8-KEarnings & ResultsExhibits & Filings

ILLINOIS TOOL WORKS INC 8-K Report, Financial Results (Jul 20, 2010)

Filed July 20, 2010For Securities:ITW

Summary

Illinois Tool Works Inc. (ITW) filed an 8-K on July 20, 2010, to report its second quarter 2010 results of operations. The company highlighted its focus on key financial metrics, including free operating cash flow and return on average invested capital (ROIC). Free operating cash flow is presented as a crucial measure of internally generated cash available for dividends, acquisitions, share repurchases, and debt repayment, offering investors insight into the company's ability to fund strategic initiatives. ITW also emphasized ROIC as a measure of operational effectiveness in utilizing invested capital for profit generation. The company provided definitions for both metrics, noting potential differences in calculation methods compared to other companies, and directed investors to the furnished press release and conference call presentation for further details and reconciliations. The filing's primary purpose is to provide investors with timely information on the company's financial performance and strategic financial management during the second quarter of 2010.

Key Highlights

  • 1ITW announced its second quarter 2010 results of operations via an 8-K filing.
  • 2The company emphasized its use of Free Operating Cash Flow as a key performance indicator.
  • 3Free Operating Cash Flow is defined as cash available for dividends, acquisitions, share repurchases, and debt repayment.
  • 4ITW also highlighted Return on Average Invested Capital (ROIC) as a measure of operational effectiveness.
  • 5The company provided specific definitions for Free Operating Cash Flow and ROIC.
  • 6ITW acknowledged that its calculation of these metrics may differ from industry peers.
  • 7Detailed financial information and reconciliations are available in the furnished press release (Exhibit 99.1) and conference call presentation (Exhibit 99.2).

Frequently Asked Questions

ITW is highlighting Free Operating Cash Flow, which measures cash available for dividends, acquisitions, share repurchases, and debt repayment, and Return on Average Invested Capital (ROIC), which measures the effectiveness of its operations in generating profits from invested capital.

The detailed financial results and reconciliations for ITW's second quarter 2010 are available in the press release furnished as Exhibit 99.1 and the presentation from the second quarter conference call furnished as Exhibit 99.2.

ITW defines Free Operating Cash Flow as cash flow generated by operations that is available for dividends, acquisitions, share repurchases, and debt repayment. They note it is not the same as net cash flow from operating activities per the statement of cash flows and may not be consistent with similar measures used by other companies.

ITW defines ROIC as a measure of the effectiveness of its operations' use of invested capital to generate profits. Invested capital excludes cash and cash equivalents and outstanding debt, and average invested capital is calculated using balances at the start of the year and at the end of each quarter. They also mention their method may differ from other companies.