Name: Illinois Tool Works Inc. (NYSE:ITW) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Download chart

Illinois Tool Works Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Operating revenue	14,455)	12,574)	14,109)	14,768)	14,314)
Cost of revenue	(8,489)	(7,375)	(8,187)	(8,604)	(8,309)
Gross profit	5,966)	5,199)	5,922)	6,164)	6,005)
Selling, administrative, and research and development expenses	(2,356)	(2,163)	(2,361)	(2,391)	(2,400)
Legal settlement income	—)	—)	—)	—)	95)
Amortization and impairment of intangible assets	(133)	(154)	(159)	(189)	(206)
Operating income	3,477)	2,882)	3,402)	3,584)	3,494)
Interest expense	(202)	(206)	(221)	(257)	(260)
Interest income	12)	17)	29)	35)	45)
Other net periodic benefit income	23)	13)	24)	20)	—)
Income from investments	29)	8)	15)	9)	16)
Gain (loss) on disposal of operations and affiliates	—)	—)	44)	(2)	1)
Loss on foreign currency transactions, net	(9)	(5)	(10)	(1)	(25)
Other, net	(4)	(5)	5)	6)	(1)
Other income (expense)	51)	28)	107)	67)	36)
Income before taxes	3,326)	2,704)	3,288)	3,394)	3,270)
Income taxes	(632)	(595)	(767)	(831)	(1,583)
Net income	2,694)	2,109)	2,521)	2,563)	1,687)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The financial performance between 2017 and 2021 is characterized by stability in core operational margins despite a significant volatility event in 2020. Operating revenue peaked in 2018 at 14,768 million US dollars before experiencing a contraction to 12,574 million US dollars in 2020, followed by a strong recovery to 14,455 million US dollars by the end of 2021.

Revenue and Gross Profitability: Gross profit margins remained remarkably consistent over the five-year period, fluctuating narrowly between 41.3% and 41.9%. This suggests a strong ability to maintain pricing power and manage the cost of revenue in proportion to sales volume, even during the revenue decline observed in 2020.
Operating Efficiency: Operating income followed the trajectory of revenue, with a dip to 2,882 million US dollars in 2020. However, the operating margin remained resilient, staying near 24% for most of the period. A gradual reduction in amortization and impairment of intangible assets—from 206 million US dollars in 2017 to 133 million US dollars in 2021—contributed positively to the operating result.
Expense Management: Selling, administrative, and research and development expenses were tightly controlled, ranging from 2,163 million US dollars to 2,400 million US dollars. The reduction of these expenses in 2020 coincided with the drop in revenue, indicating an effective alignment of fixed and variable costs with business activity.
Taxation and Net Income: A significant divergence is observed between operating income and net income trends due to shifts in taxation. In 2017, the effective tax rate was approximately 48.4%, resulting in a net income of 1,687 million US dollars. From 2018 onward, the tax burden decreased substantially, falling to approximately 19.0% by 2021. This reduction in the effective tax rate is the primary driver for the increase in net income, which grew to 2,694 million US dollars by 2021 despite operating income remaining relatively flat compared to 2017 levels.
Non-Operating Items: Interest expenses showed a steady decline from 260 million US dollars in 2017 to 202 million US dollars in 2021. Other income and expenses remained immaterial relative to total operating results, though a legal settlement income of 95 million US dollars provided a one-time boost to the 2017 results.

AI Ask an analyst for more

My previous chats

Add tokens

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?