================================================================================
UNITED STATES 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, 1995
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 ____________
(MARK ONE)
[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, 1996
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)

Delaware 36-1258310
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

3600 W. Lake Avenue, Glenview, Illinois
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 (Zip Code)
Offices)
(Zip Code)

Registrant's telephone number, including area code: (847) 724-7500

Securities registered pursuant to Section 12(b) of the Act:

Name of Each Exchange on
Title of Each Class Which Registered
------------------- ------------------------
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------

Common Stock New York Stock Exchange
Chicago Stock Exchange

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 5, 1996,11, 1997, was approximately $6,000,000,000.$8,000,000,000.

Shares of Common Stock outstanding at March 5,11, 1997 -- 124,531,549.
---------------
DOCUMENTS INCORPORATED BY REFERENCE

1996 - 122,395,312.

-------------------

Documents Incorporated by Reference

1995 Annual Report to Stockholders...............................Parts I, II, IV
Proxy Statement dated April 1, 1996,March 25, 1997, for Annual Meeting
of Stockholders to be held on May 3, 1996.................................Part9, 1997.............................Part III
1================================================================================
2

PART I

ITEM 1. BUSINESS

General-
- -------GENERAL

Illinois Tool Works Inc. (the "Company") was founded in 1912 and
incorporated in 1915. 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 300365 operations in 34
countries. The Company's business units are divided into twothree segments:
Engineered Components, and Industrial Systems and Consumables.Consumables, and Leasing and
Investments. Products in the Company's Engineered Components segment include
short lead-time plastic and metal components, fasteners and assemblies;
industrial fluids and adhesives; fastening toolstools; and welding products.
Industrial Systems and Consumables' products include longer lead-time systems
and related consumables for consumer and industrial packaging; marking, labeling
and identification systems; industrial spray coating equipment and systems; and
quality assurance equipment and systems. Leasing and Investments' activities
consist of making opportunistic investments that optimally utilize the Company's
cash flow and provide high returns.

In the first quarter of 1993, the Company acquired the Miller Group
Ltd.("Miller"), a manufacturer of arc welding equipment, through an exchange of
ITW voting Common Stock for all of the voting Common Stock of Miller. In early
1996, the Company acquired all of the voting stock of Hobart Brothers Company
("Hobart"), a manufacturer of welding products, in exchange for shares of ITW
voting common stock. As a result, the acquisition
hasMiller and Hobart acquisitions have been
accounted for as a poolingpoolings of interests in conformity with Generally Accepted
Accounting Principles, specifically paragraphs 46 through 48 of Accounting
Principles Board Opinion ("APB") No. 16. Accordingly,The impact of Miller and Hobart on
consolidated operating revenues, net income and net income per share was not
significant. Therefore, the 1992 and 1995 financial statements have not been
restated to reflect the acquisitions of Miller and Hobart, respectively. The
results of operations for Miller and Hobart have been included in the Statement
of Income as of the beginning of 1993.1993 and 1996, respectively.

In late 1996, the Company acquired all of the outstanding common stock of
Azon Limited ("Azon"), an Australian manufacturer of strapping and other
industrial products. The impactacquisition has been accounted for as a purchase, and
accordingly, the acquired net assets have been recorded at their estimated fair
values at the date of Milleracquisition. The results of operations have been included
in the Statement of Income from the acquisition date, except for the Azon
businesses which are expected to be sold, which have not been consolidated.
Based on consolidatedthe assumption that the Azon acquisition had occurred on January 1,
1996 or January 1, 1995, the Company's pro forma operating revenues, net income
and net income per share for 1993 and 1992 waswould not significant. Therefore, the 1992
financial statements have not been restated to reflect the acquisition of
Miller.

In early 1996, the Company acquired all of the common stock of Hobart Brothers
Company ("Hobart") in exchange for shares of ITW voting common stock. The
acquisition will be accounted for as a pooling of interests in accordance with
APB No. 16. For the two months ended February 29, 1996, combined operating
revenues for the Company and Hobart were $731,843,000 and combined net income
was $60,511,000.significantly different.

During the five-year period ending December 31, 1995,1996, the Company acquired
and disposed of numerous other operations none of which individually had a materialdid not materially impact on
consolidated results.

Current Year Developments-
- -------------------------CURRENT YEAR DEVELOPMENTS

Refer to pages 20 through 22,23, Management's Discussion and Analysis, in the
Company's 19951996 Annual Report to Stockholders.
Financial Information about Industry Segments-
- --------------------------------------------- 3

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The percentage contributions to operating revenues for the last three years
by industry segment are as follows:

Industrial
Engineered Systems and
Components ConsumablesINDUSTRIAL
ENGINEERED SYSTEMS AND LEASING AND
COMPONENTS CONSUMABLES INVESTMENTS
---------- ----------- -----------
1995 51%
1996................................................ 55% 44% 1%
1995................................................ 50% 49% 19941%
1994................................................ 53% 47% 1993 52% 48%--

Segment and geographic data are included on pages 20 21through 22 and 2638 of
the Company's 19951996 Annual Report to Stockholders.

The principal markets served by the Company's two manufacturing segments
are as follows:

% of Operating Revenues
--------------------------------------
Industrial
Engineered Systems and
Components ConsumablesOF OPERATING REVENUES
------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES
---------- ----------- ------------

Construction 36%Construction................................................ 30% 7%
AutomotiveAutomotive.................................................. 29% 9%
General Industrial 16% 28%Industrial.......................................... 18% 27%
Food and BeverageBeverage........................................... 1% 21%
Industrial Capital Goods 2% 10%Goods.................................... 4% 11%
Consumer Durables 6%Durables........................................... 7% 4%
Paper ProductsProducts.............................................. -- 9%
Electronics 6% 3%
OtherElectronics................................................. 7% 2%
Other....................................................... 4% 9%10%
--- ---
100% 100%
=== ===

Operating results of the segments are described on pages 20 21through 22 and
2638 of the Company's 19951996 Annual Report to Stockholders.

Backlog-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 backlogBacklog by industrymanufacturing segment as of December 31, 1996 and 1995 and 1994:is
summarized as follows:

Backlog in
Thousands of Dollars
-------------------------------------------------
Industrial
Engineered Systems and
Components Consumables TotalBACKLOG IN
THOUSANDS OF DOLLARS
-----------------------------------
INDUSTRIAL
ENGINEERED SYSTEMS AND
COMPONENTS CONSUMABLES TOTAL
---------- ----------- --------

19951996.................................................. $272,000 $187,000 $459,000
1995.................................................. $236,000 $213,000 $449,000
1994 $199,000 $156,000 $355,000

Backlog orders scheduled for shipment beyond calendar year 19961997 were not
material in either industry segment as of December 31, 1995.1996.

The following information is equally applicable to bothall industry segments of
the businessCompany unless otherwise noted:

Competition-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

2
4

compete with a few other companies or with many firms,others, some of which may be the
Company's own licensees.

The Company is a leading producer of plastic and metal fastening components,
fasteners and assemblies; adhesivesindustrial fluids and fluids;adhesives; tooling for specialty
applications; welding products; packaging systems and related consumables;
finishingindustrial spray coating and static control systems and products; quality measurement
equipment; tooling for specialty applications; and arc welding equipment and relatedsystems; and quality
assurance equipment and systems.

Raw Materials-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-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 determined in accordance with generally accepted accounting principles are
set forth on page 27 of the Company's 19951996 Annual Report to Stockholders.

4
The Company owns approximately 1,6641,700 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 395355 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-
- ----------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, Hobart, Keps, Magnaflux,
Miller, Minigrip, Newtec, Oxo, Paktron, Paslode, Powcon, Ramset, Ransburg, Red
Head, Shakeproof, Teks, Tenax and Zip-Pak.

Environmental Protection-
- ------------------------ZipPak.

ENVIRONMENTAL COMPLIANCE

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 affect 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-
- ---------3
5

EMPLOYEES

The Company employed approximately 21,20024,400 persons as of December 31, 19951996
and considers its employee relations to be excellent.

International-
- -------------INTERNATIONAL

The Company's international operations include subsidiaries, joint ventures
and licensees in 3433 countries on six continents. These operations serve such
markets as automotive, food and beverage, construction, general industrial,
industrial capital goods and others on a worldwide basis. The Company's
international subsidiaries contributed approximately 38%36% and 36%38% of operating
revenues in 19951996 and 1994,1995, respectively.

Refer to pages 20 through 2223 in the Company's 19951996 Annual Report to
Stockholders for additional information on international activities.
International operations are subject to certain risks inherent in 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 OfficersEXECUTIVE OFFICERS

Executive Officers of the Company as of March 5, 1996:11, 1997:

Name Office AgeNAME OFFICE AGE
---- ------ ---

Thomas W. BuckmanBuckman......................... Vice President, Patents and Technology 5859
W. James Farrell PresidentFarrell.......................... Chairman and Chief Executive Officer 5354
Russell M. FlaumFlaum.......................... Executive Vice President 4546
Michael W. GreggGregg.......................... Senior Vice President and Controller, Accounting 6061
Stewart S. HudnutHudnut......................... Senior Vice President, General Counsel and 56
Secretary 57
John KarpanKarpan............................... Senior Vice President, Human Resources 5556
Jon C. KinneyKinney............................. Senior Vice President and Controller, Operations 53

John D. Nichols Chairman 65

Frank S. Ptak54
Dennis J. Martin.......................... Executive Vice President 5246
Frank S. Ptak............................. Vice Chairman 53
F. Ronald SeagerSeager.......................... Executive Vice President 5556
Harold B. SmithSmith........................... Chairman of the Executive Committee 6263
David B. SpeerSpeer............................ Executive Vice President 4445
Donald L. VanErdenVanErden........................ Vice President, Research and Advanced Development 6061
Hugh J. ZentmeyerZentmeyer......................... Executive Vice President 4950

Except for Messrs. Hudnut, Kinney, Martin, Speer, and Zentmeyer, each of the
foregoing officers has been employed by the Company in various elected 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 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. Kinney joined the Company in 1973
and has served as Vice President and Controller, Operations, and Group
Controller of the Company's automotive, construction, finishing systems and
quality measurement groups. Mr. Martin joined the Company in 1991 and has served
as a general manager in the construction products group and has most recently
served as President and Chief Operating Officer of the welding products group.
Mr. Speer joined the Company in 1978 and has held various sales, marketing and
general management positions within the construction products group, most
recently having served as Group Vice President of the worldwide construction
products group. Mr. Zentmeyer joined the Company as part of Signode Corporation
in 1968 and has most recently served as President of the specialty industrial
packaging businesses.

74
6

ITEM 2. PROPERTIES

As of December 31, 19951996 the Company operated the following plants and
office facilities, excluding regional sales offices and warehouse facilities:

NUMBER FLOOR SPACE
Number (in millions of square feet)
of ----------------------------
Properties Owned Leased TotalOF ------------------------
PROPERTIES OWNED LEASED TOTAL
---------- ----- ------ -----
(IN MILLIONS OF SQUARE
FEET)

Domestic --
Engineered Components 79 3.5 1.0 4.5Components........................... 90 4.7 1.6 6.3
Industrial Systems and Consumables 86Consumables.............. 94 3.0 1.6 4.61.7 4.7
Leasing and Investments......................... 18 .7 .2 .9
--- ---- --- ----
165 6.5 2.6 9.1202 8.4 3.5 11.9
--- ---- --- ----
International --
Engineered Components 65Components........................... 67 1.5 .7 2.2
Industrial Systems and Consumables 54 2.5Consumables.............. 64 2.7 .9 3.43.6
--- ---- --- ----
119 4.0131 4.2 1.6 5.65.8
--- ---- --- ----
Corporate 20 1.7 .1 1.8Corporate......................................... 8 1.1 -- 1.1
--- ---- --- ----
304 12.2 4.3 16.5341 13.7 5.1 18.8
=== ==== === ====

The principal international plants are in Australia, Belgium, Canada,
France, Germany, Ireland, Italy, Japan, Malaysia, Spain, Sweden, Switzerland and
the United Kingdom.

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.

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 3739 of the Company's
19951996 Annual Report to Stockholders.

ITEM 6. SELECTED FINANCIAL DATA

This information is incorporated by reference to pages 3840 and 3941 of the
Company's 19951996 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 2223 of the
Company's 19951996 Annual Report to Stockholders.

5
7

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and report thereon of Arthur Andersen LLP dated
January 29, 1996,28, 1997, together with other supplementary data, as found on pages 2324
through 3739 of the Company's 19951996 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 19961997 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 7.4.

ITEM 11. EXECUTIVE COMPENSATION

This information is incorporated by reference to the information under the
caption "Executive Compensation" in the Company's Proxy Statement for the 19961997
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 19961997
Annual Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.

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 LLP dated
January 29, 1996,28, 1997 as found on pages 2324 through 3739 of the Company's 19951996 Annual
Report to Stockholders, are incorporated by reference.

(2) Financial Statement Schedule

The following supplementary financial data should be read in conjunction
with the financial statements and comments thereto as presented in the Company's
19951996 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 onnotes to financial statements.

Schedule Page
No. No.
SCHEDULE PAGE
NO. NO.
-------- ----
Valuation and Qualifying Accounts........................... II 10

(3) Exhibits

(i) See the Exhibit Index on page 11 of this Form 10-K.

6
8

(ii) Pursuant to Regulation S-K, Item 601(b)(4)(iii), the Company has not
filed with Exhibit 4 any debt instruments for which the total amount of
securities authorized thereunder are less than 10% of the total assets of the
Company and Qualifying II 13
Accountsits subsidiaries on a consolidated basis as of December 31, 1996,
with the exception of the agreements related to the 7 1/2% and 5 7/8% Notes,
which are filed with Exhibit 4. The Company agrees to furnish a copy of the
agreements related to the debt instruments which have not been filed with
Exhibit 4 to the Securities and Exchange Commission upon request.

(b) Reports on Form 8-K

No reports on Form 8-K have been filed during the three months ended
December 31, 1995.

101996.

7
9

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULE

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 19951996 Annual
Report to Stockholders, incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 29, 1996.28, 1997. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The schedule
listed in the accompanying index is the responsibility of the Company's
management and is presented for the purpose of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
The schedule has been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly states 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 LLP

Chicago, Illinois,
January 29, 1996

1128, 1997

8
10

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 29th21st day of
March 1996.1997.

ILLINOIS TOOL WORKS INC.

By /s/ W. James Farrell
---------------------------------------JAMES FARRELL
------------------------------------
W. James Farrell
Director, PresidentChairman 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 29th21st day of March 1996.

Signatures Title
--------------------- ------------------------------

/s/ MICHAEL W. GREGG Senior Vice President
-------------------- and Controller, Accounting
Michael W. Gregg (Principal Accounting
and Financial Officer)

Julius W. Becton, Jr. Director
Silas S. Cathcart Director
Susan Crown Director
H. Richard Crowther Director
W. James Farrell Director
L. Richard Flury Director
Richard M. Jones Director
George D. Kennedy Director
Richard H. Leet Director
Robert C. McCormack Director
John D. Nichols Director
Phillip B. Rooney Director
Harold B. Smith Director
Ormand J. Wade Director
Calvin A. H. Waller Director

By /s/ W. James Farrell
---------------------------------------1997.

SIGNATURES TITLE
---------- -----

/s/ MICHAEL W. GREGG Senior Vice President and Controller,
- -------------------------------------------------- Accounting (Principal Accounting and Financial Officer)
Michael W. Gregg

JULIUS W. BECTON, JR. Director

MICHAEL J. BIRCK Director

MARVIN D. BRAILSFORD Director

SUSAN CROWN Director

H. RICHARD CROWTHER Director

W. JAMES FARRELL Director

L. RICHARD FLURY Director

RICHARD M. JONES Director

GEORGE D. KENNEDY Director

RICHARD H. LEET Director

ROBERT C. MCCORMACK Director

PHILLIP B. ROONEY Director

HAROLD B. SMITH Director

ORMAND J. WADE Director

By /s/ W. JAMES FARRELL
-----------------------------------
(W. James Farrell
as Attorney-in-Fact)

Original powers of attorney authorizing W. James Farrell 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).

129
11

SCHEDULE II

ILLINOIS TOOL WORKS INC.

VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994, 1995, AND 1995

SCHEDULE II1996

Deductions
-------------------------------------------
Receivables
Balance at Provisions Written off, Balance
Beginning Charged to Net ofDEDUCTIONS
-----------------------------------
RECEIVABLES
BALANCE AT PROVISIONS WRITTEN OFF, BALANCE
BEGINNING CHARGED TO NET OF (1) at End
(In thousands) of Period Income Acquisitions Recoveries Dispositions Other of PeriodAT END
OF PERIOD INCOME ACQUISITIONS RECOVERIES DISPOSITIONS OTHER OF PERIOD
---------- ---------- ------------ ---------- ------------ ------------------ ----- ---------
(IN THOUSANDS)

Year Ended December 31,
1993:
Allowances for uncollectible
accounts $17,800 $8,233 740 $(7,496) -- (1,277) 18,000

Year Ended December 31, 1994:
Allowances for
uncollectible
accounts 18,000 7,191 1,234accounts............. $18,000 $7,191 $1,234 $ (6,983) (131)$(131) $ 289 19,600$19,600
Year Ended December 31,
1995:
AllowanceAllowances for
uncollectible
accountsaccounts............. 19,600 6,889 2,672 (5,763) (414) 516 23,500
Year Ended December 31,
1996:
Allowances for
uncollectible
accounts............. 23,500 4,451 4,836 (10,319) 111 (179) 22,400

- ---------------

(1) Primarily represents effect of foreign currency translation.

1310
12

EXHIBIT INDEX

ANNUAL REPORT onON FORM 10-K
1995
Exhibit
Number Description
- ------- -----------
3(a) Restated Certificate of Incorporation of Illinois Tool Works Inc., as
amended, filed as Exhibit 4(a) to the Company's Registration Statement
on Form S-8 (Registration No. 33-53517) filed with the Securities and
Exchange Commission on May 6, 1994 and incorporated herein by
reference.

3(b) By-laws of Illinois Tool Works Inc., as amended.

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) Amendment to the Illinois Tool Works Inc. Stock Incentive Plan dated
December 8, 1994 filed as Exhibit 10(b) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994 (Commission
File No. 1-4797) and incorporated herein by reference.

10(c) 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.

10(d) 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(e) 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(f) 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(g) 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(h) Phantom stock agreements 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(i) Amendment to the Phantom stock agreements between Illinois Tool Works
Inc. and John D. Nichols, dated January 1, 1991 (see 10(h) 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(j) Directors' deferred fee plan, non-officer directors' restricted stock
program, and non-officer directors' phantom stock plan, descriptions
of which are under the caption "Directors' Compensation" in the
Company's Proxy Statement for the 1996

Annual Meeting of Stockholders.

10(k) 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(l) 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(m) 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.

10(n) Amendment to the Illinois Tool Works Inc. 1993 Executive Contributory
Retirement Income Plan dated December 5, 1994, filed as Exhibit 10(n)
to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (Commission File No. 1-4797) and incorporated herein
by reference.

13 The Company's 1995 Annual Report to Stockholders, pages 20 - 39, filed
as Exhibit 13 to the Company's Form 8-KA Current Report dated February
21, 1996, as amended March 25,
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

3(a) -- Restated Certificate of Incorporation of Illinois Tool Works
Inc., as amended, filed as Exhibit 4(a) to the Company's
Registration Statement on Form S-8 (Registration No.
33-53517) filed with the Securities and Exchange Commission
on May 6, 1994 and incorporated herein by reference.
3(b) -- By-laws of Illinois Tool Works Inc., as amended, filed as
Exhibit 4.3 to the Company's Registration Statement on Form
S-8 (Registration Statement No. 333-17473) filed with the
Securities and Exchange Commission on December 9, 1996, and
incorporated herein by reference.
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) -- 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(e) -- 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(f) -- 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.
10(a) -- Illinois Tool Works Inc. 1996 Stock Incentive Plan dated
February 16, 1996, filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-8 (Registration Statement
No. 333-22035) filed with the Securities and Exchange
Commission on February 19, 1997, and incorporated herein by
reference.
10(b) -- 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(c) -- 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(d) -- Amendment to the Illinois Tool Works Inc. 1985 Executive
Contributory Retirement Income Plan dated May 1, 1996, filed
as Exhibit 10(c) to the Company's Quarterly Report on Form
10-Q for the quarterly period ended June 30, 1996
(Commission File No. 1-4797) and incorporated herein by
reference.
21 Subsidiaries of the Company.

22 Information under the captions "Election of Directors," "Executive
Compensation" and "Security Ownership" in the Company's Proxy
Statement for the

11
13

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

10(e) -- Illinois Tool Works Inc. Executive Incentive Plan adopted
February 16, 1996, filed as Exhibit 10(a) to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1996 (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) -- Directors' deferred fee plan, non-officer directors'
restricted stock program, and non-officer directors' phantom
stock plan, descriptions of which are under the caption
"Directors' Compensation" in the Company's Proxy Statement
for the 1997 Annual Meeting of Stockholders.
10(h) -- Illinois Tool Works Inc. Phantom Stock Plan for Non-officer
Directors, filed as Exhibit 10(e) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
1996 (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.
10(l) -- Amendment to the Illinois Tool Works Inc. 1993 Executive
Contributory Retirement Income Plan dated December 5, 1994,
filed as Exhibit 10(n) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994
(Commission File No. 1-4797) and incorporated herein by
reference.
10(m) -- Amendment to the Illinois Tool Works Inc. 1993 Executive
Contributory Retirement Income Plan dated June 24, 1996,
filed as Exhibit 10(d) to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1996
(Commission File No. 1-4797) and incorporated herein by
reference.
13 -- The Company's 1996 Annual Report to Stockholders, pages
20 -- 41.
21 -- Significant Subsidiaries of the Company.
22 -- Information under the captions "Election of Directors,"
"Executive Compensation" and "Security Ownership" in the
Company's Proxy Statement for the 1997 Annual Meeting of
Stockholders.
23 -- Consent of Arthur Andersen LLP.
24 -- Powers of Attorney.
27 -- Financial Data Schedule.
16