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Press Release: ITW Reports Fourth Quarter and -3-

· 02/05/2021 08:00
Twelve Months Ended Dollars in millions December 31, 2020 ------------------------- Total debt $ 8,122 Net income $ 2,109 Add: Interest expense 206 Other income (28) Income taxes 595 Depreciation 273 Amortization and impairment of intangible assets 154 ------------------- EBITDA $ 3,309 === ============== Total debt to EBITDA ratio 2.5 x === ============== Media Contact Investor Relations Illinois Tool Works Illinois Tool Works Trisha Knych Karen Fletcher Tel: 224.661.7566 Tel: 224.661.7433 mediarelations@itw.com investorrelations@itw.com ----------------------- --------------------------Three Months Ended Twelve Months Ended December 31, December 31, --------------------- ------------------------ Dollars in millions 2020 2019 2020 2019 ---------- --------- ----------- ----------- Net cash provided by operating activities $773 $774 $2,807 $2,995 Less: Additions to plant and equipment (68) (82) (236) (326) ---- --- ---- ------ ------ Free cash flow $705 $692 $2,571 $2,669 === === === ===== ===== Net income $642 $641 $2,109 $2,521 === === === ===== ===== Free cash flow to net income conversion rate 110 % 108 % 122 % 106 % ==== ==== ====== ======Twelve Months Ended December 31, 2019 ---------------------------- Dollars in millions Income Taxes Tax Rate ---------------- ---------- As reported $ 767 23.3% Discrete tax benefit related to third quarter 21 0.7% ---------------- ------ As adjusted $ 788 24.0% ==== ========== ======Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ Dollars in millions 2020 2019 2020 2019 ----------- ----------- ----------- ----------- Operating income $ 883 $ 824 $2,882 $3,402 Tax rate 22.1 % 22.8 % 22.0 % 24.0 % Income taxes (194) (188) (633) (815) ------ ------ ------ ------ Operating income after taxes $ 689 $ 636 $2,249 $2,587 ===== ===== ===== ===== Invested capital: Trade receivables $2,506 $2,461 $2,506 $2,461 Inventories 1,189 1,164 1,189 1,164 Net assets held for sale -- 280 -- 280 Net plant and equipment 1,777 1,729 1,777 1,729 Goodwill and intangible assets 5,471 5,343 5,471 5,343 Accounts payable and accrued expenses (1,818) (1,689) (1,818) (1,689) Other, net (385) (481) (385) (481) ------ ------ ------ ------ Total invested capital $8,740 $8,807 $8,740 $8,807 ===== ===== ===== ===== Average invested capital $8,606 $8,797 $8,576 $9,028 ===== ===== ===== ===== After-tax return on average invested capital 32.0 % 28.9 % 26.2 % 28.7 % ====== ====== ====== ======Full Year 2020 vs Full Year 2019 Favorable/(Unfavorable) ------------------------------------------------------------------------------------------------------------------------------- Test & Measurement Operating Automotive Food and Polymers & Construction Specialty Revenue OEM Equipment Electronics Welding Fluids Products Products Total ITW -------------- -------------- ----------- --------------- ---------- ---------- -------------- ------------- ---------- Organic (16.0) % (20.6) % (4.9) % (11.8) % (1.4) % 1.5% (8.2) % (9.8) % Acquisitions/ Divestitures -- % -- % (2.8) % (3.7) % -- % --% (0.8) % (0.9) % Translation (0.1) % 0.1 % 0.3 % -- % (1.4) % 0.2% (0.1) % (0.2) % -------------- ------ ------ ----- --- ----- ----- ----- ------ ----- ----- Operating Revenue (16.1) % (20.5) % (7.4) % (15.5) % (2.8) % 1.7% (9.1) % (10.9) % ============== ====== ====== ===== === ===== ===== ===== ====== ===== ===== Full Year 2020 vs Full Year 2019 Favorable/(Unfavorable) --------------------------------------------------------------------------------------------------------------- Test & Measurement Polymers Change in Operating Automotive Food and & Construction Specialty Margin OEM Equipment Electronics Welding Fluids Products Products Total ITW ---------- --------- ----------- ------- -------- ------------ --------- --------- (220) Operating Leverage (330) bps (540) bps (130) bps bps (30) bps 30 bps (180) bps (230) bps Changes in Variable Margin & OH Costs (90) bps (140) bps 120 bps 60 bps 180 bps 130 bps 90 bps 70 bps -------------------- ---------- --------- ----------- ------- -------- ------------ --------- --------- (160) Total Organic (420) bps (680) bps (10) bps bps 150 bps 160 bps (90) bps (160) bps Acquisitions/ Divestitures -- -- 40 bps 60 bps -- -- 40 bps 10 bps Restructuring/Other 50 bps -- (10) bps 40 bps 50 bps 30 bps 60 bps 30 bps -------------------- ---------- --------- ----------- ------- -------- ------------ --------- --------- Total Operating (60) Margin Change (370) bps (680) bps 20 bps bps 200 bps 190 bps 10 bps (120) bps ==================== ========== ========= =========== ======= ======== ============ ========= ========= Total Operating Margin % * 17.8% 19.6% 25.8% 27.1% 24.8% 25.5% 26.0% 22.9% * Includes 50 bps 80 bps 250 bps 20 bps 330 bps 30 bps 90 bps 130 bps** unfavorable operating margin impact of amortization expense from acquisition-related intangible assets -------------------- ---------- --------- ----------- ------- -------- ------------ --------- --------- ** Amortization expense from acquisition-related intangible assets had an unfavorable impact of ($0.37) on GAAP earnings per share for 2020. ---------------------------------------------------------------------------------------------------------------

SEGMENT DATA (UNAUDITED)

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

AFTER-TAX RETURN ON AVERAGE INVESTED CAPITAL (UNAUDITED)

A reconciliation of the 2019 effective tax rate excluding the third quarter 2019 discrete tax benefit of $21 million is as follows:

ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

GAAP to NON-GAAP RECONCILIATIONS (UNAUDITED)

FREE CASH FLOW (UNAUDITED)

TOTAL DEBT TO EBITDA (UNAUDITED)

(END) Dow Jones Newswires

February 05, 2021 08:00 ET (13:00 GMT)