</TABLE>
COMMON STOCK PRICE AND DIVIDEND DATA-The common stock of Illinois Tool Works
Inc. is listed on the New York Stock Exchange and the Chicago Stock Exchange.
Quarterly market price and dividend data for 1993 and 1992, restated for the
two-for-one stock split June 1993 were as shown below:
<TABLE>
<CAPTION>
Market Price
Per Share Dividends
---------------- Paid
High Low Per Share
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
1993
First quarter $39 $32-1/2 $.12
Second quarter 38-3/4 34-7/8 .12
Third quarter 40-1/2 35-1/4 .12
Fourth quarter 39-7/8 36 .13
1992
First quarter $34-1/8 $31 $.11
Second quarter 32-7/8 28-1/2 .11
Third quarter 34-3/8 28-7/8 .11
Fourth quarter 34 29-7/8 .12
</TABLE>
The approximate number of holders of record of common stock as of March 8, 1994
was 3,600. This number does not include beneficial owners of the Company's
securities held in the name of nominees.
37
<PAGE>
ELEVEN YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share amounts 1993 1992 1991 1990 1989 1988
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Operating revenues $3,159,181 2,811,645 2,639,650 2,544,153 2,172,747 1,929,805
Operating costs $2,122,286 1,858,752 1,759,288 1,686,423 1,450,116 1,287,297
Selling, administrative and research and development expenses $ 629,459 586,801 552,874 510,276 417,874 369,138
Amortization of goodwill and other intangible assets $ 21,874 22,169 23,979 19,181 15,829 13,106
Operating income $ 385,562 343,923 303,509 328,273 288,928 260,264
Interest expense $ (35,025) (42,852) (44,342) (39,190) (30,995) (26,109)
Amortization of retiree health care $ (6,968) -- -- -- -- --
Other income (expense) $ (7,699) 8,709 28,592 10,800 11,089 (1,343)
Income before income taxes $ 335,870 309,780 287,759 299,883 269,022 232,812
Income taxes $ 129,300 117,700 107,200 117,500 105,200 92,800
Net income $ 206,570 192,080 180,559 182,383 163,822 140,012
Per share $ 1.83 1.72 1.62 1.68 1.53 1.33
FINANCIAL POSITION:
Net working capital $ 547,506 492,118 442,041 615,055 440,406 392,283
Plant and equipment, net $ 583,765 524,116 525,695 483,549 413,578 342,794
Total assets $2,336,891 2,204,187 2,257,139 2,150,307 1,687,985 1,380,237
Long-term debt $ 375,641 251,979 307,082 430,632 334,407 225,907
Total debt $ 482,714 335,240 489,189 495,952 370,507 257,597
Stockholders' equity $1,258,669 1,339,673 1,212,051 1,091,842 871,124 744,727
OTHER DATA:
Operating income:
Return on operating revenues % 12.2 12.2 11.5 12.9 13.3 13.5
Net income:
Return on operating revenues % 6.5 6.8 6.8 7.2 7.5 7.3
Return on average stockholders' equity % 15.9 15.1 15.7 18.6 20.3 20.7
Cash dividends paid $ 55,175 50,290 44,108 35,861 28,747 23,027
Per share - paid $ .49 .45 .40 .33 .27 .22
- declared $ .50 .46 .42 .35 .28 .23
Book value per share $ 11.12 11.96 10.88 9.96 8.12 7.05
Long-term debt to total capitalization % 23.0 15.8 20.2 28.3 27.7 23.3
Total debt to total capitalization % 27.7 20.0 28.8 31.2 29.8 25.7
Shares outstanding:
At December 31 113,150 112,014 111,436 109,610 107,332 105,588
Average during year 112,979 111,746 111,178 108,872 107,028 105,350
Plant and equipment additions $ 119,931 115,313 106,036 101,183 84,263 84,107
Depreciation $ 109,852 100,462 91,414 82,913 68,890 62,064
Research and development expenses $ 47,200 42,500 40,300 40,300 32,500 26,588
Employees at December 31 19,000 17,800 18,700 18,400 15,700 14,200
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Dollars and shares in thousands except per share amounts 1987 1986 1985 1984 1983
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME:
Operating revenues $1,698,353 961,077 596,127 592,253 497,821
Operating costs $1,117,990 622,310 390,501 382,299 325,022
Selling, administrative and research and development expenses $ 339,143 223,765 123,292 115,845 104,594
Amortization of goodwill and other intangible assets $ 16,812 8,635 715 630 317
Operating income $ 224,408 106,367 81,619 93,479 67,888
Interest expense $ (33,439) (14,468) (1,917) (1,914) (2,433)
Amortization of retiree health care $ -- -- -- -- --
Other income (expense) $ 8,815 51,384 (9,755) 7,139 17,433
Income before income taxes $ 199,784 143,283 69,947 98,704 82,888
Income taxes $ 93,600 63,700 38,400 38,700 33,300
Net income $ 106,184 79,583 31,547 60,004 49,588
Per share $ 1.03 .78 .31 .60 .50
FINANCIAL POSITION:
Net working capital $ 332,290 293,575 172,201 182,698 168,717
Plant and equipment, net $ 318,690 317,829 137,001 118,889 108,695
Total assets $1,334,063 1,309,886 521,850 483,953 449,811
Long-term debt $ 309,515 468,269 9,995 11,101 11,578
Total debt $ 357,249 503,998 17,618 17,457 17,328
Stockholders' equity $ 608,541 476,550 403,439 377,557 339,952
OTHER DATA:
Operating income:
Return on operating revenues % 13.2 11.1 13.7 15.8 13.6
Net income:
Return on operating revenues % 6.3 8.3 5.3 10.1 10.0
Return on average stockholders' equity % 19.6 18.1 8.1 16.7 15.5
Cash dividends paid $ 20,144 18,295 17,095 15,648 14,375
Per share - paid $ .20 .18 .17 .16 .15
- declared $ .20 .18 .18 .16 .15
Book value per share $ 5.88 4.65 4.00 3.76 3.40
Long-term debt to total capitalization % 33.7 49.6 2.4 2.9 3.3
Total debt to total capitalization % 37.0 51.4 4.2 4.4 4.8
Shares outstanding:
At December 31 103,560 102,508 100,796 100,304 99,846
Average during year 103,272 102,206 100,558 100,138 99,650
Plant and equipment additions $ 61,052 44,722 39,062 39,248 24,491
Depreciation $ 57,839 37,213 27,312 25,742 24,039
Research and development expenses $ 24,739 13,161 7,795 8,029 6,022
Employees at December 31 13,600 13,700 7,300 7,800 7,300
<FN>
Note: All amounts and ratios have been restated for the reclassification of the
amortization of goodwill and other intangible assets.
All share and per share amounts have been restated for the two-for-one
stock split in June 1993.
</TABLE>
39
<PAGE>
EXHIBIT 21
MARCH 1994
ILLINOIS TOOL WORKS INC.
SUBSIDIARIES AND AFFILIATES
<TABLE>
<CAPTION>
PERCENT
COMPANY RELATIONSHIP OWNERSHIP
------- ------------ ---------
<S> <C> <C>
Accu-Lube Manufacturing GmbH - Germany Affiliate 50%
Action Fasteners Pty. Ltd. - Australia (1) Subsidiary 100%
Andrex Radiation Products A/S - Denmark Subsidiary 100%
Andrex NDT Products (UK) Ltd. - England (2) Subsidiary 100%
Automated Label Systems Company - Ohio (3) Affiliate 50%
Automated Label Systems Productions GmbH - Austria (4) Subsidiary 100%
Balance Engineering Corporation - Delaware Subsidiary 100%
Buell Industries, Inc. - Delaware Subsidiary 100%
Cintas Inyectadas Citex S.A. - Spain (5) Subsidiary 100%
Coding Products Inc. - Michigan (6) Subsidiary 100%
Crones & Co. GmbH - Germany (7) Subsidiary 100%
Cumberland Leasing Co. - Illinois Subsidiary 100%
Denepark Pty Ltd. - Australia Subsidiary 100%
Devcon Limited - Ireland Subsidiary 100%
Devcon de Mexico S.A. - Mexico Subsidiary 100%
DeVilbiss Ransburg de Mexico S.A. de C.V. - Mexico (8) Subsidiary 100%
DeVilbiss Holding, S.A. - France Subsidiary 100%
DeVilbiss Ransburg Equipmentos Para Pintura Industrial Ltda - Brazil Subsidiary 100%
Envases Multipac, S.A. de C.V. - Mexico Affiliate 49%
Etanco, S.A. - Spain (9) Subsidiary 10%
Fixlock A.B. - Sweden Subsidiary 100%
Gema Volstatic AG - Switzerland (8) Subsidiary 100%
Gema Volstatic S.A. - France (8) Subsidiary 100%
Gerrard-Signode Pte. Ltd. - Singapore Affiliate 49%
Glen Lake Venture - Illinois Affiliate 50%
Gunther S.A. - France (10) Subsidiary 100%
ITW Asia (Pte.) Limited - Singapore Subsidiary 100%
ITW Austria Vertriebs - Ges.m.b.H. - Austria Subsidiary 100%
ITW Ateco GmbH - West Germany (7) Subsidiary 100%
ITW Befestigungssyteme GmbH - West Germany (11) Subsidiary 100%
ITW Bevestigingssystemen B.V. - Netherlands (12) Subsidiary 100%
ITW Belgium S.A. - Belgium Subsidiary 100%
ITW Canada Inc. - Canada Subsidiary 100%
ITW de Argentina S.A. - Argentina (13) Subsidiary 100%
ITW de France S.A. - France (10) Subsidiary 100%
ITW (Deutschland) GmbH - West Germany (8) Subsidiary 100%
ITW Development Corporation - Illinois Subsidiary 100%
ITW do Brasil Participacoes Ltda. - Brazil Subsidiary 100%
ITW Dynatec Kabushiki Kaisha - Japan Affiliate 50%
ITW Dynatec Klebetechnik Holding GmbH - Germany (7) Subsidiary 100%
ITW Espana S.A. - Spain (14) Subsidiary 100%
ITW Fastex Italia S.p.A. - Italy Subsidiary 100%
ITW Finishing Systems & Products Pty. Ltd. - Australia Subsidiary 100%
ITW Fixations - France (15) Subsidiary 100%
ITW Fixfast AB - Sweden Subsidiary 70%
ITW Hi-Cone Holdings - Ireland (16) Subsidiary 100%
ITW Hi-Cone - Ireland (17) Subsidiary 100%
I.T.W. Inc. - Illinois Subsidiary 100%
ITW Industriesysteme GmbH - West Germany (18) Subsidiary 100%
ITW Industry Co., Ltd. - Japan (19) Subsidiary 100%
ITW International Inc. - Delaware Subsidiary 100%
ITW Italia S.p.A. - Italy Subsidiary 100%
ITW Korea Inc. - Korea Subsidiary 100%
ITW Limited - England Subsidiary 100%
ITW Mapri Industria e Commercio Ltda. - Brazil (20) Subsidiary 94.3%
ITW Meritex Sdn Bhd - Malaysia (21) Subsidiary 100%
ITW Mima Europe S.A. - France (10) Subsidiary 100%
ITW Nederland B.V. - Netherlands Subsidiary 100%
ITW New Zealand - New Zealand Subsidiary 100%
ITW-Nifco Inc. - Delaware Affiliate 50%
ITW Oberflachentechnik GmbH - Germany (7) Subsidiary 100%
ITW Overseas Holdings Inc. - Delaware Subsidiary 100%
ITW Overseas Investment Corp. - Delaware Subsidiary 100%
ITW Packaging Corporation - Delaware Subsidiary 100%
ITW Participations S.A. - France Subsidiary 100%
ITW Polska Inc. - Delaware Subsidiary 100%
ITW Polska Sp. z o.o. - Poland (22) Subsidiary 100%
ITW Shelf Corporation - Delaware Subsidiary 100%
ITW Signode India Limited - India Affiliate 29%
ITW South America Inc. - Delaware Subsidiary 100%
ITW Surface & Finition S.A. - France (23) Subsidiary 100%
ITW Switches Asia Ltd. - Taiwan Subsidiary 100%
</TABLE>
<PAGE>
PAGE 2... MARCH 1994
ILLINOIS TOOL WORKS INC. SUBSIDIARIES AND AFFILIATES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENT
COMPANY RELATIONSHIP OWNERSHIP
------- ------------ ---------
<S> <C> <C>
I.T.W. (Thailand) Co., Ltd. - Thailand Subsidiary 100%
ITW XP Inc. - Delaware Subsidiary 100%
Impex Essen Vertrieb von Werkzeugen GmbH - Germany (7) Subsidiary 100%
Impex Walcar B.V. - Netherlands (12) Subsidiary 100%
IMSA Signode, S.A. de C.V. - Mexico Affiliate 50%
Inmobiliaria Cit, S.A. de C.V. - Mexico Affiliate 49%
Indiana Pickling and Processing Company - Indiana (24) Affiliate 35%
Jambro Ltd. - New Zealand Subsidiary 100%
Jambro Pty. Ltd. - Australia (1) Subsidiary 100%
Kormag Industries e Comercio Ltda. - Brazil Affiliate 40%
Liljendals Bruk Ab - Finland Subsidiary 100%
Macon Klebetechnik GmbH - Germany (25) Subsidiary 100%
Maple Control Company - Michigan Subsidiary 100%
Maple Roll Leaf Company, Inc. - Michigan (26) Subsidiary 100%
Meritex (Penang) Sdn. Bhd. - Malaysia (21) Subsidiary 100%
Meritex Plastic Industries, Inc. - Texas Subsidiary 100%
Meypack Verpackungs und Palettiertechnik GmbH - West Germany (7) Subsidiary 100%
Millham Road Facility Inc. - Indiana (8) Subsidiary 100%
Miller Automation, Inc. - Wisconsin (27) Subsidiary 100%
Miller Electric Mfg. Co. - Wisconsin (27) Subsidiary 100%
Miller Europe, S.p.A. - Italy (28) Subsidiary 100%
Miller Group France S.A., The - France Subsidiary 100%
Miller Group, Ltd., The - Wisconsin Subsidiary 100%
Miller Insurance, Ltd. - Bermuda (27) Subsidiary 100%
Miller Services of Appleton, Ltd. - Wisconsin (27) Subsidiary 100%
Miller Thermal, Inc. - Wisconsin (27) Subsidiary 100%
Mima, Inc. - Florida Subsidiary 100%
Minigrip Inc. - Delaware Subsidiary 100%
N. A. Woodworth Company - Michigan Subsidiary 100%
Nifco Hi-Cone Leasing Company Limited - Japan Affiliate 40%
Odesign, Inc. - Illinois Subsidiary 100%
Pro/Mark Corporation - Connecticut Subsidiary 100%
Packaging Leasing Systems Inc. - Delaware Subsidiary 80%
Paslode Corporation - Illinois Subsidiary 100%
Paslode Corporation - Florida - Florida (28) Subsidiary 100%
Paslode S.A.R.L. - France (10) Subsidiary 100%
Plastiglide Manufacturing Corporation - Delaware Subsidiary 100%
Ransburg Comercial Ltda. - Brazil (8) Subsidiary 100%
Ransburg Corporation - Indiana Subsidiary 100%
Ransburg Equipamentos Industrials Ltda. - Brazil (30) Affiliate 50%
Ransburg-Gema KK - Japan (8) Subsidiary 100%
Ransburg-Gema Limited - Indiana (8) Subsidiary 100%
Ransburg-Gema s.r.l. - Italy (8) Subsidiary 100%
Ransburg Industrial Finishing K.K. - Japan (31) Subsidiary 100%
Ransburg Manufacturing Corporation - Indiana (8) Subsidiary 100%
Scanilec B.V. - Netherlands (12) Subsidiary 100%
Shippers Paper Products Company - Ohio Subsidiary 100%
Signode B.V. - Netherlands (12) Subsidiary 100%
Signode Bernpak GmbH - West Germany Subsidiary 100%
Signode Bernpak, Inc. - Delaware Subsidiary 100%
Signode Corporation - Oklahoma Subsidiary 100%
Signode France - France (10) Subsidiary 100%
Signode Hong Kong Limited - Hong Kong Subsidiary 100%
Signode International Trading Corporation - Illinois Subsidiary 100%
Signode Kabushiki Kaisha - Japan Subsidiary 100%
Signode Overseas Inc. of Illinois - Illinois Subsidiary 100%
Signode Packaging Systems Limited - East Africa Affiliate 20%
Signode Pickling Corporation - Delaware Subsidiary 100%
Signode Systems GmbH - West Germany Subsidiary 100%
Simco (Europe) B.V. - Netherlands (8) Subsidiary 100%
Simco Japan Kabushiki Kaisha - Japan (32) Affiliate 50%
Simco (Nederland) B.V. - Netherlands (33) Subsidiary 100%
Societe de Prospection et D'Invention Techniques - France (10) Subsidiary 100%
Societe Novvelle SARL Provence Plastic - France (15) Subsidiary 100%
Steinmax GmbH - Germany (7) Subsidiary 100%
Vortec Corporation - Ohio (8) Subsidiary 100%
W.A. Deutsher Pty. Ltd. - Australia Subsidiary 100%
Waterbury Buckle Company - Connecticut Subsidiary 100%
</TABLE>
<PAGE>
PAGE 3... MARCH 1994
ILLINOIS TOOL WORKS INC. SUBSIDIARIES AND AFFILIATES
- --------------------------------------------------------------------------------
<TABLE>
<FN>
<C> <S>
(1) Wholly owned by W.A. Deutsher Pty. Ltd.
(2) Ownership interest is by Andrex Radiation Products A/S
(3) Ownership interest is by ITW Packaging Corporation
(4) Wholly owned by Automated Label Systems Company
(5) Wholly owned by ITW Espana S.A.
(6) 80% owned by Maple Control Company; 20% owned by Illinois Tool Works Inc.
(7) Wholly owned by ITW (Deutschland) GmbH
(8) Wholly owned by Ransburg Corporation
(9) Ownership interest is by ITW Espana S.A.
(10) Wholly owned by ITW Participations S.A.
(11) 64% owned by ITW (Deutschland) GmbH; 36% owned by ITW Ateco GmbH
(12) Wholly owned by ITW Nederland B.V.
(13) Wholly owned by ITW South America Inc.
(14) Wholly owned by ITW International Inc.
(15) Wholly owned by Societe de Prospection et D'Invention Techniques
(16) .1% owned by ITW Overseas Holdings Inc.; 99.9% by ITW Overseas Investment
Corp.
(17) .1% owned by ITW Overseas Holdings Inc.; 99.9% by ITW Hi-Cone Holdings
(18) Wholly owned by Signode Bernpak GmbH
(19) Wholly owned by Ransburg-Gema KK
(20) 94% owned by Illinois Tool Works Inc.; .3% owned by ITW do Brasil
Participacoes Ltda.
(21) Wholly owned by Meritex Plastic Industries, Inc.
(22) Wholly owned by ITW Polska Inc.
(23) Wholly owned by DeVilbiss Holding, S.A. - France
(24) Ownership interest is by Signode Pickling Corporation
(25) Wholly owned by ITW Dynatec Klebetechnik Holding GmbH
(26) Wholly owned by Maple Control Company
(27) Wholly owned by The Miller Group, Ltd.
(28) Wholly owned by Miller Electric Mfg. Co.
(29) Wholly owned by Paslode Corporation
(30) Ownership interest is by Ransburg Comercial Ltda.
(31) 60% owned by Ransburg-Gema K.K.; 40% owned by Illinois Tool Works Inc.
(32) Ownership interest is by Ransburg Corporation
(33) Wholly owned by Simco (Europe) B.V.
</TABLE>
<PAGE>
EXHIBIT 22
ILLINOIS TOOL WORKS INC.
3600 WEST LAKE AVENUE
GLENVIEW, ILLINOIS 60025
March 28, 1994
PROXY STATEMENT
For the Annual Meeting of Stockholders of Illinois Tool Works Inc.
To Be Held on May 6, 1994
ELECTION OF DIRECTORS
Eleven directors of the Company are to be elected to hold office until the
next Annual Meeting or until their successors are duly elected and qualified or
until their earlier resignation or removal. Edward F. Swift, a director of the
Company since 1972, is retiring from the Board of Directors as a result of
attaining the Company's mandatory retirement age for directors. The Board of
Directors thanks Mr. Swift for his services to the Company over the years. Susan
Crown has been recommended by the Nominating Committee, as well as by the Board
as a whole, to fill the vacancy created by Mr. Swift's retirement.
The favorable vote of the holders of a majority of the Common Stock present
in person or represented by proxy at the meeting is necessary to elect each of
the eleven directors. Votes withheld and abstentions are treated as votes
against the election of directors. Broker non-votes are treated as shares as to
which the beneficial holders have not granted voting power and, therefore, as
shares not entitled to vote. Unless otherwise directed, the proxies will be
voted at the meeting for the election of the persons listed below, or in the
event of an unforeseen contingency, for different persons as substitutes. Set
forth below are the name, age, principal occupation and other information
concerning each nominee.
Julius W. Becton, Jr. (67)
President, Prairie View A&M University since 1989. Mr. Becton served as
Director of the Federal Emergency Management Agency from 1985 to 1989 after 40
years of commissioned service in the U.S. Army, during which he attained the
rank of Lieutenant General. He is a director of Marine Spill Response
Corporation and Metters Industries, Inc., and has been a director of the
Company since 1992.
1
<PAGE>
Silas S. Cathcart (67)
Former Chairman, Kidder, Peabody Group, Inc. (investment banking) from January
1989 through December 1989, Chairman and Chief Executive Officer from February
1988 to January 1989, and President and Chief Executive Officer from May 1987
to February 1988. In May 1986, Mr. Cathcart retired as Chairman of Illinois
Tool Works Inc., a position that he had held since 1972. Mr. Cathcart is a
director of Baxter International Inc., General Electric Company and The Quaker
Oats Company, and has been a director of the Company since 1964.
Susan Crown (35)
Vice President, Henry Crown and Company since 1984. Henry Crown and Company is
a family owned and operated company with investments in securities, real
estate, resort properties and manufacturing operations. Ms. Crown is a
director of Baxter International Inc. She also is a trustee and executive
committee member of Rush-Presbyterian-St. Luke's Medical Center in Chicago and
president and a director of the Juvenile Protective Association.
Richard M. Jones (67)
Former Chairman and Chief Executive Officer, Guaranty Federal Savings Bank
from 1989 to 1991. Mr. Jones was President of Sears, Roebuck and Co.
(diversified merchandise, insurance, real estate and financial services) from
1986 to 1988 and Chief Financial Officer from 1980 to 1988. Mr. Jones is a
director of Applied Power Inc., Baker, Fentress & Co., Guaranty Federal
Savings Bank and MCI Communications Corp., and has been a director of the
Company since 1988.
George D. Kennedy (67)
Chairman, Mallinckrodt Group Inc. (animal and human health) since 1991;
Chairman and Chief Executive Officer from 1986 to 1991. Mr. Kennedy is a
director of American National Can Corporation, Brunswick Corporation, Kemper
National Insurance Company, Kemper Corporation, Mallinckrodt Group Inc.,
Medical Care America, Inc., Scotsman Industries, Inc. and Stone Container
Corporation, and has been a director of the Company since 1988.
Richard H. Leet (67)
Former Vice Chairman, Amoco Corporation (oil and chemicals) from March 1991 to
October 1991 and Executive Vice President from 1983 through February 1991. Mr.
Leet is a director of Landauer, Inc. and Vulcan Materials Corp., and has been
a director of the Company since 1988.
Robert C. McCormack (54)
Partner, Trident Capital, Inc. (venture capital) since January 1993; Assistant
Secretary of the Navy from 1990 to 1993; Deputy Under Secretary of Defense
from 1987 to 1990; and Managing Director, Morgan Stanley & Co. Incorporated
(investment banking) from 1985 to 1987. Mr. McCormack has been a director of
the Company since 1993 and was previously a director from 1978 through 1987.
John D. Nichols (63)
Chairman and Chief Executive Officer of the Company since May 1986; President
and Chief Executive Officer from January 1982 to May 1986. Mr. Nichols is a
director of Household International, Inc., Philip Morris Cos., Inc., Rockwell
International Corporation and Stone Container Corporation. He has been a
director of the Company since 1981.
Phillip B. Rooney (49)
President and Chief Operating Officer, WMX Technologies, Inc. (environmental
services) since 1985; Chairman and Chief Executive Officer, Wheelabrator
Technologies Inc. (waste-to-energy) since 1990; and Chairman of the Board,
Rust International Inc. (engineering, design and construction services) since
January 1993. Mr. Rooney is a director of Caremark International Inc.,
Chemical Waste Management, Inc., Rust International Inc., The ServiceMaster
Company, Urban Shopping Centers, Inc., Waste Management International plc,
Wheelabrator Technologies Inc. and WMX Technologies, Inc. and has been a
director of the Company since 1990.
2
<PAGE>
Harold B. Smith (60)
Chairman of the Executive Committee of the Company since 1982. Mr. Smith is a
director of W.W. Grainger, Inc. and Northern Trust Corporation and a trustee
of The Northwestern Mutual Life Insurance Company. He has been a director of
the Company since 1968.
Ormand J. Wade (54)
Former Vice Chairman, Ameritech Corp. (telecommunications products and
services) from 1989 to 1993; President of the Ameritech Bell Group from 1987
to 1989; and President and Chief Executive Officer, Illinois Bell Telephone
Company from 1982 through 1986. Mr. Wade is a director of Andrew Corporation,
NBD Bancorp, Inc. and Westell Inc. He has been a director of the Company since
1985.
DIRECTORS' COMPENSATION
Compensation for non-employee directors consists of a $25,000 annual fee
plus $1,000 for each Board of Directors meeting and committee meeting attended.
Committee Chairmen receive an additional $600 for each meeting chaired. The
Company's deferred fee plan permits non-employee directors to defer receipt of
all or any part of their fees. Amounts deferred are credited with interest at
current rates and are paid after an individual ceases to be a director. Retired
non-employee directors also receive an annual payment equal to one-half of the
annual retainer paid to an active director on the date of retirement so long as
the retired director serves the Company in an advisory capacity and refrains
from any activity adverse to the best interests of the Company.
In January 1992 all incumbent non-employee directors also received, pursuant
to a restricted stock grant program, 600 shares (as adjusted for the two-for-one
stock split) of the Company's Common Stock, one-third of which shares vest
annually on the anniversary dates of the grant, except that all shares vest on
the date of retirement in accordance with Board policy or on the date of death.
Non-employee directors elected to the Board after January 1992 received
proportionate awards pursuant to such program in January of the year following
their election to the Board. None of the restricted shares issued to
non-employee directors under this program may be sold or transferred prior to
January 2, 1995 so long as such non-employee director is still serving on the
Company's Board. The shares granted to the non-employee directors pursuant to
this program are included in the table under "Security Ownership."
3
<PAGE>
SECURITY OWNERSHIP
The following table sets forth information regarding ownership of the
Company's Common Stock as of March 8, 1994 by each director and nominee for
director, by each of the named executive officers, by all directors, nominees
and executive officers as a group, and by other persons who, to the knowledge of
the Company, own of record or beneficially more than 5% of the outstanding
Common Stock of the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME OF BENEFICIAL OWNER OR GROUP OWNERSHIP(1) PERCENT OF CLASS
--------------------------------- ------------------ ----------------
<S> <C> <C>
Directors and Nominees --
Julius W. Becton, Jr................................................... 400 *
Silas S. Cathcart...................................................... 220,974(2) *
Susan Crown............................................................ -- --
Richard M. Jones....................................................... 4,600 *
George D. Kennedy...................................................... 860 *
Richard H. Leet........................................................ 3,600 *
Robert C. McCormack.................................................... 7,285,400(3)(4) 6.4
Phillip B. Rooney...................................................... 4,600 *
Harold B. Smith........................................................ 19,802,290(4)(5) 17.5
Edward F. Swift........................................................ 11,800(6) *
Ormand J. Wade......................................................... 1,000 *
Executive Officers --
H. Richard Crowther.................................................... 189,448(7)(8) *
W. James Farrell....................................................... 57,436(7)(9) *
Robert H. Jenkins...................................................... 15,535(7)(10) *
John D. Nichols........................................................ 414,856(11) *
Frank S. Ptak.......................................................... 26,452(7) *
All Directors, Nominees and Executive Officers
as a Group (24 Persons)................................................ 20,937,358(7) 18.5
Other Principal Beneficial Owners --
Edward Byron Smith, Jr................................................. 7,607,256(4)(12) 6.7
The Northern Trust Company............................................. 21,800,516(13) 19.3
<FN>
- ---------
* Less than 1% of Class
(1) Unless otherwise noted, ownership is direct.
(2) Includes 17,920 shares owned by Mr. Cathcart's wife, for which he disclaims
beneficial ownership; 11,664 shares owned by a trust as to which Mr.
Cathcart has sole voting and investment power; 560 shares owned by a trust
as to which Mr. Cathcart shares voting and investment power; and 3,000
shares owned by a charitable organization of which Mr. Cathcart is
president and a director.
(3) Includes 3,760 shares held in a revocable living trust as to which Mr.
McCormack has sole voting and investment power, 200 shares owned in a trust
as to which he shares voting and investment power with The Northern Trust
Company and 7,281,240 shares as described in Footnote 4.
(4) Robert C. McCormack, Harold B. Smith, Edward Byron Smith, Jr. and The
Northern Trust Company are trustees of twelve trusts owning 7,281,240
shares as to which they share voting and investment power.
(5) Includes 151,338 shares held in a revocable living trust as to which Harold
B. Smith has sole voting and investment power, 11,053,216 shares owned in
twelve trusts as to which he shares voting and investment power with The
Northern Trust Company, 1,079,240 shares owned in seven trusts as to which
he shares voting and investment power, and 7,281,240 shares as described in
Footnote 4. In addition, Mr. Smith is a director of a charitable
organization that owns 45,256 shares.
(6) Includes 3,200 shares owned by Mr. Swift's wife, for which he disclaims
beneficial ownership.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(7) Includes shares covered by stock options exercisable within 60 days of
March 8, 1994 as follows: Mr. Crowther, 58,450; Mr. Farrell, 40,996; Mr.
Jenkins, 15,000; Mr. Ptak, 23,500; and all directors, nominees and
executive officers as a group, 265,196.
(8) Includes 130,998 shares held in a revocable living trust as to which Mr.
Crowther shares voting and investment power.
(9) Includes 2,212 shares held by Mr. Farrell as custodian for his minor
children.
(10) Includes 99 shares allocated to Mr. Jenkins' account in the Company's
savings and investment plan.
(11) Includes 363,838 shares held in a family partnership of which Mr. Nichols
is general partner and shares voting and investment powers, 7,200 shares
owned by Mr. Nichols' wife, for which Mr. Nichols disclaims beneficial
ownership, 6,148 shares held by Mrs. Nichols as custodian for their minor
children, for which he disclaims beneficial ownership, and 3,440 shares
allocated to Mr. Nichols' account in the Company's savings and investment
plan. In addition Mr. Nichols is co-trustee of a charitable foundation
which owns 28,630 shares. In September 1993, Mr. Nichols filed a Form 5 to
report a gift to this foundation of 31,130 shares of Common Stock (as
adjusted for the two-for-one stock split) on December 31, 1992. This was
his only transaction in 1992 reportable on Form 5, and such form should
have been filed in February 1993.
(12) Includes 10,874 shares owned in a trust as to which Edward Byron Smith, Jr.
has sole voting and investment power, 96,200 shares owned in a trust as to
which The Northern Trust Company has sole voting and investment power,
122,392 shares owned in three trusts as to which Mr. Smith shares voting
and investment power, and 7,281,240 shares as described in Footnote 4. Also
includes the following shares held for the benefit of Mr. Smith's minor
children: 65,190 shares owned in two trusts as to which The Northern Trust
Company has sole voting and investment power; 6,720 shares held in a trust
as to which Mr. Smith and his wife share voting and investment power; 9,320
shares held in a trust as to which Mr. Smith's wife and sisters share
voting and investment power; and 4,400 shares owned in two trusts as to
which Mr. Smith's sisters share voting and investment power.
(13) Includes its holdings as trustee described in Footnotes 3, 4, 5, and 12.
The Northern Trust Company and its affiliates act as sole fiduciary or
co-fiduciary of trusts and other fiduciary accounts which own an aggregate
of 21,800,516 shares. They have sole voting power with respect to 2,349,909
shares and share voting power with respect to 18,732,658 shares. They have
sole investment power with respect to 1,956,319 shares and share investment
power with respect to 19,727,903 shares. In addition, The Northern Trust
Company holds in other accounts, but does not beneficially own, 10,563,684
shares, resulting in aggregate holdings by The Northern Trust Company of
32,364,200 shares (28.6%).
</TABLE>
Because of their holdings individually and as trustees, the holdings of
their immediate families and/or their positions with the Company, Robert C.
McCormack, Edward Byron Smith Jr. and Harold B. Smith may be deemed to be
"controlling persons" of the Company within the meaning of the Securities Act of
1933, as amended.
The Company maintains normal commercial banking relationships with The
Northern Trust Company, which also acts as the trustee under the Company's
pension plan and as the trustee and an investment manager of the Company's
savings and investment plan. The Northern Trust Company is a wholly owned
subsidiary of Northern Trust Corporation. Harold B. Smith, director of the
Company, is also a director of Northern Trust Corporation.
With respect to the addresses of beneficial owners of more than 5% of the
Company's Common Stock, The Northern Trust Company's address is 50 South LaSalle
Street, Chicago, IL 60675 and the address of each of the other principal
beneficial owners is c/o The Secretary, Illinois Tool Works Inc., 3600 West Lake
Avenue, Glenview, IL 60025.
5
<PAGE>
EXECUTIVE COMPENSATION
The table below summarizes the compensation of the Chief Executive Officer
and the other four most highly compensated Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------------
AWARDS
----------------------
ANNUAL COMPENSATION SECURITIES
------------------------------------------------ RESTRICTED UNDERLYING PAYOUTS
NAME AND OTHER ANNUAL STOCK OPTIONS ---------------
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(1)(2) COMPENSATION($)(3) AWARDS($) (#)(4) LTIP PAYOUTS($)
- ---------------------- ---- ------------ -------------- ------------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
John D. Nichols ...... 1993 600,000 567,600 -- -- 50,000 1,015,111(5)
Chairman and Chief 1992 580,584 530,900 -- -- -- 782,097(5)
Executive Officer 1991 516,664 435,000 -- -- -- 769,552(5)
H. Richard 1993 272,000 258,000 -- -- 42,708 --
Crowther ............
Vice Chairman 1992 263,651 250,000 -- -- 6,082 --
1991 245,412 167,700 -- -- 30,000 --
W. James Farrell ..... 1993 242,000 228,000 -- -- 36,996 --
Executive 1992 233,448 146,000 -- -- -- --
Vice President 1991 224,167 163,070 -- -- 20,000 --
Robert H. Jenkins .... 1993 200,000 177,000 -- -- 30,000 --
Executive 1992 186,805 150,000 -- -- -- --
Vice President 1991 175,000 87,675 -- -- 20,000 152,500(6)
Frank S. Ptak ........ 1993 180,000 177,000 -- -- 30,000 139,758(6)
Executive 1992 172,500 173,000 -- -- -- --
Vice President 1991 150,000 70,500 -- -- 15,000 42,166(6)
<CAPTION>
NAME AND ALL OTHER
PRINCIPAL POSITION COMPENSATION($)
- ---------------------- ---------------
<S> <C>
John D. Nichols ...... 4,461(7)(8)
Chairman and Chief 6,866(7)
Executive Officer 6,667(7)
H. Richard 2,062(7)(8)
Crowther ............
Vice Chairman 6,866(7)
7,510(7)
W. James Farrell ..... 1,763(7)(8)
Executive 6,866(7)
Vice President 4,238(7)
Robert H. Jenkins .... 1,457(7)(8)
Executive 5,452(7)
Vice President 5,085(7)
Frank S. Ptak ........ 1,365(7)(8)
Executive 5,003(7)
Vice President 4,500(7)
<FN>
- ------------
(1) Includes any amounts deferred under the Company's 1993 Executive
Contributory Retirement Income Plan and/or the Savings and Investment Plan.
(2) Amounts awarded under the Executive Incentive Compensation Plan for the
respective years.
(3) Perquisites and other personal benefits, securities or property in the
aggregate do not exceed the threshold reporting level of the lesser of
$50,000 or 10% of total salary and bonus reported for the named executive
officer.
(4) Stock option grants have been adjusted where appropriate to reflect the 2
for 1 stock split effective June 1993.
(5) For 1993, the market value of 20,000 phantom stock units, the vesting of
which was approved by the Compensation Committee on February 18, 1994 to be
effective March 31, 1994, was $875,000 (as of March 8, 1994 for this
disclosure); and interest and dividends credited on 244,000 shares in the
Phantom Stock account totaled $140,111. For 1992, the market value at the
time of vesting (December 11, 1992) for 20,000 phantom stock units was
$628,750, and interest and dividends credited on 264,000 shares in Mr.
Nichols' Phantom Stock account during 1992 were $153,347. For 1991, the
market value at the time of vesting (March 31, 1992) of 20,000 phantom
stock units was $653,750, and interest and dividends credited on 244,000
shares in Mr. Nichols' Phantom Stock account during 1991 were $115,802. The
Compensation Committee previously authorized the distribution to Mr.
Nichols on December 31, 1992 of (i) the market value of and accrued
dividends and interest on the 20,000 phantom stock units vested for 1992
totaling $659,683, and (ii) the market value of and accrued dividends and
interest on 20,000 phantom stock units earned in 1991 totaling $668,567.
Other than the December 31, 1992 distribution referred to in the previous
sentence, all vested units and accrued interest and dividends are being
held for Mr. Nichols in his Phantom Stock account and have not been
distributed. Units have been adjusted where appropriate to reflect the 2
for 1 stock split effective June 1993.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
(6) Cash and market value of Common Stock paid in 1993 and 1991 in respect of
performance share appreciation units granted under the Company's 1979 Stock
Incentive Plan for two three-year performance periods ended December 31,
1992 and 1990.
(7) Company matching contribution to the executive officer's account in the
Savings and Investment Plan. For 1993 the amounts are: Mr. Nichols, $4,143;
Mr. Crowther, $1,878; Mr. Farrell, $1,670; Mr. Jenkins, $1,381; and Mr.
Ptak, $1,243.
(8) Interest credited on deferred compensation in excess of 120% of the
Applicable Federal Long Term Rate: Mr. Nichols, $318; Mr. Crowther, $184;
Mr. Farrell, $93; Mr. Jenkins, $76; and Mr. Ptak, $122.
</TABLE>
The table below sets forth, as to the Executive Officers listed in the
Summary Compensation Table, information with respect to options granted during
1993.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES AT ASSUMED ANNUAL RATES OF
UNDERLYING % OF TOTAL EXERCISE OR STOCK PRICE APPRECIATION
OPTIONS OPTIONS GRANTED BASE FOR OPTION TERM(2)
GRANTED TO EMPLOYEES PRICE EXPIRATION ----------------------------
NAME (#) IN 1993 ($/SH) DATE 0% ($) 5% ($) 10% ($)
- ------------------ ---------- --------------- ----------- ---------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John D. Nichols... 50,000(3) 7.5 36.375 12/10/03 0 1,144,000 2,899,000
H. Richard
Crowther......... 30,000(3) 4.5 36.375 12/10/03 0 686,000 1,739,000
12,708(4) 1.9 36.625 12/08/99 0 182,000 421,000
W. James
Farrell.......... 30,000(3) 4.5 36.375 12/10/03 0 686,000 1,739,000
6,996(4) 1.0 36.875 12/11/97 0 67,000 148,000
Robert H.
Jenkins.......... 30,000(3) 4.5 36.375 12/10/03 0 686,000 1,739,000
Frank S. Ptak..... 30,000(3) 4.5 36.375 12/10/03 0 686,000 1,739,000
<FN>
- ---------
(1) These grants contain a reload feature providing that if the exercise price
is paid by surrender of previously owned shares of Common Stock, a new
option in the amount of the shares surrendered will be granted. The
exercise price of the new option will be the market value of a share of
Common Stock on the date of grant. The new option will become exercisable
in one year, providing the shares acquired on exercise of the underlying
option are held for one year, and will expire on the same date as the
underlying option.
(2) The dollar amounts under these columns are the result of calculations at
0% and at the 5% and 10% rates set by the Securities and Exchange
Commission. They are therefore not intended to forecast possible future
appreciation, if any, of the Company's Common Stock price and do not
reflect any income tax liability of the individual recipients at the time
of exercise nor the time value of money. The Company did not use an
alternative formula for a grant date valuation, as the Company is not
aware of any formula which will determine with reasonable accuracy a
present value based on future unknown or volatile factors.
(3) These grants were made on December 10, 1993. The exercise price is the
closing market price of a share of Common Stock on the date of grant, and
the options become exercisable at the rate of 25% each year following the
first full year after the grant.
(4) These grants were made on February 23, 1993 (Mr. Crowther) and March 5,
1993 (Mr. Farrell) in connection with the exercise of previously granted
options containing a reload feature and have been adjusted for the 2 for 1
stock split effective June 1993.
</TABLE>
7
<PAGE>
The table below sets forth, as to the Executive Officers listed in the
Summary Compensation Table, information as to option exercises during 1993 as
well as the number and value of unexercised options as of December 31, 1993.
AGGREGATED OPTION EXERCISES IN 1993
AND 1993 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR END (#) AT YEAR END ($)(1)
SHARES --------------------- --------------------
ACQUIRED ON VALUE EXER- UNEXER- EXER- UNEXER-
NAME EXERCISE(#) REALIZED($) CISABLE(2) CISABLE(2) CISABLE(2) CISABLE(2)
- ------------------------------ ----------- ----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John D. Nichols............... -- -- -- 50,000 -- 131,250
H. Richard Crowther........... 28,900 540,594 45,742 57,708 841,805 247,682
W. James Farrell.............. 16,000 232,000 34,000 46,966 532,000 186,117
Robert H. Jenkins............. -- -- 15,000 40,000 184,063 171,250
Frank S. Ptak................. -- -- 23,500 37,500 439,750 148,125
<FN>
- ---------
(1) Based on the year-end closing market price of the Company's Common Stock
($39.00).
(2) Adjusted where appropriate for the 2 for 1 stock split effective June
1993.
</TABLE>
RETIREMENT PLANS
The Company's principal non-contributory defined benefit Pension Plan covers
substantially all employees of the parent company and certain domestic
subsidiaries. Executive Officers participate in this plan on the same basis as
do more than 10,000 other eligible employees. Benefit amounts are based on years
of service and average monthly compensation for the five highest consecutive
years out of the last ten years of employment. The Company did not make any
contributions to the Pension Plan during the year ended December 31, 1993.
The following table illustrates the maximum estimated annual benefits to be
paid upon normal retirement at age 65 under the formula described above to
individuals in specified compensation and years of service classifications. The
table does not reflect the limitations contained in the Internal Revenue Code of
1986 on benefit accruals under the Pension Plan. Under a plan adopted by the
Board of Directors, supplemental payments in excess of those limitations will be
made to participants designated by the Compensation Committee in order to
maintain benefits upon retirement at the levels provided under the Pension
Plan's formula.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL NORMAL RETIREMENT BENEFITS(1)
--------------------------------------------------------------------
YEARS OF SERVICE AT NORMAL RETIREMENT(2)
COMPENSATION(3) 10 15 20 25 30 35 40
- -------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 300,000........... $ 49,500 $ 74,250 $ 99,000 $123,750 $148,500 $159,750 $171,000
400,000........... 66,000 99,000 132,000 165,000 198,000 213,000 228,000
600,000........... 99,000 148,500 198,000 247,500 297,000 319,500 342,000
800,000........... 132,000 198,000 264,000 330,000 396,000 426,000 456,000
1,000,000.......... 165,000 247,500 330,000 412,500 495,000 532,500 570,000
1,200,000.......... 198,000 297,000 396,000 495,000 594,000 639,000 684,000
1,400,000.......... 231,000 346,500 462,000 577,500 693,000 745,500 798,000
<FN>
- ---------
(1) Amounts shown exceed actual amounts by .65% of Social Security covered
compensation for each year of service up to 30 years.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
(2) Years of service as of December 31, 1993 for the five most highly
compensated Executive Officers were as follows: Mr. Nichols, 24.2 years;
Mr. Crowther, 35.0 years; Mr. Farrell, 28.5 years; Mr. Jenkins, 14.6
years; Mr. Ptak, 18.1 years. The years of service for Mr. Nichols reflect
the Company's agreement to provide him pension benefits to which he
otherwise would be entitled if his service with certain previous employers
had been with the Company.
(3) Compensation includes all amounts shown under the columns "Salary" and
"Bonus" in the Summary Compensation Table.
</TABLE>
The Company's 1982 Executive Contributory Retirement Income Plan provided
certain executives designated by the Compensation Committee the opportunity to
supplement their retirement benefits in exchange for salary reductions during
the four year period 1983 through 1986. Four of the five named Executive
Officers included in the Summary Compensation Table elected to have their
salaries reduced by 10%. During the period of salary reduction the executives
could not contribute to and did not receive the Company's matching contribution
in the Savings and Investment Plan. Under the 1982 Plan, annual benefits payable
beginning at the normal retirement age of 65 for 15 years are as follows: Mr.
Nichols, $107,658; Mr. Crowther, $62,477; Mr. Farrell, $113,529; and Mr.
Jenkins, $70,240.
9
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports dated February 9, 1994 included or incorporated by reference in
this Form 10-K into the Company's previously filed registration statements on
Form S-8 (File No. 33-8510), Form S-4 (File No. 33-22403) and Form S-3 (File No.
33-5780).
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 25, 1994
<PAGE>
EXHIBIT 24
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Julius W. Becton, Jr.
----------------------------
(signature)
Julius W. Becton, Jr.
----------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Edward F. Swift
-------------------------------
(signature)
Edward F. Swift
-------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Ormand J. Wade
-------------------------------
(signature)
Ormand J. Wade
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Robert C. McCormack
-------------------------------
(signature)
Robert C. McCormack
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Phillip B. Rooney
-------------------------------
(signature)
Phillip B. Rooney
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Richard H. Leet
-------------------------------
(signature)
Richard H. Leet
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) George D. Kennedy
-------------------------------
(signature)
George D. Kennedy
-------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Richard M. Jones
-------------------------------
(signature)
Richard M. Jones
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Harold B. Smith
-------------------------------
(signature)
Harold B. Smith
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) Silas S. Cathcart
-------------------------------
(signature)
Silas S. Cathcart
--------------------------------
(printed name)
<PAGE>
ILLINOIS TOOL WORKS INC.
Form 10-K Annual Report
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned whose signature appears
below constitutes and appoints John D. Nichols, Harold B. Smith, H. Richard
Crowther and Stewart S. Hudnut, and each of them, his true and lawful attorneys-
in-fact and agents, with full power of substitution and resubstitution for him
and in his name, place and stead, in any and all capacities, to sign the
Company's Form 10-K Annual Report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
18th day of February, 1994.
(s) John D. Nichols
-------------------------------
(signature)
John D. Nichols
--------------------------------
(printed name)
