10-Q

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

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 West Lake Avenue, Glenview, IL              60025-5811
  (Address of principal executive offices)            (Zip Code)

(Registrant's telephone number, including area code) (847) 724-7500
                                 Former address:
              (Former name, former address and former fiscal year,
                         if changed since last report.)

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  .

The number of shares of registrant's  common stock, $.01 par value,  outstanding
at September 30, 2002: 306,434,121.





Part I - Financial Information


Item 1








                    ILLINOIS TOOL WORKS INC. and SUBSIDIARIES

                              FINANCIAL STATEMENTS


The  unaudited  financial  statements  included  herein  have been  prepared  by
Illinois Tool Works Inc. and  Subsidiaries  (the  "Company").  In the opinion of
management, the interim financial statements reflect all adjustments of a normal
recurring  nature  necessary  for a fair  statement  of the  results for interim
periods. It is suggested that these financial  statements be read in conjunction
with the financial  statements and notes to financial statements included in the
Company's Annual Report on Form 10-K. Certain  reclassifications of prior years'
data have been made to conform with current year reporting.



                    ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
                               STATEMENT OF INCOME
                                   (UNAUDITED)


(In Thousands Except for
 Per Share Amounts)

                                   Three Months Ended     Nine Months Ended
                                     September 30           September 30
                               -----------------------  ----------------------
                                  2002         2001        2002        2001
                               -----------  ----------  ----------  ----------
Operating Revenues              $2,401,038  $2,301,168  $7,040,317  $7,014,510
 Cost of revenues                1,561,548   1,527,862   4,612,670   4,660,477
 Selling, administrative,
  and research and development
  expenses                         437,526     420,832   1,276,658   1,276,025
 Amortization of goodwill
  and other intangible assets        5,028      27,825      15,146      77,214
                                 ---------   ---------   ---------   ---------
Operating Income                   396,936     324,649   1,135,843   1,000,794
 Interest expense                  (14,652)    (17,786)    (50,576)    (53,311)
 Other expense                      (6,524)     (2,915)     (2,390)     (2,480)
                                 ---------   ---------   ---------   ---------
Income from Continuing Operations
  Before Income Taxes              375,760     303,948   1,082,877     945,003
Income taxes                       131,500     106,067     379,000     330,263
                                 ---------   ---------   ---------   ---------
Income from Continuing Operations  244,260     197,881     703,877     614,740
Income (Loss) from Discontinued
  Operations                         1,276       1,174       7,617        (151)
Cumulative Effect of Change in
  Accounting Principle                  --          --    (221,890)         --
                                 ---------   ---------   ---------   ---------
Net Income                       $ 245,536   $ 199,055   $ 489,604   $ 614,589
                                 =========   =========   =========   =========

Income Per Share from
Continuing Operations:
  Basic                              $0.80       $0.65       $2.30       $2.02
  Diluted                            $0.79       $0.65       $2.28       $2.01

Income Per Share from
Discontinued Operations:
  Basic                               $ --        $ --       $0.02        $ --
  Diluted                             $ --        $ --       $0.02        $ --

Cumulative Effect Per Share of
Change in Accounting Principle:
  Basic                               $ --        $ --      $(0.73)       $ --
  Diluted                             $ --        $ --      $(0.72)       $ --

Net Income Per Share:
  Basic                              $0.80       $0.65       $1.60       $2.02
  Diluted                            $0.80       $0.65       $1.59       $2.01

Pro Forma Excluding Goodwill
Amortization:
  Income from Continuing
   Operations                    $ 244,260   $ 216,534   $ 703,877   $ 667,588
  Income per Diluted Share from
   Continuing Operations             $0.79       $0.71       $2.28       $2.18

Cash dividends:
  Paid                               $0.22       $0.20       $0.66       $0.60
  Declared                           $0.23       $0.22       $0.67       $0.62


Shares of common stock
Outstanding during the period:
  Average                          306,408     304,522     306,045     303,908
  Average assuming dilution        307,893     306,463     308,094     306,204




                ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
                     STATEMENT OF FINANCIAL POSITION
                               (UNAUDITED)

(In Thousands)

ASSETS                            September 30, 2002   December 31, 2001

Current Assets:
  Cash and equivalents                     $720,421        $282,224
  Trade receivables                       1,574,888       1,450,029
  Inventories                               981,949         994,156
  Deferred income taxes                     196,847         197,428
  Prepaids and other current assets         133,981         139,226
  Net current assets of
   discontinued operations                   99,248         100,181
                                       ------------    ------------
      Total current assets                3,707,334       3,163,244
                                       ------------    ------------

Plant and Equipment:
  Land                                      118,116         114,649
  Buildings and improvements              1,007,599         960,232
  Machinery and equipment                 2,879,136       2,800,341
  Equipment leased to others                130,278         123,422
  Construction in progress                  150,365         105,316
                                       ------------    ------------
                                          4,285,494       4,103,960
  Accumulated depreciation               (2,648,767)     (2,470,270)
                                       ------------    ------------
  Net plant and equipment                 1,636,727       1,633,690
                                       ------------    ------------

Investments                               1,412,901       1,278,285
Goodwill                                  2,374,807       2,516,813
Intangible Assets                           220,171         221,881
Deferred Income Taxes                       500,206         439,278
Other Assets                                473,486         459,429
Net Noncurrent Assets of
  Discontinued Operations                   102,168         109,729
                                       ------------    ------------
                                        $10,427,800      $9,822,349
                                       ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Short-term debt                          $132,804        $313,447
  Accounts payable                          416,043         367,249
  Accrued expenses                          847,831         795,210
  Cash dividends payable                     70,480          67,084
  Income taxes payable                       51,721          32,922
                                       ------------    ------------
    Total current liabilities             1,518,879       1,575,912
                                       ------------    ------------
Non-current Liabilities:
  Long-term debt                          1,474,666       1,267,141
  Other liabilities                         936,015         938,558
                                       ------------    ------------
    Total non-current liabilities         2,410,681       2,205,699
                                       ------------    ------------
Stockholders' Equity:
  Common stock                                3,067           3,052
  Additional Paid-in-Capital                716,910         675,856
  Income reinvested in the business       6,049,789       5,765,421
  Common stock held in treasury              (1,662)         (1,666)
  Cumulative translation adjustment        (269,864)       (401,925)
                                       ------------    ------------
      Total stockholders' equity          6,498,240       6,040,738
                                       ------------    ------------
                                        $10,427,800      $9,822,349
                                       ============    ============




                    ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

(In Thousands)
                                                            Nine Months Ended
                                                              September 30
                                                          ---------------------
                                                             2002        2001
                                                          ----------   --------
Cash Provided by (Used for) Operating Activities:
 Net income                                                $489,604     $614,589
 Adjustments to reconcile net income to net cash
  provided by operating activities:
   (Income)loss from discontinued operations                 (7,617)         151
   Non-cash goodwill impairment charge                      221,890           --
   Depreciation and amortization                            228,098      294,774
   Change in deferred income taxes                          (13,760)     (16,212)
   Provision for uncollectible accounts                      19,737       12,051
   Loss on sale of plant and equipment                        2,012        5,136
   Income from investments                                 (105,722)    (107,810)
   Non-cash interest on nonrecourse debt                     29,742       32,229
   Loss on sale of operations and affiliates                  3,233        4,302
   Other non-cash items, net                                  2,135       (5,770)
                                                          ---------    ---------
   Cash provided by operating activities                    869,352      833,440
Changes in assets and liabilities:
 (Increase) decrease in--
   Trade receivables                                        (80,563)      53,685
   Inventories                                               42,351       84,016
   Prepaid expenses and other assets                         (1,898)           5
   Net assets of discontinued operations                     16,456       22,090
 Increase (decrease) in:
   Accounts payable                                          20,824      (80,272)
   Accrued expenses and other liabilities                    45,807      (54,214)
   Income taxes payable                                      31,741       62,924
 Other, net                                                      74         (278)
                                                          ---------    ---------
  Net cash provided by operating activities                 944,144      921,396
                                                          ---------    ---------
Cash Provided by (Used for) Investing Activities:
 Acquisition of businesses (excluding cash and
  equivalents) and additional interest in affiliates       (105,715)    (535,334)
 Additions to plant and equipment                          (192,547)    (193,420)
 Purchase of investments                                   (190,812)     (77,639)
 Proceeds from investments                                   49,329       67,536
 Proceeds from sale of plant and equipment                   19,757       14,148
 Proceeds from sale of operations and affiliates              4,105        9,800
 Sales of short-term investments                              1,736        1,638
 Other, net                                                   2,658        1,377
                                                          ---------    ---------
   Net cash used for investing activities                  (411,489)    (711,894)
                                                          ---------    ---------
Cash Provided by (Used for) Financing Activities:
 Cash dividends paid                                       (201,839)    (182,140)
 Issuance of common stock                                    40,888       46,650
 Net borrowings (repayments) of short-term debt            (210,101)       6,039
 Proceeds from long-term debt                               254,230        4,182
 Repayments of long-term debt                               (27,662)      (9,986)
 Other, net                                                   1,434        1,464
                                                          ---------    ---------
  Net cash used for financing activities                   (143,050)    (133,791)
                                                          ---------    ---------
Effect of Exchange Rate Changes on Cash and Equivalents      48,592        2,307
                                                          ---------    ---------
Cash and Equivalents:
  Increase during the period                                438,197       78,018
  Beginning of period                                       282,224      151,295
                                                          ---------    ---------
  End of period                                            $720,421     $229,313
                                                          =========    =========
Cash Paid During the Period for Interest                    $53,697      $64,194
                                                          =========    =========
Cash Paid During the Period for Income Taxes               $300,889     $266,899
                                                          =========    =========
Liabilities Assumed from Acquisitions                       $25,694      $93,095
                                                          =========    =========




                ILLINOIS TOOL WORKS INC. and SUBSIDIARIES
                      NOTES TO FINANCIAL STATEMENTS
                               (UNAUDITED)

(1) INVENTORIES:

Inventories at September 30, 2002 and December 31, 2001 were as follows:

(In Thousands)
                     September 30,    December 31,
                        2002             2001
                     ------------     ------------

Raw material          $289,545         $287,067
Work-in-process        105,644          101,418
Finished goods         586,760          605,671
                      --------         --------
                      $981,949         $994,156
                      ========         ========

(2) COMPREHENSIVE INCOME:

The only component of other comprehensive income that the Company has is foreign
currency translation adjustments.

(In Thousands)

                                   Three Months Ended      Nine Months Ended
                                     September 30            September 30
                                  -------------------   --------------------
                                    2002       2001       2002       2001
                                  --------   --------   --------   --------
Net income                        $245,536   $199,055   $489,604   $614,589
Foreign currency translation
 adjustments, net of tax            61,460     63,198    132,061     15,323
                                  --------   --------   --------   --------

 Total comprehensive income       $306,996   $262,253   $621,665   $629,912
                                  ========   ========   ========   ========

(3) DISCONTINUED OPERATIONS:

In December 2001, the Company's Board of Directors authorized the divestiture of
the Consumer  Products  segment.  This  segment is  comprised  of the  following
businesses:  Precor  specialty  exercise  equipment,  West Bend  appliances  and
premium  cookware,  and Florida Tile ceramic tile.  The  Company's  consolidated
financial  statements  for all  periods  have been  restated  to  present  these
businesses as discontinued  operations in accordance with Accounting  Principles
Board  Opinion  No. 30. On October 31,  2002,  the sales of Precor and West Bend
were  completed.  An agreement for the sale of Florida Tile is being  negotiated
and is expected to be completed in the fourth  quarter of 2002. The Company does
not expect to incur a net loss on the  disposal of the  segment.  Results of the
discontinued operations were as follows:

(In Thousands)

                             Three Months Ended      Nine Months Ended
                                September 30           September 30
                             -------------------   -------------------
                               2002       2001       2002       2001
                             --------   --------   --------   --------
Operating revenues            $91,831    $94,477   $286,901   $288,081
                             ========   ========   ========   ========

Pro forma operating income     $3,713     $3,560    $16,600     $4,887
                             ========   ========   ========   ========

Pro forma income before
  income taxes                 $3,206     $2,800    $13,286     $2,265
Income taxes                    1,930      1,033      5,669        637
                             --------   --------   --------   --------
 Pro forma income from
   discontinued operations     $1,276     $1,767     $7,617     $1,628
                             ========   ========   ========   ========

The actual  results for 2001 have been  adjusted to reflect the pro forma effect
of  the  elimination  of  the  amortization  of  goodwill  and  indefinite-lived
intangible assets of $593,000 and $1,779,000, respectively, for the three months
and nine months ended September 30, 2001.

The Company has allocated  general  corporate  interest  expense to discontinued
operations based on proportional net assets  excluding  general  corporate debt.
Interest  expense  allocated  to  discontinued  operations  was  $1,536,000  and
$1,544,000 for the nine months ended September 30, 2002 and 2001, respectively.

The net assets of the  discontinued  operations  as of  September  30,  2002 and
December 31, 2001 were as follows:

(In Thousands)
                                       Sept. 30,       Dec. 31,
                                         2002            2001
                                      ----------      ----------

Accounts receivable                     $55,613         $64,897
Inventory                                78,880          71,481
Accounts payable                        (12,230)        (14,258)
Accrued liabilities                     (40,739)        (40,686)
Other, net                               17,724          18,747
                                      ---------       ---------
Net current assets of
 discontinued operations                $99,248        $100,181
                                      =========       =========

Net plant and equipment                 $72,875         $79,730
Net goodwill and intangibles             68,200          68,200
Other, net                              (38,907)        (38,201)
                                      ---------       ---------
Net noncurrent assets of
 discontinued operations               $102,168        $109,729
                                      =========       =========

(4) INVESTMENTS:

In 2002, the Company  entered into  leveraged  leasing  transactions  related to
mobile telecommunications  equipment with two major European  telecommunications
companies.  The  components of the  Company's  total cash  investment  for these
transactions of $144,676,000 were as follows:

(In Thousands)

  Gross lease contracts receivable              $991,426
  Non-recourse debt service                     (914,724)
  Estimated residual value of leased assets      151,908
  Unearned and deferred income                   (83,934)
                                                --------
                                                $144,676
                                                ========

(5) GOODWILL AND INTANGIBLE ASSETS:

Goodwill  represents  the  excess  cost  over  fair  value of the net  assets of
purchased businesses.

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). Under SFAS
142, the Company will no longer  amortize  goodwill and  intangibles  which have
indefinite  lives.  SFAS 142 also requires that the Company assess  goodwill and
intangibles with indefinite lives for impairment at least annually, based on the
fair value of the related  reporting  unit or intangible  asset.  On an on-going
basis,  the Company expects to perform its annual  impairment  assessment in the
first quarter of each year.

As the first step in the SFAS 142 implementation  process,  the Company assigned
its recorded  goodwill and  intangibles  to  approximately  300 of its reporting
units.  Then, the fair value of each reporting unit was compared to its carrying
value. Fair values were determined by discounting estimated future cash flows.

Based on the  Company's  initial  impairment  testing,  goodwill and  intangible
assets were reduced by  $262,816,000  and a net after-tax  impairment  charge of
$221,890,000  ($0.72 per diluted share) was recognized as a cumulative effect of
change in  accounting  principle in the first  quarter of 2002.  The  impairment
charge was related to  approximately  40 businesses and primarily  resulted from
evaluating  impairment under SFAS 142 based on discounted cash flows, instead of
using undiscounted cash flows as required by the previous accounting standard.

The  changes in the  carrying  amount of goodwill by segment for the nine months
ended September 30, 2002 were as follows:

(In Thousands)

                Engineered    Engineered     Specialty      Specialty
                 Products -    Products -     Systems -      Systems -
               North America International  North America  International  Total
               ------------- -------------  -------------  -------------  -----
Balance,
 Dec. 31, 2001  $574,962       $424,223       $853,557     $664,071   $2,516,813
Acquisitions     (12,694)         9,938         40,622       34,245       72,111
Impairment
 write-offs      (51,002)       (18,745)       (85,977)     (98,858)    (254,582)
Foreign currency
 translation        (235)        17,350             --       23,350       40,465
                --------       --------       --------     --------   ----------
Balance,
Sept. 30, 2002  $511,031       $432,766       $808,202     $622,808   $2,374,807
                ========       ========       ========     ========   ==========

Intangible  assets  as of  September  30,  2002 and  December  31,  2001 were as
follows:

(In Thousands)

                             As of September 30, 2002   As of December 31, 2001
                            -------------------------  ------------------------
                                   Accumulated               Accumulated
                            Cost   Amortization  Net   Cost  Amortization   Net
                            ----   ------------  ---   ----  ------------   ---
Amortizable Intangibles:
 Trademarks and brands     $9,902  $(2,261)    $7,641   $9,339 $(1,685)  $7,654
 Customer lists and
  Relationships            13,971   (4,531)     9,440   28,371  (2,848)  25,523
 Patents                   86,002  (38,667)    47,335   74,971 (34,762)  40,209
 Noncompete agreements     66,954  (27,802)    39,152   63,203 (21,742)  41,461
 Other                     52,063  (28,828)    23,235   50,239 (25,648)  24,591
Indefinite-lived Intangibles:
 Trademarks and brands     93,368       --    93,368    82,443      --   82,443
                         -------- ---------  -------- -------- -------- -------
Total Intangible Assets  $322,260 $(102,089) $220,171 $308,566 $(86,685)$221,881
                         ======== =========  ======== ======== ======== ========

Amortization expense related to amortizable intangible assets was $5,028,000 and
$15,146,000,  respectively, for the three months and nine months ended September
30, 2002, and $5,994,000 and $15,428,000, respectively, for the three months and
nine months ended September 30, 2001.

The estimated  amortization  expense of  intangible  assets for the years ending
December 31 is as follows:

(In Thousands)

2002                 $20,078
2003                  17,693
2004                  16,978
2005                  15,962
2006                  14,518
2007                  11,660


A reconciliation of the previously reported 2001 statement of income information
to pro forma amounts that reflect the  elimination of  amortization  of goodwill
and indefinite-lived intangible assets is presented below:

(In Thousands, except per share amounts)
                                       Three months ended     Nine months ended
                                       September 30, 2001     September 30, 2001
                                     ----------------------   ------------------
                                               Per Share             Per Share
                                             -------------         -------------

                                     Amount  Basic Diluted  Amount Basic Diluted
                                     ------  ----- -------  ------ ----- -------

Income from continuing
 operations, as reported           $197,881  $0.65   $0.65  $614,74 $2.02  $2.01
Amortization of goodwill
 and indefinite-lived
 intangible assets                   18,653   0.06    0.06   52,848  0.17   0.17
                                    -------                 -------
Pro forma income from continuing
 operations                         216,534   0.71    0.71  667,588  2.20   2.18
                                    -------                 -------

Income (loss) from discontinued
operations,as reported                1,174   0.00    0.0      (151)(0.00) (0.00)
Amortization of goodwill
 and indefinite-lived
 intangible assets                      593   0.00   0.00     1,779  0.01   0.01
                                    -------                 -------
Pro forma income from
 discontinued operations              1,767   0.01   0.01     1,628  0.01   0.01
                                    -------                 -------

Pro forma net income               $218,301   0.72   0.71  $669,216  2.20   2.19
                                    =======                 =======

(6) SHORT-TERM DEBT:

In June 2002, the Company entered into a $400,000,000  Line of Credit  Agreement
with a termination date of June 20, 2003.

(7) LONG-TERM DEBT:

In  April  2002,  a  subsidiary  of the  Company  issued  $250,000,000  of 6.55%
preferred debt  securities  due December 31, 2011 at 99.849% of face value.  The
effective interest rate of the preferred debt securities is 6.74%.

(8) SEGMENT INFORMATION:

See  Management's  Discussion and Analysis for information  regarding  operating
revenues and operating income for the Company's segments.

Item 2 - Management's Discussion and Analysis

ENGINEERED PRODUCTS - NORTH AMERICA

Businesses  in this segment are located in North America and  manufacture  short
lead-time  plastic and metal  components and fasteners,  and specialty  products
such as polymers, fluid products and resealable packaging.

(Dollars in Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   ------------------------
                        2002           2001         2002           2001
                     ----------      ---------   ----------     ----------

Operating revenues     $767,873      $748,054    $2,314,118     $2,269,502

Operating income        128,015       130,716       408,108        380,166

Margin %                   16.7%         17.5%        17.6%          16.8%

Operating  revenues increased 3% in the third quarter mainly as a result of base
business revenues increasing by 3%, with acquisitions having no impact. The base
business  revenue increase was mainly due to strong demand in the automotive and
general  industrial  businesses,  offset  by  lower  demand  in  the  commercial
construction end markets.  Year-to-date  operating  revenues increased 2% due to
acquisitions.  Base business  revenue for the  year-to-date  period was flat, as
higher  revenues from the automotive  businesses  were offset by weakness in the
polymers, construction, electronic packaging and machined components businesses.
Operating  income in the third  quarter  declined by 2% and margins  declined 80
basis  points  as  contributions  from the  automotive  and  general  industrial
businesses  resulting  from cost  control  measures  were  more  than  offset by
weakness in the commercial  construction end market and increased warranty costs
in  the  laminate  business.  For  the  year-to-date  period,  operating  income
increased 7% and margins  increased  by 80 basis points  mainly due to increased
revenues and reduced costs,  primarily in the automotive and general  industrial
businesses.

ENGINEERED PRODUCTS - INTERNATIONAL

Businesses in this segment are located  outside  North  America and  manufacture
short  lead-time  plastic and metal  components  and  fasteners,  and  specialty
products such as polymers, fluid products and electronic component packaging.

(Dollars in Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   -------------------------
                        2002           2001         2002           2001
                     ----------     ----------   ----------     ----------

Operating revenues     $394,659      $341,729    $1,118,244     $1,083,383

Operating income         59,238        40,270       146,093        126,804

Margin %                  15.0%         11.8%         13.1%          11.7%

For the third quarter 2002, operating revenue increased 15% due to a 4% increase
in base business,  a 2% increase from  acquisitions  and a 9% contribution  from
currency fluctuation.  Base business revenues increased for the third quarter in
the  construction,  automotive,  industrial  plastics and  electronic  packaging
businesses.  For the nine-month period, revenues increased 3% mainly due to a 2%
increase in both acquisitions and currency  fluctuation  offset by a 1% decrease
related to divestitures.  Year-to-date  base business revenue growth was flat as
increases  in the  construction  businesses  were  offset  by  declines  for the
automotive  operations.  Operating income increased 47% in the third quarter and
15% year-to-date,  with corresponding  margin gains of 320 and 140 basis points,
respectively.  Income and margin  improvements  for both periods were  primarily
related  to the  construction,  industrial  plastics  and  electronic  packaging
businesses.  The automotive  business also  contributed to the income and margin
increases for the third quarter. Currency translation positively impacted income
in the third quarter and year-to-date period by 12% and 3%, respectively.

SPECIALTY SYSTEMS -NORTH AMERICA

Businesses  in this  segment  are located in North  America  and produce  longer
lead-time  machinery  and  related  consumables,  and  specialty  equipment  for
applications such as food service and industrial finishing.

(Dollars in Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   -------------------------
                        2002           2001         2002           2001
                     ----------     ----------   ----------     ----------

Operating revenues     $856,040      $867,243    $2,553,322     $2,588,720

Operating income        145,378       117,627       393,597        356,095

Margin %                  17.0%         13.6%         15.4%          13.8%

In 2002,  operating  revenues  declined  by 1% for both the  third  quarter  and
year-to-date  period,  largely due to a continued weakness in customers' capital
spending.  Base business  revenue  declines of 3% and 5% for the three-month and
nine-month periods,  respectively,  were partially offset by acquisition revenue
increases  of 2% and  4%,  respectively.  Both  periods  were  impacted  by base
business declines in the industrial  packaging,  food equipment,  ground support
equipment, and marking and decorating businesses. Operating income increased 24%
in the third quarter and 11%  year-to-date  mainly due to cost reductions in the
food equipment,  industrial packaging, finishing and welding businesses. Margins
increased  340 basis  points and 160 basis  points,  respectively,  due to lower
costs in most businesses.

SPECIALTY SYSTEMS - INTERNATIONAL

Businesses in this segment are located  outside  North  America and  manufacture
longer lead-time machinery and related consumables,  and specialty equipment for
applications such as food service and industrial finishing.

(Dollars in Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   -------------------------
                        2002           2001         2002           2001
                     ----------      ---------   ----------     ----------

Operating revenues     $440,959      $403,975    $1,231,976     $1,243,580

Operating income         45,821        39,325       128,231        135,002

Margin %                  10.4%          9.7%         10.4%          10.9%

Operating  revenues  increased 9% for the third quarter of 2002 and decreased by
1% for the year-to-date period. The base businesses negatively impacted revenues
by 3% and 6%,  respectively,  primarily  related to declines  in the  industrial
packaging,  food equipment and  decorating  businesses.  Acquisitions  increased
revenues by 3% for both periods while divestitures reduced revenues by 1% in the
third  quarter and had a neutral  impact  year-to-date.  Translation  positively
impacted  revenues by 9% and 2% for the  respective  periods.  Operating  income
increased 17% for the third quarter of 2002 and decreased 5%  year-to-date.  For
the third  quarter,  operating  income was  favorably  impacted by base business
income and margin  increases in the food  equipment,  industrial  packaging  and
finishing  businesses,  as well as a 12% increase  due to currency  fluctuation.
Year-to-date base business income decreased by 6% as a result of income declines
in the industrial packaging, static control and decorating businesses, partially
offset by higher income in the food  equipment  operations and a 2% increase due
to currency translation.  Margins  correspondingly  decreased by 50 basis points
for the year-to-date period.

LEASING AND INVESTMENTS

This  segment  makes  opportunistic   investments  in  mortgage-related  assets,
leveraged and direct financing leases of telecommunications,  aircraft and other
equipment,  properties  and property  developments,  affordable  housing,  and a
venture capital fund.

(In Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   ------------------------
                        2002           2001         2002          2001
                     ----------      ---------   ----------    ----------

Operating revenues    $34,782         $35,104    $107,419        $116,384

Operating income       18,484          18,542      59,814          64,513

In the third  quarter of 2002,  operating  revenues  decreased 1% and income was
flat,  due mainly to losses on the sales of  commercial  mortgage and  equipment
leasing  assets,  offset by revenue and income  from the new  telecommunications
leveraged leases. For the year-to-date period,  revenues decreased 8% and income
decreased 7%, as revenue and income from the telecommunications leases were more
than offset by losses on sales in the commercial  mortgage and equipment leasing
portfolios, and a gain on the sale of a property in 2001.

OPERATING REVENUES

The  reconciliation of segment operating revenues to total operating revenues is
as follows:

                                     Three months ended     Nine months ended
                                        September 30            September 30
                                    ---------------------  ---------------------
                                       2002      2001        2002        2001
                                    ---------  ---------   ---------   ---------
Engineered Products - North America  $767,873   $748,054  $2,314,118  $2,269,502
Engineered Products - International   394,659    341,729   1,118,244   1,083,383
Specialty Systems - North America     856,040    867,243   2,553,322   2,588,720
Specialty Systems - International     440,959    403,975   1,231,976   1,243,580
Leasing and Investments                34,782     35,104     107,419     116,384
                                    ---------  ---------   ---------   ---------
  Total segment operating revenues  2,494,313  2,396,105   7,325,079   7,301,569
Intersegment revenues                 (93,275)   (94,937)   (284,762)   (287,059)
                                    ---------  ---------   ---------   ---------
  Total company operating revenues $2,401,038 $2,301,168  $7,040,317  $7,014,510
                                    =========  =========   =========   =========

OPERATING INCOME

Segment  operating  income for 2001 was restated to exclude the  amortization of
goodwill and  indefinite-lived  intangible assets. The reconciliation of segment
operating income to total operating income is as follows:

                                       Three months ended     Nine months ended
                                         September 30           September 30
                                     --------------------  ---------------------
                                        2002       2001       2002       2001
                                     ---------  ---------  ---------   ---------
Engineered Products - North America   $128,015   $130,716   $408,108    $380,166
Engineered Products - International     59,238     40,270    146,093     126,804
Specialty Systems - North America      145,378    117,627    393,597     356,095
Specialty Systems - International       45,821     39,325    128,231     135,002
Leasing and Investments                 18,484     18,542     59,814      64,513
                                       -------    -------  ---------   ---------
  Total segment operating income       396,936    346,480  1,135,843   1,062,580
Amortization of goodwill and
 indefinite-lived intangible assets         --    (21,831)        --     (61,786)
                                       -------    -------   ---------  ---------
  Total operating income              $396,936   $324,649  $1,135,843 $1,000,794
                                       =======    =======   =========  =========

OPERATING EXPENSES

Cost of revenues as a  percentage  of revenues  decreased  to 65.5% in the first
nine  months  of 2002  versus  66.4%  in 2001 due to cost  improvements  in most
businesses. Selling, administrative,  and research and development expenses as a
percent of revenues in the nine-month  period declined slightly to 18.1% in 2002
versus 18.2% in 2001.

AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). Under SFAS
142, the Company will no longer  amortize  goodwill and  intangibles  which have
indefinite  lives.  SFAS 142 also requires that the Company assess  goodwill and
intangibles with indefinite lives for impairment at least annually, based on the
fair value of the related  reporting  unit or intangible  asset.  On an on-going
basis,  the Company expects to perform its annual  impairment  assessment in the
first quarter of each year.

As the first step in the SFAS 142 implementation  process,  the Company assigned
its recorded  goodwill and  intangibles  to  approximately  300 of its reporting
units.  Then, the fair value of each reporting unit was compared to its carrying
value. Fair values were determined by discounting estimated future cash flows.

Based on the  Company's  initial  impairment  testing,  goodwill and  intangible
assets were reduced by  $262,816,000  and a net after-tax  impairment  charge of
$221,890,000  ($0.72 per diluted share) was recognized as a cumulative effect of
change in  accounting  principle in the first  quarter of 2002.  The  impairment
charge was related to  approximately  40 businesses and primarily  resulted from
evaluating  impairment under SFAS 142 based on discounted cash flows, instead of
using undiscounted cash flows as required by the previous accounting standard.

Amortization expense related to amortizable intangible assets was $5,028,000 and
$15,146,000  for the three  months and nine months  ended  September  30,  2002,
respectively,  and  $5,994,000  and  $15,428,000  for the three  months and nine
months ended September 30, 2001, respectively.

All pro forma data  presented  in this  report  reflect the  elimination  of the
amortization of goodwill and indefinite-lived intangibles in prior years.

INTEREST EXPENSE

Interest  expense  decreased  to $50.6  million in the first nine months of 2002
from  $53.3  million in 2001  primarily  as a result of lower  commercial  paper
borrowings  partially offset by interest  expense on the $250 million  preferred
debt securities issued in April 2002.

OTHER EXPENSE

Other  expense  was $2.4  million  for the first nine months of 2002 versus $2.5
million in 2001,  primarily as a result of higher losses on foreign  currency in
2002 offset by lower  losses on the sale of plant and  equipment  in 2002 versus
2001.

INCOME FROM CONTINUING OPERATIONS

Income from continuing operations of $703.9 million ($2.28 per diluted share) in
the first nine months of 2002 was 14.5% higher than 2001 income from  continuing
operations of $614.7 million ($2.01 per diluted share).

Pro forma net income from  continuing  operations of $703.9 million in the first
nine months of 2002 was 5.4% higher than 2001 pro forma  income from  continuing
operations of $667.6 million. Net income from continuing  operations per diluted
share of $2.28 for the first nine  months of 2002 was 4.6% higher than pro forma
net income from  continuing  operations per diluted share of $2.18 for the first
nine months of 2001.

FOREIGN CURRENCY

The weakening of the U.S.  dollar against  foreign  currencies in the first nine
months of 2002 increased operating revenues for the first nine months of 2002 by
approximately  $35 million and increased  earnings by  approximately  1 cent per
diluted share.

DISCONTINUED OPERATIONS

In December 2001, the Company's Board of Directors authorized the divestiture of
the Consumer Products segment.  Businesses in this segment are located primarily
in North America and manufacture  household products that are used by consumers,
including  West Bend small  electric  appliances  and premium  cookware,  Precor
specialty  exercise equipment and Florida Tile ceramic tile. On October 31 2002,
the sales of Precor and West Bend were  completed.  An agreement for the sale of
Florida Tile is being  negotiated  and is expected to be completed in the fourth
quarter of 2002. The Company does not expect to incur a net loss on the disposal
of the segment.

Operating results for the discontinued operations were as follows:

(Dollars in Thousands)
                         Three Months Ended        Nine Months Ended
                            September 30             September 30
                     -------------------------   ------------------------
                        2002           2001         2002          2001
                     ----------      ---------   ----------    ----------

Operating revenues     $91,831        $94,477     $286,901      $288,081

Pro forma operating
  income                 3,713          3,560       16,600        4,887

Margin %                  4.0%           3.8%         5.8%         1.7%

Operating  revenues  decreased  in both periods of 2002 versus 2001 due to lower
small appliance revenues offset by higher sales of specialty exercise equipment.
Operating income and margins  increased due to cost improvements in the exercise
equipment  and  Florida  Tile  businesses  offset  by lower  income in the small
appliance businesses.

LIQUIDITY AND CAPITAL RESOURCES

Summarized cash flow information was as follows:

(In Thousands)
                                          Three Months Ended   Nine Months Ended
                                            September 30         September 30
                                          ------------------  ------------------
                                            2002      2001      2002      2001
                                          --------  --------  --------  --------

Net cash provided by operating activities $379,958  $403,104  $944,144  $921,396
Plus: Proceeds from investments             21,159    20,399    49,329    67,536
Less: Additions to plant and equipment     (59,840)  (58,028) (192,547) (193,420)
                                          --------  --------  --------  --------
Free operating cash flow                  $341,277  $365,475  $800,926  $795,512
                                          ========  ========  ========  ========

Acquisitions                              $(13,732)$(226,846)$(105,715)$(535,334)
Purchase of investments                    (15,378)  (53,820) (190,812)  (77,639)
Cash dividends paid                        (67,403)  (60,899) (201,839) (182,140)
Net proceeds (repayments) of debt          (58,830)   13,954    16,467       235
Other, net                                  49,148    14,531   119,170    77,384
                                          --------  --------  --------  --------
Net increase in cash and equivalents      $235,082   $52,395  $438,197   $78,018
                                          ========  ========  ========  ========

Return on average invested capital was as follows:

(Dollars in Thousands)
                                      Three Months Ended    Nine Months Ended
                                        September 30         September 30
                                      -------------------  --------------------
                                        2002       2001       2002       2001
                                      --------   --------   --------   --------
Pro forma operating income
after taxes                           $258,008   $225,212   $738,298   $690,677
                                      ========   ========   ========   ========

Invested capital at end of period:
Total debt                          $1,607,470 $1,964,502 $1,607,470  $1,964,502
Less: Leasing and investment debt     (795,529)  (819,999)  (795,529)   (819,999)
Less: Cash                            (720,421)  (229,313)  (720,421)   (229,313)
                                     ---------  ---------  ---------   ---------
Adjusted net debt                       91,520    915,190     91,520     915,190
Total stockholders' equity           6,498,240  5,890,841  6,498,240   5,890,841
                                     ---------  ---------  ---------   ---------
Invested capital                    $6,589,760 $6,806,031 $6,589,760  $6,806,031
                                    ========== ========== ==========  ==========

Average invested capital            $6,604,859 $6,749,155 $6,610,980  $6,610,876
                                    ========== ========== ==========  ==========

Return on average invested capital       15.6%      13.3%      14.9%       13.9%
                                         =====      =====      =====       =====

Net working capital at September 30, 2002 and December 31, 2001 is summarized as
follows:

(Dollars in Thousands)
                               Sept. 30,      Dec. 31,      Increase/
                                 2002           2001       (Decrease)
                              ----------     ----------    ----------

Current Assets:
  Cash and equivalents         $720,421      $282,224       $438,197
  Trade receivables           1,574,888     1,450,029        124,859
  Inventories                   981,949       994,156        (12,207)
  Other                         330,828       336,654         (5,826)
  Net current assets of
  discontinued operations        99,248       100,181           (933)
                             ----------    ----------     ----------
                              3,707,334     3,163,244        544,090
                             ----------    ----------     ----------
Current Liabilities:
  Short-term debt               132,804       313,447       (180,643)
  Accounts payable              416,043       367,249         48,794
  Accrued expenses              847,831       795,210         52,621
  Other                         122,201       100,006         22,195
                             ----------    ----------     ----------
                              1,518,879     1,575,912        (57,033)
                             ----------    ----------     ----------

Net Working Capital          $2,188,455    $1,587,332       $601,123
                             ==========    ==========     ==========

Current Ratio                                    2.44           2.01
                                                 ====           ====

Accounts  receivable  increased as a result of higher sales in the third quarter
of 2002 versus the fourth quarter of 2001.

Accounts  payable  has  increased  as a result of the timing of  payments in the
third  quarter  of 2002  versus  the  fourth  quarter  of 2001 and the effect of
foreign currency translation.  The increase in accrued liabilities is the result
of increases from foreign currency translation,  increased warranty reserves and
various timing differences.

Total debt at September 30, 2002 and December 31, 2001 was as follows:

(Dollars in Thousands)
                                                Sept. 30,     Dec. 31,
                                                  2002          2001
                                               ----------    ----------

Short-term debt                                  $132,804      $313,447
Long-term debt                                  1,474,666     1,267,141
                                               ----------    ----------
Total debt                                     $1,607,470    $1,580,588
                                               ==========    ==========

Total debt to capitalization                        19.8%         20.7%
Total debt to capitalization
  (excluding Leasing and Investment segment)        12.0%         13.1%

In  April  2002,  a  subsidiary  of the  Company  issued  $250,000,000  of 6.55%
preferred debt  securities  due December 31, 2011 at 99.849% of face value.  The
proceeds have been used for general corporate purposes.

The changes to stockholders' equity during 2002 were as follows:

(In Thousands)

Total stockholders' equity, December 31, 2001          $6,040,738
Income from continuing operations                         703,877
Income from discontinued operations                         7,617
Cumulative effect of change in accounting principle      (221,890)
Cash dividends declared                                  (205,236)
Exercise of stock options                                  41,073
Currency translation adjustments                          132,061
                                                      -----------
Total stockholders' equity, September 30, 2002         $6,498,240
                                                      ===========

FORWARD-LOOKING STATEMENTS

This  document  contains  forward-looking  statements  within the meaning of the
Private Securities  Litigation Reform Act of 1995, including without limitation,
statements  regarding the divestiture of the Consumer  Products  segment in 2002
and the estimated residual value of leased assets.  These statements are subject
to certain  risks,  uncertainties,  and other  factors  which could cause actual
results  to  differ  materially  from  those  anticipated,   including,  without
limitation,  the risks described  herein.  Important  factors that may influence
future results include (1) a downturn in the construction,  automotive,  general
industrial,  food retail and service, or real estate markets,  (2) deterioration
in global and domestic business and economic  conditions,  particularly in North
America,  European  Community,  and  Australia,  (3) the  unfavorable  impact of
foreign  currency  fluctuations,  (4)  an  interruption  in,  or  reduction  in,
introducing  new  products  into  the  Company's   product  lines,  and  (5)  an
unfavorable  environment for making  acquisitions or dispositions,  domestic and
international,  including  adverse  accounting  or regulatory  requirements  and
market values of candidates.

Item 4 - Controls and Procedures

Based on their most recent evaluation, which was completed within 90 days of the
filing of this Form 10-Q, the Company's Chairman and Chief Executive Officer and
Senior  Vice  President  and  Chief  Financial  Officer  believe  the  Company's
disclosure  controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) are effective in timely  alerting the  Company's  management to material
information  required to be included  in this Form 10-Q and other  Exchange  Act
filings.

There were no significant  changes in the company's  internal  controls or other
factors that could significantly affect these controls subsequent to the date of
their  evaluation  and  there  were  no  significant  deficiencies  or  material
weaknesses which required corrective actions.

Part II - Other Information

Item 6 - Exhibits and Reports on Form 8-K

(a)  Exhibit Index

Exhibit No.   Description

10(a)         ITW Nonqualified Pension Benefits Plan, as amended effective
              January 1, 2002.

99(a)         Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002.

(b)  Reports on Form 8-K

No reports on Form 8-K have been filed  during the quarter for which this report
is filed.



                                SIGNATURES

Pursuant  to the  requirements  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.




                            ILLINOIS TOOL WORKS INC.





Dated: November 1, 2002             By:/s/ Jon C. Kinney
       ----------------                ------------------------------------
                                       Jon C. Kinney, Senior Vice President
                                       and Chief Financial Officer



                                 CERTIFICATIONS

                  Certification of Principal Executive Officer


I, W. James Farrell, Chairman and Chief Executive Officer, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of Illinois Tool Works
Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;

b)   evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     quarterly report (the "Evaluation Date"); and

c)   presented in this quarterly report our conclusions  about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
the  registrant's  board of  directors  (or persons  performing  the  equivalent
function):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officer  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.




Dated: November 1, 2002         /s/ W. James Farrell
       ----------------         ------------------------------------
                                W. James Farrell
                                Chairman and Chief Executive Officer


                  Certification of Principal Financial Officer

I, Jon C. Kinney, Chief Financial Officer, certify that:

1. I have  reviewed  this  quarterly  report on Form 10-Q of Illinois Tool Works
Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officer  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)   designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;

b)   evaluated the  effectiveness  of the registrant's  disclosure  controls and
     procedures  as of a date  within 90 days prior to the  filing  date of this
     quarterly report (the "Evaluation Date"); and

c)   presented in this quarterly report our conclusions  about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
the  registrant's  board of  directors  (or persons  performing  the  equivalent
function):

a)   all  significant  deficiencies  in the  design  or  operation  of  internal
     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

b)   any fraud,  whether or not  material,  that  involves  management  or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and

6. The  registrant's  other  certifying  officer  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.




Dated: November 1, 2002              /s/ Jon C. Kinney
       ----------------              ------------------------------------
                                     Jon C. Kinney, Senior Vice President
                                     and Chief Financial Officer

EX-10

                                                                   EXHIBIT 10(a)

                     ITW NONQUALIFIED PENSION BENEFITS PLAN
                            Effective January 1, 2002

The ITW Nonqualified  Pension Benefits Plan, as adopted  effective January 1,
2002, is an amendment and restatement of The Supplemental  Plan for Employees of
Illinois  Tool Works  Inc.  adopted  effective  January  1,  1976,  and  amended
effective January 1, 1989. The Plan is intended to provide  additional  benefits
to certain  employees whose benefits under the ITW Retirement  Accumulation Plan
are limited by the  Internal  Revenue  Code and  reduced due to their  deferrals
under the Illinois  Tool Works Inc.  Executive  Contributory  Retirement  Income
Plan.
                                    ARTICLE I
                                   DEFINITIONS

     1.1 Actuarial Equivalent  means an equivalent form of payment of a
Participant's  Supplemental  Benefit.  For purposes of converting a Supplemental
Benefit  to a form of  payment  offered  under  the  Qualified  Plan,  Actuarial
Equivalent will be determined using the Qualified Plan's definition of Actuarial
Equivalent.  Notwithstanding  the  foregoing,  in  determining  any  lump sum or
installment  payments under Section 4.2, the Supplemental Benefit in the form of
a single life annuity (either payable as of the  Participant's  Annuity Starting
Date or deferred  pursuant  to Section  4.1(e) of the  Qualified  Plan) shall be
valued using the greater of the  interest  rate under  Section  2.1(c)(1) of the
Qualified  Plan  or  120%  of the  monthly  Long-Term  Applicable  Federal  Rate
(determined  for the  look-back  month and  stability  period  described  in the
Qualified Plan) for purposes of Code Section 1274.

     1.2 Beneficiary  means the person or persons  entitled to a benefit
under the Qualified Plan or an Other Plan upon the death of a Participant  prior
to his or her Retirement.

     1.3 Board means the Board of Directors of the Company.

     1.4 CEO means the chief executive officer of the Company.

     1.5 Code means the Internal Revenue Code of 1986, as amended.

     1.6 Company means Illinois Tool Works Inc., a Delaware  corporation,
and any successor  thereto,  and any  corporation  or other entity that together
with Illinois Tool Works Inc. is a member of a controlled  group of corporations
under  Code  Section  414(b)  or a group of trades or  businesses  under  common
control pursuant to Code Section 414(c).

     1.7 Committee means the Compensation Committee of the Board.

     1.8 Corporate  Change  shall  have the same  meaning  as under  the
Illinois Tool Works Inc. 1996 Stock Incentive Plan or any successor thereto.

     1.9 ECRIP means the Illinois Tool Works Inc. Executive  Contributory
Retirement  Income  Plan,  as amended  January  1,  1999,  and from time to time
thereafter.

     1.10 Eligible Employee  means (1) any participant in the ECRIP, (2)
any Company employee entitled to certain benefits under the Premark Supplemental
Plan,  to the  extent  of any  Supplemental  Benefit  which is based on  service
through  December 31,  2000,  unless such person is an Eligible  Employee  under
either (1) or (3), and (3) any other Company employee who is eligible to receive
a  Retirement  Benefit,  the  amount  of  which  is  reduced  by  reason  of the
limitations on compensation  under Code Section  401(a)(17) or on benefits under
Code  Section  415(b)  and  who is  designated  as a  Participant  by  the  CEO.
Notwithstanding  the  foregoing,  an Eligible  Employee shall only be considered
such if he or she is part of a select group of management and highly compensated
employees  within the  meaning of Sections  201,  301,  and 401 of the  Employee
Retirement Income Security Act of 1974, as amended ("ERISA").

     1.11 Other Plan means  to the  extent  such plan  would  apply to a
Participant hereunder,  any plan or agreement that would be considered a defined
benefit  pension plan under Code Section 414(j)  regardless of whether such plan
or agreement constitutes a retirement plan under ERISA or a qualified plan under
Code  Section  401(a);  provided,  however,  that the term "Other Plan" does not
include this Plan, the Premark  Supplemental  Plan, the Qualified Plan, the 1982
Executive  Contributory  Retirement Income Plan, the 1985 Executive Contributory
Retirement Income Plan and ECRIP.

     1.12 Pre-Retirement Death Benefit  means the single life  annuity
Actuarial  Equivalent  of the  aggregate  benefits  payable  to the  Beneficiary
(including  the value of plan  benefits  payable to an  alternate  payee under a
qualified domestic  relations order) of a Participant  pursuant to the Qualified
Plan and any Other Plans upon the death of the  Participant  prior to his or her
Retirement.

     1.13 Participant  means  any  Eligible  Employee,  and  any  former
Eligible  Employee  to whom or with  respect to whom a  Supplemental  Benefit is
payable.

     1.14 Plan means the ITW Nonqualified Pension Benefits Plan.

     1.15 Qualified Plan means the ITW Retirement  Accumulation Plan as
amended from time to time.

     1.16 Retirement  means the Participant's Annuity Starting Date under
the Qualified Plan or any Other Plan.

     1.17 Retirement Benefit means the aggregate  benefits payable to a
Participant in the form of a single life annuity  pursuant to the Qualified Plan
and any Other Plans by reason of his or her  termination of employment  with the
Company for any reason  other than death.  A  Participant's  Retirement  Benefit
shall  include the value of any benefits  paid or payable to an alternate  payee
pursuant to a qualified  domestic  relations order with respect to the Qualified
Plan or any Other Plan.

     1.18 Supplemental Benefit means the benefit payable to a Participant
or his or her Beneficiary pursuant to Article III of the Plan.

                                   ARTICLE II
                                  PARTICIPATION


     2.1 General.  An employee of the Company shall become a Participant
as of the date on which he or she becomes an Eligible Employee.

     2.2 Corporate Change, Death or Disability.  As of the date of a
Corporate  Change,  any  Eligible  Employee  who has not  been  designated  as a
Participant   pursuant  to  Section   1.10(3)  shall   automatically   become  a
Participant.  If an  Eligible  Employee  dies  or is  permanently  disabled  (as
determined  pursuant to the  Qualified  Plan) and has not been  designated  as a
Participant  pursuant to Section 1.10(3), the CEO may determine that such person
shall be considered a Participant as of the date of such death or disability.

     2.3 Termination of Participation.  Prior to a Corporate Change, the
CEO may determine  that an individual  who has been  designated as a Participant
shall  cease to  participate  herein.  Upon  ceasing to be a  Participant,  such
individual  shall not be entitled to a Supplemental  Benefit.  In the event of a
Corporate Change,  each Participant or Beneficiary shall continue to be entitled
to and receive any Supplemental Benefit the payment of which has commenced prior
thereto,  and each other  Participant  shall continue to participate in the Plan
and to be entitled to a Supplemental  Benefit  determined under the terms of the
Plan as in effect on the day immediately preceding the Corporate Change.

                                   ARTICLE III
                              SUPPLEMENTAL BENEFITS

     3.1 Supplemental Benefits.   Upon  Retirement,   a  Participant's
Supplemental  Benefit  shall  be  determined  by  offsetting  his or her  actual
Retirement  Benefit against a hypothetical  Retirement  Benefit calculated under
the then-applicable  provisions of the Qualified Plan and Other Plans, including
all benefit formulas,  service credit, early retirement  adjustments,  actuarial
factors and other calculation  methods under any such Plan but not any limits on
benefits and  compensation  under Code Sections 415 and  401(a)(17),  and adding
back to the Participant's compensation any ECRIP deferrals.  Notwithstanding the
foregoing, prior to a Corporate Change:

     (a)  a  Participant's  compensation  and ECRIP  deferrals  in excess of the
          then-current  Section  401(a)(17)  limit and benefits in excess of the
          applicable limit under Code Section 415(b) shall be considered only if
          approved  by the CEO;  provided  that,  in any case,  a  Participant's
          Supplemental  Benefit shall be no less than the benefit to which he or
          she was entitled under the Premark  Supplemental Plan based on service
          through December 31, 2000.

     (b)  the  CEO  may  provide  for  such   adjustments   in   determining   a
          Participant's  Supplemental Benefit,  including additional service and
          compensation credits, as he shall deem appropriate.

     3.2 Supplemental Pre-Retirement Death Benefits.  If a Participant
dies prior to his or her Retirement,  then his or her Beneficiary's Supplemental
Benefit shall be based on the Pre-Retirement  Death Benefit determined under the
then-applicable  provisions of the Qualified Plan and Other Plans,  applying all
benefit  formulas,  service  credit,  early  retirement  adjustments,  actuarial
factors and other calculation methods under the applicable Plan but ignoring the
limits of Code  Sections  415(b) and  401(a)(17)  (subject  to Section  3.1(a)),
including  any  adjustments   under  Section  3.1(b)  and  adding  back  to  the
Participant's  compensation  any deferrals made by the  Participant  pursuant to
ECRIP.  The actual  Pre-Retirement  Death Benefit to be paid to the  Beneficiary
under the  Qualified  Plan and Other Plans shall offset the amount so determined
and the resulting net amount shall be the  Supplemental  Benefit  payable to the
Beneficiary.

     3.3 Subsequent Changes in Benefit Amounts.  If the  amount of a
Participant's  Retirement  Benefit or a  Pre-Retirement  Death  Benefit  changes
following the initial  benefit  determination  pursuant to this Article III, the
amount of the Participant’s or Beneficiary's  Supplemental Benefit shall be
redetermined and payable in such redetermined amount from and after the date the
original Retirement Benefit or Pre-Retirement Death Benefit is payable.

                                   ARTICLE IV
                               PAYMENT of Benefits

     4.1 Commencement of Benefits.  A Participant's  Supplemental Benefit
under  Section  3.1 shall  commence  as of the date on which  the  Participant's
Retirement   Benefit  under  the  Qualified  Plan  commences.   A  Beneficiary's
Supplemental  Benefit under  Section 3.2 shall  commence as of the date on which
the Pre-Retirement Death Benefit commences.

     4.2 Form of Payment. Notwithstanding anything in this Section 4.2 to
the  contrary,  if the  lump  sum  Actuarial  Equivalent  of  the  Participant's
Supplemental  Benefit is $25,000 or less on the  Participant's  Retirement Date,
such amount shall be paid to the  Participant  in full  settlement of his or her
benefits under this Plan.

     Effective  December 1, 2002,  a  Participant  who is at least age 55 at the
time of his or her  termination of employment with the Company and has completed
at least 10 years of Vesting Service or has reached his or her Normal Retirement
Date at such  termination  of  employment  (as those  terms are  defined  in the
Qualified Plan) may elect to receive his or her Supplemental Benefit in any form
of payment  permitted  under the  Qualified  Plan (other  than the level  income
option)  or in the form of a lump sum or  monthly  installment  payments  over a
fixed number of years not exceeding 20, where such payment form is the Actuarial
Equivalent of the Participant's  Supplemental  Benefit. In order to make such an
election,  the Participant  must file a form provided by the Company at least 13
months prior to his or her anticipated  Retirement  (such election to be void if
the  Participant's  actual  Retirement  occurs  within the following 13 months).
Notwithstanding  the  foregoing,  any such  election made prior to June 1, 2002,
shall be  effective  as of any  Retirement  date at least six months  after such
election (such election to be void if the Participant's actual Retirement occurs
within the following six months).  If a Participant does not make an election or
his or her election is deemed void and there is no valid prior election,  his or
her  Supplemental  Benefit  will be paid in  accordance  with the  Participant's
applicable ECRIP payment election or, if there is no such ECRIP election, in the
form of payment selected by the CEO.

     A  Participant  who had not attained age 55 and completed at least 10 years
of Vesting  Service  requirements  set forth in the  preceding  paragraph  shall
receive a lump sum payment in full satisfaction of such Participant's rights and
benefits  under the plan.  If the  Participant  dies before  payments  commence,
payments to his or her Beneficiary  shall be in the form in which payments would
have been made pursuant to this Section 4.2 had the Participant  survived to the
commencement  date  of his  or her  Supplemental  Benefit.  Notwithstanding  the
foregoing,  if the CEO in his  sole  discretion  determines  that,  in  order to
protect the Company's interests pursuant to Section 4.4,  Supplemental  Benefits
should be paid over a longer period than that elected by a  Participant,  he may
establish a form of payment,  which shall  supersede any prior  elections by the
Participant.

     Prior to  December  1, 2002,  the form of payment  shall be the same as the
form selected under the Qualified Plan except that, if the Participant  elects a
lump sum  distribution  from the  Qualified  Plan,  his or her benefit  shall be
payable  in one of the forms of annuity  (other  than the level  income  option)
available under the Qualified Plan as determined by the CEO.

     4.3 Domestic Relations Order.  If a court order is issued that is
intended to divide a Participant's  Supplemental Benefit between the Participant
and his or her  spouse,  such order  shall be  applied  if all of the  following
conditions are met:

     (a)  a separate  qualified  domestic  relations  order with  respect to the
          Participant's   Retirement  Benefit  has  been  recognized  under  the
          Qualified Plan;

     (b)  the order clearly specifies the manner for determining a former spouse's
          share of the Participant's Supplemental Benefit; and

     (c)  the order does not  provide  for the  commencement  of  benefits  to the
          former   spouse  prior  to  the  time  benefits  are  payable  to  the
          Participant (or, if the Participant  should die, to the  Participant's
          Beneficiary)  and does not provide any  guarantees  or recourse in the
          event the Committee or the CEO suspends or forfeits  benefit  payments
          to the  Participant  or his or her  Beneficiary  under  Section 4.4 or
          otherwise modifies their Supplemental Benefit.

     Payments  pursuant  to such an order  shall be made only to the extent that
payment of the Participant's or Beneficiary's Supplemental Benefit has commenced
and shall reduce the Participant's or Beneficiary's Supplemental Benefit.

     4.4 Suspension or Forfeiture of Supplemental Benefits.  If, prior to
a Corporate  Change, a Participant shall be discharged for gross misconduct or a
Participant or his or her Beneficiary  shall at any time,  regardless of whether
before  or  after  the   Participant's   termination  of   employment,   divulge
confidential  Company  information to other persons or otherwise act against the
business  interests  of the Company,  then the  Participant's  or  Beneficiary's
Supplemental  Benefit attributable to compensation in excess of the Code Section
401(a)(17) limit may be suspended or forfeited by the Committee or the CEO.

                                    ARTICLE V
                                CLAIMS PROCEDURE

     5.1 Claim for Benefits.  Any claim for benefits under the Plan shall
be made in writing to the Company.  If the Company  wholly or  partially  denies
such claim, he shall,  within a reasonable period of time, but not later than 60
days after receipt of the claim, notify the claimant of the denial of the claim.
Such notice of denial shall be in writing and shall contain:

     (a)  the specific reason or reasons for denial of the claim;

     (b)  a reference to the relevant Plan  provisions  upon which the denial is
          based;

     (c)  a description of any additional material or information  necessary for
          the claimant to perfect the claim, together with an explanation of why
          such material or information is necessary; and

     (d)  an explanation of the Plan's claim review procedure.

     If no such notice is provided, the claim shall be deemed denied.

     5.2 Request for Review of a Denial of a Claim for Benefits. Upon the
receipt by the claimant of written  notice of denial of the claim,  the claimant
may within 90 days file a written request to the CEO, requesting a review of the
denial of the claim, which review shall include a hearing if deemed necessary by
the CEO. In connection  with the  claimant's  appeal of the denial of his or her
claim,  he or she may  review  relevant  documents  and may  submit  issues  and
comments in writing.

     5.3 Decision Upon Review of Denial of Claim for Benefits.  The CEO
shall render a decision on the claim review  promptly,  but no more than 60 days
after  the  receipt  of  the  claimant's  request  for  review,  unless  special
circumstances (such as the need to hold a hearing) require an extension of time,
in which case the 60-day  period  shall be extended to 120 days.  Such  decision
shall:

     (a)  include specific reasons for the decision;

     (b)  be written in a manner  calculated  to be  understood by the claimant;
          and

     (c)  contain specific references to the relevant Plan provisions upon which
          the decision is based.

     The  CEO's  decision  shall be final and  binding  in all  respects  on the
Company and the claimant.

                                   ARTICLE VI
                                 ADMINISTRATION

     6.1 General.  The Company,  which shall  administer the Plan, shall
have the following powers and duties:

     (a)  to adopt such rules and regulations consistent with Plan terms;

     (b)  to administer the Plan in accordance with its terms and such rules and
          regulations;

     (c)  to maintain  records  concerning  the Plan  sufficient  to prepare any
          necessary reports, returns and other information;

     (d)  to construe and interpret  the Plan and resolve all questions  arising
          under the Plan;

     (e)  to direct the payment of Supplemental Benefits; and

     (f)  to comply with the  requirements  of any  applicable  Federal or State
          law.

     6.2 Information to be Furnished. The records of the Company shall be
determinative of each Participant's  service,  compensation and other employment
and personal data.  Each  Participant  (or  Beneficiary,  as  applicable)  shall
furnish  such data or  information  and execute  such  documents  as the Company
requests.

     6.3 Responsibility. Neither the Company, nor any Company employee or
Board  member  shall be  liable  to any  Eligible  Employee,  active  or  former
Participant,  Beneficiary or any other person for any claim, loss,  liability or
expense incurred in connection with the Plan.

                                   ARTICLE VII
                            AMENDMENT AND TERMINATION

     7.1 Amendment and Termination.  The Committee or the Board may amend
the  Plan in  whole or in part at any  time.  The  Committee  or the  Board  may
terminate the Plan at any time prior to a Corporate Change.

     7.2 No Reduction in Benefits.  No amendment or  termination of the
Plan shall,  without  the express  written  consent of the  affected  current or
former Participant or Beneficiary,  reduce or alter any benefit  entitlement (as
defined below) of such  Participant or Beneficiary.  The benefit  entitlement of
any Participant or Beneficiary  whose  Supplemental  Benefit payments shall have
commenced on a date prior to or coincident  with the date of a Plan  termination
or amendment shall be the amount and form of payment  hereunder in effect at the
time of such  termination  or amendment.  The benefit  entitlement  of any other
Participant or Beneficiary  shall be the benefit that would be payable hereunder
as a  single  life  annuity  if  payment  of his or her  Retirement  Benefit  or
Pre-Retirement  Death Benefit were to commence on the date of a Plan termination
or amendment.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     8.1 Corporate Successor.  The  Plan  shall  not  be  automatically
terminated  by  a  transfer  or  sale  of  assets  of  the  Company  or  by  the
reorganization,  merger or  consolidation  of the Company into or with any other
corporation  or  other  entity,  but the  Plan  shall be  continued  after  such
transfer, sale,  reorganization,  merger or consolidation to the extent that the
transferee,  purchaser or successor  entity  agrees to continue the Plan. In the
event that the transferee,  purchaser or successor  entity does not continue the
Plan, then the Plan shall terminate subject to the provisions of Section 7.2.

     8.2 No Implied Rights. Neither the establishment of the Plan nor any
amendment  thereof  shall be  construed as giving any  Participant  or any other
person any legal or  equitable  right  unless such right  shall be  specifically
provided  for in the Plan or  conferred  by  specific  action of the  Company in
accordance  with the  terms and  provisions  of the  Plan.  Except as  expressly
provided in this Plan,  the  Company  shall not be required or be liable to make
any payment under the Plan.

     8.3 No Right to Company Assets.  Neither the  Participant  nor any
other  person  shall  acquire by reason of the Plan any right in or title to any
assets,  funds or property of the Company  including,  without  limitation,  any
specific  funds,  assets  or  other  property  that  the  Company,  in its  sole
discretion, may set aside in anticipation of a liability hereunder. Any benefits
that  become  payable  hereunder  shall be paid from the  general  assets of the
Company.  The Participant shall have only a contractual right to the amounts, if
any, payable hereunder unsecured by any asset of the Company.  Nothing contained
in the Plan  constitutes  a  guarantee  by the  Company  that the  assets of the
Company shall be sufficient to pay any benefit to any person.

     In order to provide for the payment of Supplemental  Benefits,  the Company
has  established  an  irrevocable  trust,  the  assets  of which are part of the
Company's  general  assets and therefore  subject to the claims of the Company's
general  creditors in the event of  insolvency.  To the extent any  Supplemental
Benefit is paid from the trust, the Company shall have no further obligations to
pay such benefit directly to the Participant or Beneficiary.

     8.4 No Employment Rights. Nothing herein shall constitute a contract
of employment or of continuing  service or in any manner obligate the Company to
continue the services of the Participant or obligate the Participant to continue
in the service of the Company or as a limitation  of the right of the Company to
discharge any of its employees, with or without cause.

     8.5 Offset.  If, at the time payments are to be made hereunder to a
Participant or  Beneficiary,  he or she is indebted or obligated to the Company,
then such payments may at the discretion of the Company be reduced by the amount
of such indebtedness or obligation;  provided,  however, that an election by the
Company not to reduce any such payment or payments shall not constitute a waiver
of its claim for such indebtedness or obligation. The decision of the CEO not to
provide the portion of the  Supplemental  Benefit  described  in Section  3.1(a)
shall not be deemed to be an offset to such  indebtedness or obligation.  In the
event of an  overpayment of benefits under the Qualified Plan or any Other Plan,
the Company may determine that all or part of the amount of the  overpayment may
be recovered by an offset to the  Participant's  or  Beneficiary's  Supplemental
Benefit.

     8.6 Non-Assignability.  Except as provided in Section 4.3,  neither
the  Participant  nor any other person shall have any  voluntary or  involuntary
right to commute,  sell,  assign,  pledge,  anticipate,  mortgage  or  otherwise
encumber,  transfer,  hypothecate  or convey any amounts  payable  hereunder  in
advance of actual  receipt  thereof.  No part of the amounts  payable  shall be,
prior to actual payment,  subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by the Participant or
any other  person,  or be  transferable  by operation of law in the event of the
Participant's or any other person’s bankruptcy or insolvency.

     8.7 Incapacity of Recipient.  If a former Participant or Beneficiary
is  deemed  by  the  Company  to  be  incapable  of  personally   receiving  any
Supplemental  Benefit payment,  then, unless and until claim therefor shall have
been made by a duly  appointed  guardian or other legal  representative  of such
person,  the Company may provide for such payment or any part thereof to be made
to any other person or  institution  providing for the care and  maintenance  of
such person.  Any such payment shall be for the account of such person and shall
be a complete discharge of any liability of the Company and the Plan therefor.

     8.8 Notice.  Any notice required or permitted to be given under the
Plan shall be sufficient if in writing and hand delivered, or sent by registered
or  certified  mail (or by  facsimile  if  followed  by a copy  thereof  sent by
registered  or certified  mail),  and if given to the Company,  delivered to the
principal  office of the  Company,  directed to the  attention  of an  executive
officer of the  Company.  Such  notice  shall be deemed  given as of the date of
delivery,  or if delivery by mail,  as of the date shown on the  postmark or the
receipt for registration or  certification,  or if delivery by facsimile,  as of
the date  printed by the  facsimile  machine  on the notice or any  accompanying
confirmation.

     8.9 Withholding of Taxes.  The Company may  withhold any Federal,
state  or  local  taxes   applicable  to  any   Participant's  or  Beneficiary's
Supplemental Benefit.

     8.10 Governing  Laws.  The Plan shall be construed and administered
according to the laws of the State of Illinois.



ILLINOIS TOOL WORKS INC.



By: /s/ W. James Farrell                                  Date: June 5, 2002
    -------------------------------------                       ------------
    Chairman and Chief Executive Officer

EX-99

                                                                   EXHIBIT 99(a)


     Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     -----------------------------------------------------------------------


The following  statement is being made to the Securities and Exchange Commission
solely for purposes of Section 906 of the  Sarbanes-Oxley Act of 2002 (18 U.S.C.
1349),  which  carries  with it  certain  criminal  penalties  in the event of a
knowing or willful misrepresentation.

Each of the undersigned  hereby certifies that the Quarterly Report on Form 10-Q
for the period ended September 30, 2002 fully complies with the  requirements of
Section 13(a) of the  Securities  Exchange Act of 1934 and that the  information
contained  in  such  report  fairly  presents,  in all  material  respects,  the
financial condition and results of operations of the registrant.




Dated: November 1, 2002     /s/ W. James Farrell
       ----------------     -------------------------------------------
                             W. James Farrell
                             Chairman and Chief Executive Officer




Dated: November 1, 2002     /s/ Jon C. Kinney
       ----------------     -------------------------------------------
                             Jon C. Kinney, Senior Vice President
                             and Chief Financial Officer