ITWCombinedVer2

Welcome to ITW’sAnnual Investor

MeetingNew York CityDecember 1, 2006



Today’s AgendaToday’s Agenda7:45 – 8:30 a.m. Breakfast buffet

8:30 – 8:40 a.m. David SpeerChairman and Chief Executive OfficerWelcome and overview

8:40 – 9:40 a.m. Tom HansenVice ChairmanAsia: A Growing Opportunity for ITW

9:40 – 10:30 a.m. Ron KroppChief Financial OfficerCapital Structure and other Financial Topics

10:30 – 10:45 a.m. Break

10:45 – 12:15 p.m. David Speer Eugene OsterkornChairman and and Vice President, Chief Executive Officer Controller Operations

ITW Overview/General Q&A

12:30 p.m. Lunch

Meeting Concludes

7:45 – 8:30 a.m. Breakfast buffet

8:30 – 8:40 a.m. David SpeerChairman and Chief Executive OfficerWelcome and overview

8:40 – 9:40 a.m. Tom HansenVice ChairmanAsia: A Growing Opportunity for ITW

9:40 – 10:30 a.m. Ron KroppChief Financial OfficerCapital Structure and other Financial Topics

10:30 – 10:45 a.m. Break

10:45 – 12:15 p.m. David Speer Eugene OsterkornChairman and and Vice President, Chief Executive Officer Controller Operations

ITW Overview/General Q&A

12:30 p.m. Lunch

Meeting Concludes

ITW Forward – Looking StatementsITW Forward – Looking StatementsThis meeting contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding end market and business conditions as well as associated base revenue assumptions. These statements are subject to certain risks, uncertainties, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that may influence future results include (1) a downturn in the construction, automotive, general industrial, food institutional and retail, or real estate markets, (2) deterioration in business and economic conditions, particularly in North America, the European Community or Asia/Pacific, (3) the unfavorable impact of foreign currency fluctuations and costs of raw materials, (4) an interruption in, or reduction in, introducing new products into the Company’s product lines and (5) an unfavorable environment for making acquisitions, domestic and international, including adverse accounting or regulatory requirements and market values of candidates, and (6) unfavorable tax law changes and tax authority rulings. The risks covered here are not all inclusive and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

This meeting contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements regarding end market and business conditions as well as associated base revenue assumptions. These statements are subject to certain risks, uncertainties, and other factors, which could cause actual results to differ materially from those anticipated. Important risks that may influence future results include (1) a downturn in the construction, automotive, general industrial, food institutional and retail, or real estate markets, (2) deterioration in business and economic conditions, particularly in North America, the European Community or Asia/Pacific, (3) the unfavorable impact of foreign currency fluctuations and costs of raw materials, (4) an interruption in, or reduction in, introducing new products into the Company’s product lines and (5) an unfavorable environment for making acquisitions, domestic and international, including adverse accounting or regulatory requirements and market values of candidates, and (6) unfavorable tax law changes and tax authority rulings. The risks covered here are not all inclusive and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Asia: A Growing Opportunity for ITW


Tom HansenVice Chairman

New York CityDecember 1, 2006

Tom HansenVice Chairman

New York CityDecember 1, 2006

Today’s TopicsToday’s Topics

• ITW’s Asian business profile and progress

• Corporate/Tech CenterAsia developmentand support

• Major business unit initiatives

• Q & A

• ITW’s Asian business profile and progress

• Corporate/Tech CenterAsia developmentand support

• Major business unit initiatives

• Q & A

ITW’s Asian Business ProfileITW’s Asian Business Profile


• In 2000, ITW’s Asian revenues were approximately $370 million

• Half of those revenues came from Japan and South Korea

• ITW had only 48 businesses in Asia in 2000– China and India represented less than $100 million

of revenues

• In 2000, ITW’s Asian revenues were approximately $370 million

• Half of those revenues came from Japan and South Korea

• ITW had only 48 businesses in Asia in 2000– China and India represented less than $100 million

of revenues


Today our business footprint has expanded significantly…

ITW currently has 88 business units in 9 Asian countries

Country No. of UnitsChina 29Japan 11

Singapore 10Malaysia 9

India 7South Korea 7

Taiwan 7Thailand 6

Philippines 2

Revenue growth in 2005-2006: +23%

Today our business footprint has expanded significantly…

ITW currently has 88 business units in 9 Asian countries

Country No. of UnitsChina 29Japan 11

Singapore 10Malaysia 9

India 7South Korea 7

Taiwan 7Thailand 6

Philippines 2

Revenue growth in 2005-2006: +23%

$815 million

2006 est. revenue

$815 million

2006 est. revenue

ITW Asian Business ProfileWere staying close to our Asian customers

ITW Asian Business ProfileWere staying close to our Asian customers

$815mm estimated 2006 revenue$815mm estimated 2006 revenue

9%9%

91% of what we sell in Asia is produced

in Asia

91% of what we sell in Asia is produced

in Asia

Exported to the regionExported to the region

ITW’s Asian Business ProfileITW’s Asian Growth Outlook

ITW’s Asian Business ProfileITW’s Asian Growth Outlook

• Asian base revenue growth expected to accelerate from approximately 13% (2000-2005) to more than 20% (2005-2010), and…

• At the same time current ITW units not in the region will set up business, and…

• Our acquisition activity will expand as our businesses respond to opportunities in the region

• ITW targeting $4 billion of revenues in Asia/Pacific (includes Australia/New Zealand) by 2010– This would represent more than 20% of

ITW’s total revenues

• Asian base revenue growth expected to accelerate from approximately 13% (2000-2005) to more than 20% (2005-2010), and…

• At the same time current ITW units not in the region will set up business, and…

• Our acquisition activity will expand as our businesses respond to opportunities in the region

• ITW targeting $4 billion of revenues in Asia/Pacific (includes Australia/New Zealand) by 2010– This would represent more than 20% of

ITW’s total revenues

Corporate/Tech CenterAsia Development and Support

Corporate/Tech CenterAsia Development and Support

Corporate/Tech Center – Asian SupportCorporate/Tech Center – Asian Support

• We have established an Asian support team at our tech center

• The current support activities include:– Technical support – both from the US and a greater

local presence

– Assisting Asian units to enhance their in-house technology

– Helping to improve operational excellence – best practice sharing

– Assisting Asian businesses in adopting the “ITW Toolbox” – local workshops

• We have established an Asian support team at our tech center

• The current support activities include:– Technical support – both from the US and a greater

local presence

– Assisting Asian units to enhance their in-house technology

– Helping to improve operational excellence – best practice sharing

– Assisting Asian businesses in adopting the “ITW Toolbox” – local workshops

ITW’s Major Asian Business Unit Initiatives


• ITW is building on the expertise of its business units in North America and Europe…and bringing new businesses, products and technologies to rapidly growing Asian markets

• ITW is building on the expertise of its business units in North America and Europe…and bringing new businesses, products and technologies to rapidly growing Asian markets



• Welding products

• Wilsonart & construction

• Industrial packaging

• Testing and measurement

• Automotive components and fasteners

• Electronic packaging and components

• Printing, consumer packaging and decorating

• Welding products

• Wilsonart & construction

• Industrial packaging

• Testing and measurement

• Automotive components and fasteners

• Electronic packaging and components

• Printing, consumer packaging and decorating

Welding Group – AsiaWelding Group – Asia

Welding Group – AsiaWelding Group – Asia

• Two core segments:

– Welding products

– Aircraft ground support equipment

• Two core segments:

– Welding products

– Aircraft ground support equipment

Welding Products – AsiaWelding Products – Asia

• Active selling presence (export) in the region for over 40 years

• Manufacturing presence in the region since 2000

• Current employment of 1000+ in Asia, 700 in China

• Active selling presence (export) in the region for over 40 years

• Manufacturing presence in the region since 2000

• Current employment of 1000+ in Asia, 700 in China

Welding Products – AsiaWelding Products – Asia

• Products currently produced in the region:– Welding Filler Metals (China/Taiwan)

– Welding Power Sources (China)

• Products currently produced in the region:– Welding Filler Metals (China/Taiwan)

– Welding Power Sources (China)

Welding Products/Ground Support AsiaGoing Forward

Welding Products/Ground Support AsiaGoing Forward

• Continued end-market specific penetration focus:

– Shipbuilding

– Offshore Platform Fabrication

– Energy Infrastructure

– Oil/Gas Refining/Transportation

– Construction

– Aviation/Airports

• An industry focus (rather than geography) where core customer needs and/or global competitive dynamics (i.e. weld quality, weld integrity, etc.) will drive the need for moreadvanced welding processes and technologies

• Expect base revenue CAGR of +20% in 2005-2010 timeframe

• Continued end-market specific penetration focus:

– Shipbuilding

– Offshore Platform Fabrication

– Energy Infrastructure

– Oil/Gas Refining/Transportation

– Construction

– Aviation/Airports

• An industry focus (rather than geography) where core customer needs and/or global competitive dynamics (i.e. weld quality, weld integrity, etc.) will drive the need for moreadvanced welding processes and technologies

• Expect base revenue CAGR of +20% in 2005-2010 timeframe

Aircraft Ground Support EquipmentAsia

Aircraft Ground Support EquipmentAsia

• Focus is on China– China expects to spend $17.4 billion

(US) over the next five years to build 42 new airports

– Commercial airline fleet expected to grow from 863 to 1,580 during that time

– Local presence (sales office) since 1994 and dominant share position in our core product categories positions us well going forward

• Focus is on China– China expects to spend $17.4 billion

(US) over the next five years to build 42 new airports

– Commercial airline fleet expected to grow from 863 to 1,580 during that time

– Local presence (sales office) since 1994 and dominant share position in our core product categories positions us well going forward

Wilsonart and Construction Products

Wilsonart and Construction Products

Wilsonart and Construction ProductsWilsonart and Construction Products

• We have been producing and selling in the region for many years at a relatively modest level via our construction tools and fasteners

• In 1999, the Premark acquisition gave us a strong footprint in China/Asia via the Wilsonart high pressure laminate business

• We believe the ongoing maturation of the Asian economy plays to our “productivity enhancing”strengths

• We have been producing and selling in the region for many years at a relatively modest level via our construction tools and fasteners

• In 1999, the Premark acquisition gave us a strong footprint in China/Asia via the Wilsonart high pressure laminate business

• We believe the ongoing maturation of the Asian economy plays to our “productivity enhancing”strengths


• These ITW businesses will benefit from the regions growth– Continued commercial

construction

– The building of schools, universities and hospitals

• These ITW businesses will benefit from the regions growth– Continued commercial

construction

– The building of schools, universities and hospitals

Will fuel demand for– Wilsonart Laminate

– Buildex, Ramset, Redhead Fasteners and tools

Will fuel demand for– Wilsonart Laminate

– Buildex, Ramset, Redhead Fasteners and tools


• We can supply these products from our Asian businesses:– Wilsonart Shanghai

– Buildex Shanghai

– Ramset/RedHead Hong Kong

• We can supply these products from our Asian businesses:– Wilsonart Shanghai

– Buildex Shanghai

– Ramset/RedHead Hong Kong


• We expect to grow 10% annually in 2005-2010 given our renewed focus– Developing new premium laminates for local

market needs

– Management is in the process of implementing new product/channel strategies

– Will result in greater use of ITW’s productivity enhancing products

• We expect to grow 10% annually in 2005-2010 given our renewed focus– Developing new premium laminates for local

market needs

– Management is in the process of implementing new product/channel strategies

– Will result in greater use of ITW’s productivity enhancing products

Industrial Packaging BusinessesIndustrial Packaging Businesses


• Two core segments:– Signode equipment and consumables

– Associated industrial packaging products (film, paper-based protection products)

• Two core segments:– Signode equipment and consumables

– Associated industrial packaging products (film, paper-based protection products)

Industrial Packaging BusinessesKey Products

Industrial Packaging BusinessesKey Products

Industrial Packaging BusinessesIndustrial Packaging Businesses• A well established presence in Asia:

Manufacturing Sales/Service

South Korea South Korea

China Japan

India Taiwan

Singapore

Malaysia

Philippines

• A well established presence in Asia:

Manufacturing Sales/Service

South Korea South Korea

China Japan

India Taiwan

Singapore

Malaysia

Philippines

South KoreaSouth Korea

IndiaIndia

ChinaChina


• Target Market Segments:Primary Steel Mills Food & Beverage

Aluminum Mills Beverage Containers

Synthetic Fibers Textiles

Tobacco Appliances

• We’re gaining traction and expect base revenue CAGR of +15% in 2005-2010; up from +7% in 2000-2005

• Target Market Segments:Primary Steel Mills Food & Beverage

Aluminum Mills Beverage Containers

Synthetic Fibers Textiles

Tobacco Appliances

• We’re gaining traction and expect base revenue CAGR of +15% in 2005-2010; up from +7% in 2000-2005

Testing and MeasurementTesting and Measurement


• Instron (an October 2005 acquisition) and Buehler (a September 2006 acquisition) are the basis for our growing new testing and measurement platform

• These businesses represent more than $300 million of revenues

• Focus will be on further expanding the Instronand Buehler brands into Asia where they currently do 25% of their business

• Instron (an October 2005 acquisition) and Buehler (a September 2006 acquisition) are the basis for our growing new testing and measurement platform

• These businesses represent more than $300 million of revenues

• Focus will be on further expanding the Instronand Buehler brands into Asia where they currently do 25% of their business


Textile, Plastics, RubberTextile, Plastics, Rubber

MetalsMetals

AutomotiveAutomotive

BiomedicalBiomedical


• Our instrumentation products are exported to the region and supported by a well established Sales/Service in:

South Korea

China

Thailand

Singapore

Japan

Taiwan

• Our instrumentation products are exported to the region and supported by a well established Sales/Service in:

South Korea

China

Thailand

Singapore

Japan

Taiwan


• As manufacturing continues to expand in the region, demand for Testing and Measurement equipment will grow!

• We anticipate a CAGR of 13% from 2005-2010

• Great brands and quality products are demanded – Asians want the best!

• As manufacturing continues to expand in the region, demand for Testing and Measurement equipment will grow!

• We anticipate a CAGR of 13% from 2005-2010

• Great brands and quality products are demanded – Asians want the best!

Automotive Components and Fasteners

Automotive Components and Fasteners

Automotive Components and FastenersThe Current Situation

Automotive Components and FastenersThe Current Situation

• The South Korean and Japanese markets are fairly mature

• While China, India and elsewhere are developing and lack scale for the OEM’s and Tier 1’s– China will build 5.7 million vehicles in 2006 – across 60

models and 46 automakers

– India will build 1.5 million vehicles spread among 19 automakers

• Unit volumes will need to increase so profitable scale can be achieved.

• Consolidation is inevitable!

• The South Korean and Japanese markets are fairly mature

• While China, India and elsewhere are developing and lack scale for the OEM’s and Tier 1’s– China will build 5.7 million vehicles in 2006 – across 60

models and 46 automakers

– India will build 1.5 million vehicles spread among 19 automakers

• Unit volumes will need to increase so profitable scale can be achieved.

• Consolidation is inevitable!

Automotive Components and FastenersAutomotive Components and Fasteners• 6 locations in China, India, Korea and Japan

• Currently-modest revenue base

• Leveraging existing relationships/supplier status in NA and Europe to grow in Asia

• Supporting current customer efforts in Asia from shared facilities until sufficient volume justifies dedicated facilities

• 6 locations in China, India, Korea and Japan

• Currently-modest revenue base

• Leveraging existing relationships/supplier status in NA and Europe to grow in Asia

• Supporting current customer efforts in Asia from shared facilities until sufficient volume justifies dedicated facilities

Automotive Components and FastenersAutomotive Components and FastenersCurrent products include:Current products include:

Interior ComponentsInterior Components

Window Lift ComponentsWindow Lift Components

Fuel Doors and HousingsFuel Doors and Housings

Powertrain Components

Powertrain Components

Automotive Components and FastenersAutomotive Components and FastenersCurrent products include:

– Proprietary fasteners

Current products include:

– Proprietary fasteners

Ergo Tuflok™Ergo Tuflok™Align-Rite® / PCAC®Align-Rite® / PCAC®

Airbag FastenersAirbag Fasteners

BosScrew®BosScrew®

2K Routing Clips2K Routing Clips

2K Hole Plugs2K Hole Plugs

Riblok™Riblok™2K Screw Grommet2K Screw Grommet

Sealed Pin and GrommetSealed Pin and Grommet

Wire Routing ProductsWire Routing Products

Automotive Components and FastenersNow Until 2010

Automotive Components and FastenersNow Until 2010

• Key Asian Initiatives to reach hundreds of millions in revenue by 2010:– Use our global reach to secure strategic supplier status with

GM, Ford, VW, Peugeot, Toyota, Nissan/Renault, Hyundai and others

– Plans to establish additional operations in Beijing, Shanghai and Hong Kong to support the domestic Chinese market

– Use entry level products to penetrate domestic OEM’s and Tiers. As OEM consolidation accelerates and model volumes grow and the vehicles become more sophisticated, convert to higher value added ITW solutions

– Grow through strategic acquisitions: several deals in the pipeline for 2007

• Key Asian Initiatives to reach hundreds of millions in revenue by 2010:– Use our global reach to secure strategic supplier status with

GM, Ford, VW, Peugeot, Toyota, Nissan/Renault, Hyundai and others

– Plans to establish additional operations in Beijing, Shanghai and Hong Kong to support the domestic Chinese market

– Use entry level products to penetrate domestic OEM’s and Tiers. As OEM consolidation accelerates and model volumes grow and the vehicles become more sophisticated, convert to higher value added ITW solutions

– Grow through strategic acquisitions: several deals in the pipeline for 2007

Electronic Packaging and Components




• We began manufacturing in the region over 25 years ago – current revenue in excess of $100 million

• Organic growth will be significantly enhanced given the strong acquisition pipeline

• Two areas of focus:– Expanding existing packaging businesses

– Building out newer electronic component businesses

• We began manufacturing in the region over 25 years ago – current revenue in excess of $100 million

• Organic growth will be significantly enhanced given the strong acquisition pipeline

• Two areas of focus:– Expanding existing packaging businesses

– Building out newer electronic component businesses

Electronic Packaging ProductsElectronic Packaging ProductsI.C. Shipping TubesI.C. Shipping Tubes I.C. Injection Molded TraysI.C. Injection Molded Trays

Tape And ReelTape And Reel Thermoformed TraysThermoformed Trays

Electronic Component ProductsElectronic Component Products

LCD DisplaysLCD Displays

Fastening Systems for computer componentsFastening Systems for computer components

Switches / Surge ProtectionSwitches / Surge Protection

LED DisplaysLED Displays

Static BarsStatic Bars

Electronic Packaging and Component UnitsElectronic Packaging and Component Units

10 Facilities in 6 Countries:MalaysiaPhilippinesChinaJapanTaiwanThailand

10 Facilities in 6 Countries:MalaysiaPhilippinesChinaJapanTaiwanThailand



• Planned CAGR growth of 10% for 2005-2010

• Organic growth will be significantly enhanced given a strong acquisition pipeline– We’re seeing some interesting opportunities in

electronic packaging and fastening

• Planned CAGR growth of 10% for 2005-2010

• Organic growth will be significantly enhanced given a strong acquisition pipeline– We’re seeing some interesting opportunities in

electronic packaging and fastening

Printing, Consumer Packaging and Decorating




• Initial push into Asia was with Hi-Cone selling can multi-packaging carriers into Japan and China

• Hi-Cone followed Coke, Pepsi and various beer marketers into other parts of Asia and continue to pursue this market

• Today, multi-packaging is a minor part of beverage packaging but the growth will come as convenience increases

• Initial push into Asia was with Hi-Cone selling can multi-packaging carriers into Japan and China

• Hi-Cone followed Coke, Pepsi and various beer marketers into other parts of Asia and continue to pursue this market

• Today, multi-packaging is a minor part of beverage packaging but the growth will come as convenience increases



• In 1999 we acquired the Foils and Thermal Transfer Ribbon (TTR) businesses in South Korea

• The strategic objective was to enhance our worldwide offering of foils, establish a TTR business and eventually provide a growth platform for future expansion into China

• We anticipate that future growth in these businesses will focus on China and the surrounding region

• In 1999 we acquired the Foils and Thermal Transfer Ribbon (TTR) businesses in South Korea

• The strategic objective was to enhance our worldwide offering of foils, establish a TTR business and eventually provide a growth platform for future expansion into China

• We anticipate that future growth in these businesses will focus on China and the surrounding region



• In 2004 we acquired Chris Kay, a heat transfer manufacturer for applications to garments, especially soccer jerseys and other athletic wear

• Chris Kay has an established plant in China, strategically allied with Umbro, and others like Adidas, Puma, and Nike

• In last summer’s World Cup, ITW products were represented on every player’s uniform and, more importantly, on the replica jerseys that were pervasive in the stands

• In 2004 we acquired Chris Kay, a heat transfer manufacturer for applications to garments, especially soccer jerseys and other athletic wear

• Chris Kay has an established plant in China, strategically allied with Umbro, and others like Adidas, Puma, and Nike

• In last summer’s World Cup, ITW products were represented on every player’s uniform and, more importantly, on the replica jerseys that were pervasive in the stands



• In 2006 we expanded the Chris Kay heat transfer plant to establish production of our Pro-Mark heat transfer decals for golf shafts

• This strategically aligned us with the manufacturers of graphic shafts in China and has been a good growth opportunity

• In 2006 we expanded the Chris Kay heat transfer plant to establish production of our Pro-Mark heat transfer decals for golf shafts

• This strategically aligned us with the manufacturers of graphic shafts in China and has been a good growth opportunity



• Strategic objectives remain:– Follow volume to Asia as major marketers relocate

to the region

– Growth through strategic acquisition in end markets and products with which we are familiar

• We expect base business growth to accelerate to a CAGR of 18% in 2005-2010

• Strategic objectives remain:– Follow volume to Asia as major marketers relocate

to the region

– Growth through strategic acquisition in end markets and products with which we are familiar

• We expect base business growth to accelerate to a CAGR of 18% in 2005-2010



Asia: A Growing Opportunity for ITWSummary

Asia: A Growing Opportunity for ITWSummary

• We have a long and substantial presence in the region

• The region’s growth fundamentals now favor growth of ITW’s business-to-business product offering

• And there is a corporate mandate to expand our businesses’ organic participation in Asia

• Our acquisition pipeline is increasing with Asian Centric Opportunities

The bottom line is that our growth in Asia will exceed growth elsewhere!

• We have a long and substantial presence in the region

• The region’s growth fundamentals now favor growth of ITW’s business-to-business product offering

• And there is a corporate mandate to expand our businesses’ organic participation in Asia

• Our acquisition pipeline is increasing with Asian Centric Opportunities

The bottom line is that our growth in Asia will exceed growth elsewhere!

Capital Structure and Other Financial TopicsCapital Structure and Other Financial Topics

Ron KroppNew York

December 1, 2006

Ron KroppNew York

December 1, 2006

Today’s Financial TopicsToday’s Financial Topics

• 2006 forecast

• Capital structure

• Leasing and investments

• New accounting standards

• 2006 forecast

• Capital structure

• Leasing and investments

• New accounting standards

MidLow High Point

4th QuarterBase Revenues 3.1% 5.1% 4.1%Income Per Share-Diluted $0.77 $0.81 $0.79

%F(U) 2005 8% 14% 11%

Full YearBase Revenues 4.0% 4.6% 4.3%Income Per Share-Diluted $3.01 $3.05 $3.03

%F(U) 2005 16% 17% 17%

MidLow High Point

4th QuarterBase Revenues 3.1% 5.1% 4.1%Income Per Share-Diluted $0.77 $0.81 $0.79

%F(U) 2005 8% 14% 11%

Full YearBase Revenues 4.0% 4.6% 4.3%Income Per Share-Diluted $3.01 $3.05 $3.03

%F(U) 2005 16% 17% 17%

2006 ForecastAs of October 18

2006 ForecastAs of October 18

2006 ForecastAs of October 18 Key Assumptions

2006 ForecastAs of October 18 Key Assumptions

• Exchange rates hold at current levels• Acquired revenues in the $1.1 billion to $1.4 billion range• Share repurchases of $350 million to $450 million

for the year• Restructuring cost of $25 to $30 million• No further impairment of goodwill/intangibles• Nonoperating investment income of $75 to $85 million,

which is lower than 2005 by $45 to $55 million• Tax rate of 30.5% for the 4th quarter and the full year

• Exchange rates hold at current levels• Acquired revenues in the $1.1 billion to $1.4 billion range• Share repurchases of $350 million to $450 million

for the year• Restructuring cost of $25 to $30 million• No further impairment of goodwill/intangibles• Nonoperating investment income of $75 to $85 million,

which is lower than 2005 by $45 to $55 million• Tax rate of 30.5% for the 4th quarter and the full year

Capital StructureCapital Structure

Capital StructureHistory

Capital StructureHistory

• ITW has always generated strong operating cash flow

• Operating cash flow has been used for:– Capital expenditures

– Dividends

– Acquisitions

– Investments

– Share repurchases

• Due to recession, cash build-up of almost $2 billion on balance sheet by year-end 2003

• First-ever share repurchase program completed during 2004 and 2005 – $2.8 billion spent for 31 million shares

• ITW has always generated strong operating cash flow

• Operating cash flow has been used for:– Capital expenditures

– Dividends

– Acquisitions

– Investments

– Share repurchases

• Due to recession, cash build-up of almost $2 billion on balance sheet by year-end 2003

• First-ever share repurchase program completed during 2004 and 2005 – $2.8 billion spent for 31 million shares

Capital StructureUses of Free Cash Flow

1996 - 2005

Capital StructureUses of Free Cash Flow

1996 - 2005

46%

20%

26%

8%

Acquisitions Dividends Share Repurchases Investments

46%

20%

26%

8%

Acquisitions Dividends Share Repurchases Investments

Capital StructureCash and Debt 1995-2005Capital StructureCash and Debt 1995-2005

(2,500.0)

(1,500.0)

(500.0)

500.0

1,500.0

2,500.0

3,500.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Debt Cash Debt-to-capital %

(2,500.0)

(1,500.0)

(500.0)

500.0

1,500.0

2,500.0

3,500.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Debt Cash Debt-to-capital %

Mortgage debt

deconsolidation

Mortgage debt

deconsolidation

Share

repurch

ase

Share

repurch

ase

Capital StructureCurrent Status


• Reviewed capital structure under various forecast scenarios with Board in 1st half of 2006

• Conclusions:– Free operating cash flow will continue to be strong

– Even at “normal” acquisition levels, cash would build-up on the balance sheet without share repurchase program

– If acquisitions slow, cash build-up would be greater

– Ample debt capacity available for “larger” acquisitions

– More flexible capital structure needed going forward

• Reviewed capital structure under various forecast scenarios with Board in 1st half of 2006

• Conclusions:– Free operating cash flow will continue to be strong

– Even at “normal” acquisition levels, cash would build-up on the balance sheet without share repurchase program

– If acquisitions slow, cash build-up would be greater

– Ample debt capacity available for “larger” acquisitions

– More flexible capital structure needed going forward



• Capital structure actions taken in August 2006:

– More aggressive dividend guideline• 25-35% of trailing two years net income

• Previous was 25-30% of trailing three years

– Current dividend rate increase of 27%

– Authorized new repurchase program for 35 million shares over an unspecified time period

• Capital structure actions taken in August 2006:

– More aggressive dividend guideline• 25-35% of trailing two years net income

• Previous was 25-30% of trailing three years

– Current dividend rate increase of 27%

– Authorized new repurchase program for 35 million shares over an unspecified time period

Capital StructureGoing Forward

Capital StructureGoing Forward

• Share repurchase activity will be based on free operating cash flow and acquisition levels

• Assumption for cash used for annual share repurchases will be provided as part of forecasts– $350 to $450 million for 2006

• If acquisition activity increases, repurchase activity would slow (and vice versa)

• Long-term target debt-to-capital ratio of 20-25%, absent any “large” acquisitions– Ample debt capacity would still exist for larger acquisitions

– Debt-to-capital ratio was 15% at end of 3rd quarter

• Share repurchase activity will be based on free operating cash flow and acquisition levels

• Assumption for cash used for annual share repurchases will be provided as part of forecasts– $350 to $450 million for 2006

• If acquisition activity increases, repurchase activity would slow (and vice versa)

• Long-term target debt-to-capital ratio of 20-25%, absent any “large” acquisitions– Ample debt capacity would still exist for larger acquisitions

– Debt-to-capital ratio was 15% at end of 3rd quarter

Leasing and InvestmentsLeasing and Investments

Leasing and InvestmentsHistory

Leasing and InvestmentsHistory

• ITW has always made opportunistic financial investments

• In mid-1990’s, three commercial mortgage investments were made– Use of excess cash flow at that time

– All were 10-year deals with similar structures

– Most of upside benefit and downside risk resides with partner

– Non recourse debt was shown “gross” on the balance sheet until deconsolidation in 2003 (adoption of FIN 46)

– Overall return on investment will be higher than expected

• Started reporting as a separate segment in 1996

• ITW has always made opportunistic financial investments

• In mid-1990’s, three commercial mortgage investments were made– Use of excess cash flow at that time

– All were 10-year deals with similar structures

– Most of upside benefit and downside risk resides with partner

– Non recourse debt was shown “gross” on the balance sheet until deconsolidation in 2003 (adoption of FIN 46)

– Overall return on investment will be higher than expected

• Started reporting as a separate segment in 1996

Leasing and InvestmentsCurrent Status

Leasing and InvestmentsCurrent Status

• Operating segment discontinued in 1st quarter of 2006– Utilize free operating cash flow for core manufacturing

investments rather than make additional financial investments– Commercial mortgage transactions ending in 2005, 2006 and

February 2008 (approximately 2/3 of segment’s income)– Planned run-off of other assets in portfolio (leases, venture

capital fund)

• Income statement presentation– Income presented as “nonoperating investment income”– Related interest expense now included in “interest expense”– Prior years reclassified to reflect current year presentation– Increase in estimated 2006 ITW operating income

• Without reclass of L&I = +12%• With reclass of L&I = +15%

• Ongoing income run rate of $15 to $20 million

• Operating segment discontinued in 1st quarter of 2006– Utilize free operating cash flow for core manufacturing

investments rather than make additional financial investments– Commercial mortgage transactions ending in 2005, 2006 and

February 2008 (approximately 2/3 of segment’s income)– Planned run-off of other assets in portfolio (leases, venture

capital fund)

• Income statement presentation– Income presented as “nonoperating investment income”– Related interest expense now included in “interest expense”– Prior years reclassified to reflect current year presentation– Increase in estimated 2006 ITW operating income

• Without reclass of L&I = +12%• With reclass of L&I = +15%

• Ongoing income run rate of $15 to $20 million

$0

$200

$400

$600

$800

$1,000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

E

2007

E

Inve

stm

ents

$0

$20

$40

$60

$80

$100

$120

$140

$160

Inve

stm

ent I

ncom

e

$0

$200

$400

$600

$800

$1,000

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

E

2007

E

Inve

stm

ents

$0

$20

$40

$60

$80

$100

$120

$140

$160

Inve

stm

ent I

ncom

e

Leasing and Investments1994 – 2007E

Leasing and Investments1994 – 2007E

Investments Balance (net of nonrecourse debt)Investments Balance (net of nonrecourse debt) Investment Income (net of nonrecourse interest)Investment Income (net of nonrecourse interest)

(in millions)(in millions)

New Accounting Standards

New Accounting Standards

New Accounting StandardsNew Accounting Standards

• FIN 48 – accounting for uncertainty in income taxes

• SFAS 158 – employers’ accounting for defined benefit pension and other postretirement plans

• FIN 48 – accounting for uncertainty in income taxes

• SFAS 158 – employers’ accounting for defined benefit pension and other postretirement plans

Fin 48 – Income Tax UncertaintiesFin 48 – Income Tax Uncertainties

• Effective for 1st quarter 2007

• Establishes new criteria for recognizing and measuring uncertain tax positions

• Any change to existing tax reserves as a result of adopting new rule would be an adjustment to retained earnings

• New disclosures re: tax reserves required

• Effective for 1st quarter 2007

• Establishes new criteria for recognizing and measuring uncertain tax positions

• Any change to existing tax reserves as a result of adopting new rule would be an adjustment to retained earnings

• New disclosures re: tax reserves required

SFAS 158 – Pension and Other Postretirement Benefits


• Effective for 4th quarter 2006• Phase I of FASB project on pension accounting• Requires actual “funded status” of pension and retiree health

care assets/liabilities to be recorded on the balance sheet, with the offset to equity

• Difference between “funded status” and current booked asset/liability is due to smoothing of assumption changes for expense purposes– Changes in discount rates– Changes to plan design– Actual asset returns versus return assumptions

• No change to pension or retiree health care expense versus current accounting

• Effective for 4th quarter 2006• Phase I of FASB project on pension accounting• Requires actual “funded status” of pension and retiree health

care assets/liabilities to be recorded on the balance sheet, with the offset to equity

• Difference between “funded status” and current booked asset/liability is due to smoothing of assumption changes for expense purposes– Changes in discount rates– Changes to plan design– Actual asset returns versus return assumptions

• No change to pension or retiree health care expense versus current accounting



• Example – based on ITW’s status as of 12/31/05• Example – based on ITW’s status as of 12/31/05

(358)(358)

(550)(550)

(58)(58)

(608)(608)

(2,486)(2,486)

1,8781,878

TotalTotal

(131)(131)

(201)(201)

(301)(301)

(502)(502)

(606)(606)

104104

Retiree HC

Retiree HC

(349)(349)Pretax equity adjustmentPretax equity adjustment

(227)(227)After-tax equity adjustmentAfter-tax equity adjustment

243243Amount on booksAmount on books

(106)(106)Funded statusFunded status

(1,880)(1,880)Plan liabilitiesPlan liabilities

1,7741,774Plan assetsPlan assets

PensionPension(in millions)(in millions)

Q&AQ&A

BreakBreak

ITW OverviewDavid Speer

Eugene OsterkornNew York CityDecember 1, 2006

ITW OverviewDavid Speer

Eugene OsterkornNew York CityDecember 1, 2006

Today’s TopicsToday’s Topics

• Evolving Revenue Diversification

• A Look at the Future: Growth Via Base Revenues and Acquisitions

• Review of Key ITW Businesses

• Conclusions From Today’s Meeting

• Q & A

• Evolving Revenue Diversification

• A Look at the Future: Growth Via Base Revenues and Acquisitions

• Review of Key ITW Businesses

• Conclusions From Today’s Meeting

• Q & A

Evolving Revenue DiversificationEvolving Revenue Diversification

• ITW’s revenue mix is often misunderstood…we are much more than North American housing and Big 3 automotive

• ITW’s revenue mix has changed significantly since 1997 and will continue to evolve going forward

• ITW’s end market and geographic revenue mix have become more diversified over the years

• ITW’s revenue mix is often misunderstood…we are much more than North American housing and Big 3 automotive

• ITW’s revenue mix has changed significantly since 1997 and will continue to evolve going forward

• ITW’s end market and geographic revenue mix have become more diversified over the years

Evolving Revenue Diversification: ITW Revenues by End Markets

Evolving Revenue Diversification: ITW Revenues by End Markets

22%

3%6%6%9%

10%

21%

23%

1997

Automotive OEM

General Industrial

Commercial Construction

Food & Beverage

Consumer Durables

Residential Construction

Revnovation Construction

Other

22%

3%6%6%9%

10%

21%

23%

1997

Automotive OEM

General Industrial


Food & Beverage

Consumer Durables

Residential Construction

Revnovation Construction

Other

13%

4%6%7%7%8%8%

10%

11%

11%

15%

2006 (F)

General Industrial

Automotive OEMFood Institutional/Service


Residential ConstructionRenovation Construction

MRO/MetalsConsumer Durables

Food & Beverage

Auto AftermarketOther

13%

4%6%7%7%8%8%

10%

11%

11%

15%

2006 (F)

General Industrial

Automotive OEMFood Institutional/Service


Residential ConstructionRenovation Construction

MRO/MetalsConsumer Durables

Food & Beverage

Auto AftermarketOther

Evolving Revenue Diversification: ITW Revenues by Geography

Evolving Revenue Diversification: ITW Revenues by Geography

7%

26%

67%

11%

30%

59%

21%

29%

50%

1997 2006 (F) 2010 (F)

North America

Europe

Asia/Pacific

7%

26%

67%

11%

30%

59%

21%

29%

50%

1997 2006 (F) 2010 (F)

North America

Europe

Asia/Pacific

A Look at the FutureA Look at the Future

A Look at the FutureITW Growth Goals

A Look at the FutureITW Growth Goals

• Revenue growth rate of 10% - 13% CAGR over next five years consisting of:

– Base revenue growth of 5% - 6% CAGR

– Acquired revenues of 5% - 7% CAGR

• Earnings growth rate of 13% - 15% CAGR

• After-tax ROIC range of 16% - 18%

• 1,000+ business units with 12 to 15 EVP’s and groups

• 50% of the revenues in North America and 50% of revenues from International units

• Revenue growth rate of 10% - 13% CAGR over next five years consisting of:

– Base revenue growth of 5% - 6% CAGR

– Acquired revenues of 5% - 7% CAGR

• Earnings growth rate of 13% - 15% CAGR

• After-tax ROIC range of 16% - 18%

• 1,000+ business units with 12 to 15 EVP’s and groups

• 50% of the revenues in North America and 50% of revenues from International units

A Look at the FutureBase Revenue Growth

A Look at the FutureBase Revenue Growth

• We have established a goal of increasing our base revenue growth rate over the next 5 years to 5%-6% CAGR from the historic 4% rate

• Three key factors which impact our base business growth rate: – identifying and targeting solid growth opportunities within

our current customer and end markets (new products are core to this)

– growing in new geographic markets...i.e. India, China, etc. with our existing products and technologies

– the type and size of acquisitions we complete, especially those targeted with above average growth prospects

• We have established a goal of increasing our base revenue growth rate over the next 5 years to 5%-6% CAGR from the historic 4% rate

• Three key factors which impact our base business growth rate: – identifying and targeting solid growth opportunities within

our current customer and end markets (new products are core to this)

– growing in new geographic markets...i.e. India, China, etc. with our existing products and technologies

– the type and size of acquisitions we complete, especially those targeted with above average growth prospects

A Look at the Future Growth Through Acquisitions

Eugene OsterkornVP Controller-Operations

A Look at the Future Growth Through Acquisitions

Eugene OsterkornVP Controller-Operations

• Acquisition training for key management getting more qualified people into the process

• More than 150 managers trained in the last 15 months– Managers selected for training have proven track record

– Specific training in ITW’s acquisition process conducted by ITW management with significant acquisition experience

– Average training class size 20 to 25 people

– All phases of acquisitions discussed from prospecting phase through successful integration

• Trained managers have specific targets and goals as well as dedicated time to be successful

• Acquisition training for key management getting more qualified people into the process

• More than 150 managers trained in the last 15 months– Managers selected for training have proven track record

– Specific training in ITW’s acquisition process conducted by ITW management with significant acquisition experience

– Average training class size 20 to 25 people

– All phases of acquisitions discussed from prospecting phase through successful integration

• Trained managers have specific targets and goals as well as dedicated time to be successful

A Look at the FutureGrowth Through AcquisitionsA Look at the Future

Growth Through Acquisitions

• Two types of ITW acquisitions:

– Majority of deals are generated by business units generally in our existing market spaces: typically < $100 million in revenues

– Remaining deals are generally sourced by corporate management and are diversifying in nature…new platform opportunities: typically > $100 million in revenues

• Two types of ITW acquisitions:

– Majority of deals are generated by business units generally in our existing market spaces: typically < $100 million in revenues

– Remaining deals are generally sourced by corporate management and are diversifying in nature…new platform opportunities: typically > $100 million in revenues



• Execute < $100 million acquisitions sourced by business units

• The deal criteria remains the same:– Strong products and market positions

– Well known brand names

– Retain key management at acquired companies

– Utilize management talent to implement 80/20 process

– Improve financial metrics (double operating margins in three to five year period)

• Execute < $100 million acquisitions sourced by business units

• The deal criteria remains the same:– Strong products and market positions

– Well known brand names

– Retain key management at acquired companies

– Utilize management talent to implement 80/20 process

– Improve financial metrics (double operating margins in three to five year period)



• You find it…you buy it…you own it…you run it!– Substantial corporate support from individuals who

have been a part of many acquisitions

– Due diligence process covers all important aspects:• Internal audit• Financial reporting• Tax planning/compliance• Legal• Human resources• Environmental• Patent

• You find it…you buy it…you own it…you run it!– Substantial corporate support from individuals who

have been a part of many acquisitions

– Due diligence process covers all important aspects:• Internal audit• Financial reporting• Tax planning/compliance• Legal• Human resources• Environmental• Patent





Switches, Sensors, & ControlsSwitches, Sensors, & Controls

• Completed in November 2006, Ark-Les provides design and manufacturing of customized electromechanical and electronic switching solutions for the appliance OEM markets

• $90 million in revenue with more than 75% of manufacturing in Mexico and China

• Complements existing Global Appliance group businesses while providing immediate manufacturing capabilities in China

• Completed in November 2006, Ark-Les provides design and manufacturing of customized electromechanical and electronic switching solutions for the appliance OEM markets

• $90 million in revenue with more than 75% of manufacturing in Mexico and China

• Complements existing Global Appliance group businesses while providing immediate manufacturing capabilities in China



• Completed in September 2006, Buehler is a supplier of materials preparation and analysis instruments as well as associated software related to materials hardness and microstructure testing

• With 2006 estimated revenues of $60 million, Buehler supports growth of the test and measurement platform initiated in October 2005 with the acquisition of Instron

• More than 50% of revenues outside the US, with 40% emanating from Europe

• Completed in September 2006, Buehler is a supplier of materials preparation and analysis instruments as well as associated software related to materials hardness and microstructure testing

• With 2006 estimated revenues of $60 million, Buehler supports growth of the test and measurement platform initiated in October 2005 with the acquisition of Instron

• More than 50% of revenues outside the US, with 40% emanating from Europe

• Use additional resources to tap into > $100 million acquisition opportunities– Devote more Senior Management time to

working this space

– Focus on identifying new potential growth platforms

– $100 million to $500 million is sweet spot of bigger deals

– Completed five $100+ million deals since December 2004

– Not adverse to doing $500+ million acquisitions if product/market fit is good and valuation is reasonable

• Use additional resources to tap into > $100 million acquisition opportunities– Devote more Senior Management time to

working this space

– Focus on identifying new potential growth platforms

– $100 million to $500 million is sweet spot of bigger deals

– Completed five $100+ million deals since December 2004

– Not adverse to doing $500+ million acquisitions if product/market fit is good and valuation is reasonable





• Completed in July 2006, Kester, Inc. provides high performance solder and related materials for electronics and microelectronics assembly suppliers

• With 2006 estimated revenues of $175 million, potential platform opportunity for ITW

• More than 40% of revenues emanate from Asia; remainder from North America, Europe and South America

• Completed in July 2006, Kester, Inc. provides high performance solder and related materials for electronics and microelectronics assembly suppliers

• With 2006 estimated revenues of $175 million, potential platform opportunity for ITW

• More than 40% of revenues emanate from Asia; remainder from North America, Europe and South America



• To be completed in December 2006, Speedline Technologies is a leading global producer of manufacturing equipment, software and related services used in surface mount technology assembly of printed circuit boards

• $175 million in revenues with 65% of revenues in Asia; remainder in North America

• Complements our previously acquired Kester business…platform now totals $350 million of revenues

• To be completed in December 2006, Speedline Technologies is a leading global producer of manufacturing equipment, software and related services used in surface mount technology assembly of printed circuit boards

• $175 million in revenues with 65% of revenues in Asia; remainder in North America

• Complements our previously acquired Kester business…platform now totals $350 million of revenues

• Overview of 2006 acquisitions: – Of 46 acquisitions completed year-to-date,

39 deals were generated by business units

– On average, ITW has paid approximately 1.1X revenues for deals

– 24 of transactions U.S. based; 22 deals international

– Acquisitions complement existing business units and several potential new growth platforms

• Overview of 2006 acquisitions: – Of 46 acquisitions completed year-to-date,

39 deals were generated by business units

– On average, ITW has paid approximately 1.1X revenues for deals

– 24 of transactions U.S. based; 22 deals international

– Acquisitions complement existing business units and several potential new growth platforms



A Look at the FutureGrowth Through Acquisitions

Acquisition Revenue by Geography

A Look at the FutureGrowth Through Acquisitions

Acquisition Revenue by Geography

20%

26%

54%

2006 (Year To Date)

North America

Europe

Asia/Pacific20%

26%

54%

2006 (Year To Date)

North America

Europe

Asia/Pacific

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (YTD)

No. of Deals 28 36 32 45 29 21 28 24 22 46

AcquiredRevenues $420 $818 $3800 $1000 $556 $195 $347 $624 $584 $1409

Avg Size Acq. $15 $23 $119 $22 $19 $9 $12 $26 $27 $31

# Business Units 368 412 488 592 614 603 622 650 700 700+

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (YTD)

No. of Deals 28 36 32 45 29 21 28 24 22 46

AcquiredRevenues $420 $818 $3800 $1000 $556 $195 $347 $624 $584 $1409

Avg Size Acq. $15 $23 $119 $22 $19 $9 $12 $26 $27 $31

# Business Units 368 412 488 592 614 603 622 650 700 700+

($ in millions)($ in millions)

Summary: 311 acquisitions $9.8 billion acquired revenues

Average acquisition size $31 million ($21 million ex. Premark)

Summary: 311 acquisitions $9.8 billion acquired revenues

Average acquisition size $31 million ($21 million ex. Premark)

A Look at Future GrowthGrowth Through Acquisitions

A Look at Future GrowthGrowth Through Acquisitions

Base Revenues and Acquisitions:Key Ingredients to Our Strong Track Record

ITW 25-year Revenue/Income

Base Revenues and Acquisitions:Key Ingredients to Our Strong Track Record

ITW 25-year Revenue/Income

$0

$3,000

$6,000

$9,000

$12,000

$15,000

1982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006 (F)

$0

$500

$1,000

$1,500

$2,000

$2,500

$0

$3,000

$6,000

$9,000

$12,000

$15,000

1982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006 (F)

$0

$500

$1,000

$1,500

$2,000

$2,500

CAGRRevenue ----------------------- 15%EPS ----------------------------- 14%ROIC ---------------------------- 15%

Shareholder Return = 19%

CAGRRevenue ----------------------- 15%EPS ----------------------------- 14%ROIC ---------------------------- 15%

Shareholder Return = 19%

RevenuesRevenues

Op. IncomeOp. Income

Review of Key ITW Businesses

Review of Key ITW Businesses

ITW Construction ProductsITW Construction Products

14%14%

Percent of total ITW revenues

Percent of total ITW revenues

Engineered ProductsEngineered Products

ITW Construction ProductsITW Construction Products

• Designer and manufacturer of construction fastening systems for commercial, new housing and remodeling/rehab sectors

• 77 autonomous businesses in 23 countries represent $2.0 billion of revenues

• 2005 revenues: +7%

• 2006 YTD revenues: +12%

• Designer and manufacturer of construction fastening systems for commercial, new housing and remodeling/rehab sectors

• 77 autonomous businesses in 23 countries represent $2.0 billion of revenues



ITW Construction ProductsWorldwide Revenues 2006 (F)

ITW Construction ProductsWorldwide Revenues 2006 (F)

30%

30%

40%

By End Markets

Residential

Renovation

Commercial30%

30%

40%

By End Markets

Residential

Renovation

Commercial 48%

52%

By Geography

International

North America48%

52%

By Geography

International

North America

ITW Construction ProductsNew Product Development

ITW Construction ProductsNew Product Development

• ITW SPIT (France) launched the SPIT 328, an innovative battery-powered hammer/drill tool

• Serves electricians, plumbers, carpenters, ironworkers and drywall installers

• Generated approximately $10 million of sales in 2006

• ITW SPIT (France) launched the SPIT 328, an innovative battery-powered hammer/drill tool

• Serves electricians, plumbers, carpenters, ironworkers and drywall installers

• Generated approximately $10 million of sales in 2006

ITW Construction Products 2006 Fourth Quarter Trends

ITW Construction Products 2006 Fourth Quarter Trends

• North American new housing starts expected to decline 25% - 30% in Q4; Dodge construction data showed new housing starts down 29% in October

• Renovation spending expected to be flat to slightly down in Q4

• Commercial construction activity to be up 3% - 5% in Q4

• We face a big headwind from new housing sector this quarter!

• North American new housing starts expected to decline 25% - 30% in Q4; Dodge construction data showed new housing starts down 29% in October

• Renovation spending expected to be flat to slightly down in Q4

• Commercial construction activity to be up 3% - 5% in Q4

• We face a big headwind from new housing sector this quarter!

ITW Construction Products 2007 Growth Assumptions

ITW Construction Products 2007 Growth Assumptions

• Worldwide base revenues expected to grow 2% - 3% in 2007

• North America– Residential: new housing starts projected to decline

7% - 9% in 2007, with better performance in second half of the year

– Renovation: HIRI projects renovation activity to decline 1% - 2% in 2007; longer-term renovation outlook through 2011 expected to grow at a rate of nearly 5%

– Commercial construction: square footage projected to grow 2% in 2007, with retail and healthcare building expected to decline 7% - 8% in the year


• North America– Residential: new housing starts projected to decline

7% - 9% in 2007, with better performance in second half of the year

– Renovation: HIRI projects renovation activity to decline 1% - 2% in 2007; longer-term renovation outlook through 2011 expected to grow at a rate of nearly 5%

– Commercial construction: square footage projected to grow 2% in 2007, with retail and healthcare building expected to decline 7% - 8% in the year

ITW Construction Products 2007 Growth Assumptions (cont.)

ITW Construction Products 2007 Growth Assumptions (cont.)

International

• Europe– European commercial construction activity projected to

grow 3% in 2007

– European residential construction activity forecasted increase 1% in 2007

– European renovation activity expected to grow 2% in 2007

• Asia/Pacific– Australia and New Zealand housing starts forecasted to

decline 3% in 2007

– Australia and New Zealand commercial construction activity (square meters) forecasted to grow 6% in 2007

– Australia and New Zealand renovation activity ($’s) expected to grow 4% in 2007

– Southeast Asia construction activity: +3%

– China: +6% to +7%

International

• Europe– European commercial construction activity projected to

grow 3% in 2007

– European residential construction activity forecasted increase 1% in 2007

– European renovation activity expected to grow 2% in 2007

• Asia/Pacific– Australia and New Zealand housing starts forecasted to

decline 3% in 2007

– Australia and New Zealand commercial construction activity (square meters) forecasted to grow 6% in 2007

– Australia and New Zealand renovation activity ($’s) expected to grow 4% in 2007

– Southeast Asia construction activity: +3%

– China: +6% to +7%

Wilsonart InternationalWilsonart International

7%7%

Percent of total ITW revenuesPercent of total ITW revenues

Engineered ProductsEngineered Products

• A worldwide manufacturer and distributor of decorative surfaces for commercial, new housing and remodeling sectors

• 12 businesses in 8 countries represent $1.0 billion of revenues

• 2005 revenues: flat


• A worldwide manufacturer and distributor of decorative surfaces for commercial, new housing and remodeling sectors


• 2005 revenues: flat


Wilsonart InternationalWorldwide Revenues 2006 (F)Wilsonart InternationalWorldwide Revenues 2006 (F)

15%

29%

56%

By End Markets

Commercial

Renovation

Residential15%

29%

56%

By End Markets

Commercial

Renovation

Residential 24%

76%

By Geography

North America

International

24%

76%

By Geography

North America

International

Wilsonart InternationalNew Product Development

Wilsonart InternationalNew Product Development

• Wilsonart continued the successful rollout of it’s high definition product line with Bella HD laminate

• This product line extension (now has 16 designs available) simulates granite…but at a lower price than natural granite and a higher price than traditional laminate

• High definition laminate in total expected to contribute more than $20 million to Wilsonart’s 2006 revenues

• Wilsonart continued the successful rollout of it’s high definition product line with Bella HD laminate

• This product line extension (now has 16 designs available) simulates granite…but at a lower price than natural granite and a higher price than traditional laminate

• High definition laminate in total expected to contribute more than $20 million to Wilsonart’s 2006 revenues

Wilsonart International2007 Growth Assumptions

Wilsonart International2007 Growth Assumptions

• Worldwide base revenues expected to grow2% - 4% in 2007

• Commercial construction activity supports growth in Wilsonart North America in 2007 notably in the office and retail sectors

• International growth driven by commercial and institutional demand for specialty high-pressure laminate products both in Asia and Europe

• International acquisitions in late 2006 (Polyreyacquisition finalized today) and 2007 add to longer-term base revenue growth

• Worldwide base revenues expected to grow2% - 4% in 2007

• Commercial construction activity supports growth in Wilsonart North America in 2007 notably in the office and retail sectors

• International growth driven by commercial and institutional demand for specialty high-pressure laminate products both in Asia and Europe

• International acquisitions in late 2006 (Polyreyacquisition finalized today) and 2007 add to longer-term base revenue growth

Industrial PackagingIndustrial Packaging

16%16%Percent of total ITW revenuesPercent of total ITW revenues

Specialty SystemsSpecialty Systems

• Worldwide manufacturer of plastic and steel strapping and associated equipment; stretch films; corner board; and specialty machines for a wide range of industrial packaging applications




• Worldwide manufacturer of plastic and steel strapping and associated equipment; stretch films; corner board; and specialty machines for a wide range of industrial packaging applications




Industrial PackagingIndustrial Packaging

Industrial PackagingWorldwide Revenues 2006 (F)Industrial Packaging

Worldwide Revenues 2006 (F)

4%8%

10%

13%

18%

20%

27%

By End Markets

Metals

General Industrial

Building Materials

Food/Beverage

Corrugated/Paper

Retail/Wholesale

Other

4%8%

10%

13%

18%

20%

27%

By End Markets

Metals

General Industrial

Building Materials

Food/Beverage

Corrugated/Paper

Retail/Wholesale

Other48%

52%

By Geography

North America

International48%

52%

By Geography

North America

International

Industrial PackagingNew Product DevelopmentIndustrial PackagingNew Product Development

• Signode’s HBX strapping machine features high-speed applications for end markets such as meat/poultry, pharmaceutical and doors/windows

• HBX’s advantages include unmatched simplicity (40% fewer parts) and patented “jamless” technologies

• Estimating revenues of $6 million in 2007

• Signode’s HBX strapping machine features high-speed applications for end markets such as meat/poultry, pharmaceutical and doors/windows

• HBX’s advantages include unmatched simplicity (40% fewer parts) and patented “jamless” technologies

• Estimating revenues of $6 million in 2007

Signode HBX Strapping MachineSignode HBX Strapping Machine

Industrial Packaging2006 Fourth Quarter TrendsIndustrial Packaging2006 Fourth Quarter Trends

• Signode North America facing difficult housing and other end markets

– Steel Production -14% last 3 months

– Lumber: -17% in October

– Brick and block: -18% in October

– Beverage shipments: - 4% last 2 months

• Expecting continued weakness in residential categories and moderating growth in North American industrial production in Q4

• European weakness in metals categories as consolidation impacts results

• Signode North America facing difficult housing and other end markets

– Steel Production -14% last 3 months

– Lumber: -17% in October

– Brick and block: -18% in October

– Beverage shipments: - 4% last 2 months

• Expecting continued weakness in residential categories and moderating growth in North American industrial production in Q4

• European weakness in metals categories as consolidation impacts results

Industrial Packaging2007 Growth Assumptions

Industrial Packaging2007 Growth Assumptions


– Weakness persists in North America as residential construction and other industrial end markets struggle…modest second half recovery

– Expect stronger performance in international end markets: Europe and Asia drive base revenue growth


– Weakness persists in North America as residential construction and other industrial end markets struggle…modest second half recovery

– Expect stronger performance in international end markets: Europe and Asia drive base revenue growth

Welding Products BusinessesWelding Products Businesses

14%14%Percent of total ITW revenuesPercent of total ITW revenues


Welding Products BusinessesWelding Products Businesses

• Designer and manufacturer of arc welding equipment, consumables, and accessories for a wide array of industrial and commercial applications

• 47 businesses in 15 different countries represent $1.7 billion of revenues

• 2005 revenues: +18%• 2006 YTD revenues: +25%

• Designer and manufacturer of arc welding equipment, consumables, and accessories for a wide array of industrial and commercial applications

• 47 businesses in 15 different countries represent $1.7 billion of revenues

• 2005 revenues: +18%• 2006 YTD revenues: +25%

TIEN TAI

Welding Products BusinessesWorldwide Revenues 2006 (F)

Welding Products BusinessesWorldwide Revenues 2006 (F)

19%

6%6%7%

11%

11%

12%

28%

By End Markets

Manufacturing

Energy

MRO

Fabrication

Ground Power

Construction

Shipbuilding

Other

19%

6%6%7%

11%

11%

12%

28%

By End Markets

Manufacturing

Energy

MRO

Fabrication

Ground Power

Construction

Shipbuilding

Other

23%

77%

By Geography

North America

International

23%

77%

By Geography

North America

International

Welding Products Businesses New Product Development

Welding Products Businesses New Product Development

• Miller Spectrum 375 X-Treme plasma cutter launched midyear 2006

• Highly portable system serves maintenance, light construction and HVAC markets

• Generated $5 million of revenues thus far in 2006

• Miller Spectrum 375 X-Treme plasma cutter launched midyear 2006

• Highly portable system serves maintenance, light construction and HVAC markets

• Generated $5 million of revenues thus far in 2006

Welding Products Businesses2006 Fourth Quarter Trends

Welding Products Businesses2006 Fourth Quarter Trends

• Demand for welding equipment and consumables remains fairly strong in all major regions, but year-on-year percentage growth in North America is moderating

• We expect base revenues to grow 12% to 15% for Q4

• Overall, still strong welding growth but down from 20%+ base revenue performance in 2005 and the first half of 2006

• Demand for welding equipment and consumables remains fairly strong in all major regions, but year-on-year percentage growth in North America is moderating

• We expect base revenues to grow 12% to 15% for Q4

• Overall, still strong welding growth but down from 20%+ base revenue performance in 2005 and the first half of 2006

Welding Products Businesses2007 Growth Assumptions

Welding Products Businesses2007 Growth Assumptions


• Continued strong underlying demand growth and penetration gains in Asia

– Energy related infrastructure

– Shipbuilding

– Significant additional consumable capacity comes on line

• Moderate to good overall demand in North America

– But we expect slowing rate of growth in manufacturing CAPEX spending


• Continued strong underlying demand growth and penetration gains in Asia

– Energy related infrastructure

– Shipbuilding

– Significant additional consumable capacity comes on line

• Moderate to good overall demand in North America

– But we expect slowing rate of growth in manufacturing CAPEX spending

Food EquipmentFood Equipment

11%11%Percent of total

ITW revenuesPercent of total

ITW revenues


Food Equipment Food Equipment

• Designer and manufacturer of commercial food equipment for food service and food retail customers




• Designer and manufacturer of commercial food equipment for food service and food retail customers




Food EquipmentWorldwide Revenues 2006 (F)

Food EquipmentWorldwide Revenues 2006 (F)

15%

32%

53%

By End Markets

FoodInstitutional/Restaurant

Service

Food Retail15%

32%

53%

By End Markets

FoodInstitutional/Restaurant

Service

Food Retail 33%

67%

By Geography

North America

International

33%

67%

By Geography

North America

International

Food EquipmentNew Product Development

Food EquipmentNew Product Development

• Vulcan’s newly-introduced Power Steam system is the result of extensive input from chefs, school food directors and restaurant owners targeting faster cooking times, enhanced safety characteristics and simplicity of use

• Today, Vulcan’s new generation of steam cookers are being used by restaurants, schools, hospitals, military commissaries and hotels

• The new system provides enhanced productivity with up to 20% faster cooking cycles

• Vulcan’s newly-introduced Power Steam system is the result of extensive input from chefs, school food directors and restaurant owners targeting faster cooking times, enhanced safety characteristics and simplicity of use

• Today, Vulcan’s new generation of steam cookers are being used by restaurants, schools, hospitals, military commissaries and hotels

• The new system provides enhanced productivity with up to 20% faster cooking cycles

Food Equipment2006 Fourth Quarter Trends

Food Equipment2006 Fourth Quarter Trends

• Base revenues expected to grow 5% in North America and remain flat internationally

• North American growth driven by institutional/restaurant category and increased service demand

• International comparison contains approximately 3% of discontinued products and business

• Price increases in the quarter could pull forward some sales from the 2007 first quarter

• Base revenues expected to grow 5% in North America and remain flat internationally

• North American growth driven by institutional/restaurant category and increased service demand

• International comparison contains approximately 3% of discontinued products and business

• Price increases in the quarter could pull forward some sales from the 2007 first quarter

Food Equipment2007 Growth Assumptions

Food Equipment2007 Growth Assumptions


• North American growth expected to come from institutions (healthcare, K-12 school food service, colleges and universities, and hotels/casinos)

• Focusing on acquisition opportunities particularly in Europe

• Growth in Asia fueled by continued penetration of China market and new product introductions


• North American growth expected to come from institutions (healthcare, K-12 school food service, colleges and universities, and hotels/casinos)

• Focusing on acquisition opportunities particularly in Europe

• Growth in Asia fueled by continued penetration of China market and new product introductions

ITW Global AutomotiveITW Global Automotive

11%11%Percent of total

ITW revenuesPercent of total

ITW revenues

Engineered Products SegmentEngineered Products Segment

ITW Global AutomotiveITW Global Automotive

• Designer and manufacturer of metal and plastic fasteners and components for the automotive industry

• 60 businesses in 17 countries represents $1.5 billion of revenues


• 2006 YTD revenues: flat

• Designer and manufacturer of metal and plastic fasteners and components for the automotive industry

• 60 businesses in 17 countries represents $1.5 billion of revenues


• 2006 YTD revenues: flat

ITW Global AutomotiveWorldwide Revenues 2006 (F)ITW Global AutomotiveWorldwide Revenues 2006 (F)

16%

28%

56%

By End Markets

Tiers

International& N.A. NewDomesticsOEMs

Big 3

16%

28%

56%

By End Markets

Tiers

International& N.A. NewDomesticsOEMs

Big 345%

55%

By Geography

North America

International45%

55%

By Geography

North America

International

ITW Global AutomotiveNew Product Development

ITW Global AutomotiveNew Product Development

Interior Assist Grip AssembliesInterior Assist Grip Assemblies

In-Mold Decorated Door Handle AssemblyIn-Mold Decorated Door Handle Assembly

• Deltar-IPAC penetration with new domestics continue to grow in 2006

• New products featured on the Toyota Tundra truck include interior door handles, assist grips and fuel door assemblies

• Added nearly $25 more per vehicle in the 2007 Tundra versus the 2006 model

• Deltar-IPAC penetration with new domestics continue to grow in 2006

• New products featured on the Toyota Tundra truck include interior door handles, assist grips and fuel door assemblies

• Added nearly $25 more per vehicle in the 2007 Tundra versus the 2006 model

Fuel Door & Housing AssemblyFuel Door & Housing Assembly

ITW Global Automotive2006 Fourth Quarter Trends

ITW Global Automotive2006 Fourth Quarter Trends

• North American auto builds defined by Big 3 production declines– Production expected to fall 13% in Q4 after similar

decline in Q3

• New domestics projected to increase their production 3% in Q4

• International auto builds to be down 2% - 4% due to European OEM’s: Renault, Peugeot and GM Group

• North American auto builds defined by Big 3 production declines– Production expected to fall 13% in Q4 after similar

decline in Q3

• New domestics projected to increase their production 3% in Q4

• International auto builds to be down 2% - 4% due to European OEM’s: Renault, Peugeot and GM Group

ITW Global Automotive2007 Growth Assumptions

ITW Global Automotive2007 Growth Assumptions


• North America

– Big 3 builds expected to decline 2% - 3% in 2007

– New domestics production expected to grow 7% - 9% in 2007

• International

– International OEM builds: flat to +2% in 2007


• North America

– Big 3 builds expected to decline 2% - 3% in 2007

– New domestics production expected to grow 7% - 9% in 2007

• International

– International OEM builds: flat to +2% in 2007

Conclusions From Today’s Meeting




• Our growth in Asia is expanding and consistent with how we build a footprint in this rapid growth area of the world

• ITW’s capital structure is more flexible and dynamic than in the past

• ITW’s portfolio of revenues are more diversified today by end market and geography than in the past

• Driving higher base revenue growth and accelerating acquisition activity continue to be a strategic focus

• Our growth in Asia is expanding and consistent with how we build a footprint in this rapid growth area of the world

• ITW’s capital structure is more flexible and dynamic than in the past

• ITW’s portfolio of revenues are more diversified today by end market and geography than in the past

• Driving higher base revenue growth and accelerating acquisition activity continue to be a strategic focus

Q & AQ & A





ITWCombinedVer2

Economy & Finance

business conditions

business units

business footprint

itw asia

itws asian revenues

forwardlooking statements

looking statements itw

revenues of revenues