UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): October 26, 2007
ITT
Corporation
(Exact
name of registrant as specified in its charter)
|
Indiana
|
1-5672
|
13-5158950
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
|
4
West Red Oak Lane
White
Plains, New York
|
10604
|
|
(Address
of principal
executive
offices)
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (914) 641-2000
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (See General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item 2.02 Results of Operations and Financial Condition
Item
7.01 Regulation
FD Disclosure
Attached
hereto as Exhibit 99.1 and incorporated by reference herein is information
on
the results of operations for ITT Corporation for the third quarter 2007, the
Company’s increased fiscal year 2007 earnings per share from continuing
operations and revenue guidance and other forward-looking statements relating
to
2007 as presented in a press release dated October 26, 2007. This information
shall not be deemed filed for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into
any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such filing.
A
copy of
this press release is attached and incorporated by reference herein as Exhibit
99.1.
Item
9.01. Financial
Statements and Exhibits
(c)
Exhibits
99.1
Press release dated October 26, 2007.
2
SIGNATURE
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 hereunto
duly authorized.
|
ITT
CORPORATION
|
||
|
By:
|
/s/
Kathleen S. Stolar
|
|
|
Kathleen
S. Stolar
|
||
|
Its:
|
Vice
President, Secretary
and
Associate General Counsel
|
|
|
Date:
October 26, 2007
|
||
3
 |
ITT
Corporation, Inc.
tel
914
641 2000
fax
914
696 2977
|
|
Press
Release
HOLD
FOR RELEASE AT 7:00 AM EDT, OCT. 26, 2007
|
Andy
Hilton
914-641-2160
andy.hilton@itt.com
ITT
reports strong third quarter earnings of 92 cents per share from continuing
operations, raises full-year guidance
|
·
|
Earnings
per share from continuing operations up 19 percent, excluding special
items, on strong international sales and improved
margins
|
|
·
|
Portfolio
realignment continues with completed purchase of International Motion
Control and announced acquisition of EDO Corp.
|
|
·
|
Discontinued
operations contribute 33 cents to total EPS of $1.25, primarily from
gain
on Switches sale
|
|
·
|
ITT
raises full-year 2007 adjusted earnings guidance to $3.50-$3.53 per
share
|
WHITE
PLAINS, N.Y., October 26, 2007
- ITT
Corporation (NYSE: ITT) today reported third quarter 2007 earnings from
continuing operations of $169 million or 92 cents per share, on revenue of
$2.2
billion, driven by balanced top-line growth across most business segments and
customer end-markets. Special item offsets in the quarter resulted in adjusted
earnings equal to the reported 92 cents per share earnings. ITT’s adjusted
earnings, which increased 19 percent over the comparable quarter a year earlier,
also benefited from strong international sales and margin improvements generated
by productivity initiatives, including the continued adoption of lean
manufacturing processes. In addition, ITT recognized a $64 million gain from
the
sale of its Switches business, which was announced in July. The gain and other
discontinued operations contributed 33 cents per share to ITT’s total reported
earnings of $1.25 per share.
As
a
result of its continued strong performance, ITT is raising its full-year 2007
earnings per share guidance, excluding special items, to $3.50-$3.53 on
projected revenue of $8.75 billion.
“This
was
an exciting quarter for our business, marked by a number of major strategic
portfolio moves and transforming customer wins,” said Steve Loranger, chairman,
president and chief executive officer, ITT Corp. “Through it all, our teams have
remained focused on our operating plan and on continuous improvement
initiatives, resulting in high-quality results for our shareholders again this
quarter.”
On September 17, ITT announced an agreement to acquire EDO Corp. (NYSE: EDO) for $56 per share pending satisfaction of customary closing conditions, including EDO shareholder approval. EDO operates in markets complementary to ITT’s defense business and is a leading producer of advanced technologies serving military and commercial customers. The acquisition, if approved, would be ITT’s largest since becoming an independent company in 1995.
Also
during the quarter, ITT completed the acquisition and began the integration
of
International Motion Control (IMC), a global leader in the design and
manufacture of standard and customized energy absorption, control
systems, and hydraulic and pneumatic components.
Loranger
noted, “These strategic portfolio moves are enabled by the strong overall
performance of our business and are expected to position ITT for continued
growth in the future. These significant actions, in addition to the smaller
acquisitions we’ve announced, demonstrate our disciplined approach to creating
value for our shareholders by expanding from our strong core businesses and
entering attractive adjacent markets.”
Primary
Business Highlights
Defense
Electronics & Services
|
·
|
The
Defense segment reported third quarter revenues of $1.01 billion,
representing six percent growth over the same quarter in 2006. Growth
in
the segment was led by ITT’s services businesses, including Advanced
Engineering & Sciences, which recorded revenue growth of 37 percent,
and Systems, up 16 percent. On the product side, ITT’s Night Vision
business also grew 16 percent, while its Aerospace/Communications
Division
and Electronic Systems businesses were essentially flat.
|
|
·
|
Operating
income for the segment grew to $137 million and improved 21 percent
compared to prior year, excluding special items, on strong margin
performance. This operating margin expansion was driven by productivity
gains in ITT’s fixed price contracts for products including SINCGARS
battlefield radios.
|
|
·
|
During
the quarter, the Federal Aviation Administration (FAA) awarded ITT
the
first contract for its air traffic modernization program, known as
Automatic Dependent Surveillance-Broadcast, or ADS-B. ITT brought
together
each of its core defense capabilities to win the contract, which
positions
the company as the prime systems integrator for the next generation
air
traffic control program.
|
Fluid Technology
|
·
|
Third
quarter revenue for the Fluid Technology segment was $858 million,
a 10
percent increase over the comparable quarter last year, including
the
impact of foreign currency exchange.
|
|
·
|
Top-line
growth was led by organic revenue growth of six percent resulting
from
strong international and project sales in the group’s Industrial Process
business.
|
|
·
|
Operating
income for the segment of $111 million, or $117 million excluding
restructuring costs, grew 13 percent on a comparable basis.
|
Motion
& Flow Control
|
·
|
The
Motion & Flow Control segment reported third quarter revenues of $315
million, up 18 percent over the same period last year, including
the
impacts of foreign currency exchange and the integration of IMC.
|
|
·
|
The
segment recorded a nine percent increase in organic revenue in the
quarter, driven in part by 26 percent organic growth at Aerospace
Controls. In addition, sales to commercial original equipment
manufacturers (OEMs) contributed to a strong quarter for Friction
Materials, which was up 14 percent organically.
|
|
·
|
Operating
income for the quarter grew to $44 million. Operating income was
$45
million excluding restructuring, up 24 percent on a comparable basis,
benefiting from volume and cost-saving
initiatives.
|
Investor
Call Today
ITT's
senior management will host a conference call for investors today at 9:00 a.m.
Eastern Daylight Time to review third quarter performance and answer questions.
The briefing can be monitored live via webcast at the following address on
the
company's Web site: www.itt.com/ir.
About
ITT Corporation
ITT
Corporation (www.itt.com)
supplies advanced technology products and services in several growth markets.
ITT is a global leader in water and fluid transport, treatment and control
technology. The company plays a vital role in international security with
communications and electronics products; space surveillance and intelligence
systems; and advanced engineering and services. It also serves a number of
growing markets—including marine, transportation and aerospace—with a wide range
of motion and flow control technologies. Headquartered in White Plains, N.Y.,
the company employs approximately 35,000 people and generated $7.8 billion
in
2006 sales.
"Safe Harbor Statement" under the Private Securities Litigation Reform Act of 1995 ("the Act"):
Certain
material presented herein includes forward-looking statements intended to
qualify for the safe harbor from liability established by the Act. These
forward-looking statements include statements that describe the Company's
business strategy, outlook, objectives, plans, intentions or goals, and any
discussion of future operating or financial performance. Whenever used, words
such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "target" and other terms of similar meaning are intended to identify
such forward-looking statements. Forward-looking statements are uncertain and
to
some extent unpredictable, and involve known and unknown risks, uncertainties
and other important factors that could cause actual results to differ materially
from those expressed in, or implied from, such forward-looking statements.
Factors that could cause results to differ materially from those anticipated
by
the Company include general global economic conditions, decline in consumer
spending, interest and foreign currency exchange rate fluctuations, availability
of commodities, supplies and raw materials, competition, acquisitions or
divestitures, changes in government defense budgets, employment and pension
matters, contingencies related to actual or alleged environmental contamination,
claims and concerns, intellectual property matters, personal injury claims,
governmental investigations, tax obligations, and changes in generally accepted
accounting principles. Other factors are more thoroughly set forth in Item
1.
Business, Item 1A. Risk Factors, and Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Forward-Looking
Statements in the ITT Corporation Annual Report on Form 10-K for the fiscal
year
ended December 31, 2006, and other of its filings with the Securities and
Exchange Commission. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.
ITT
believes that investors' understanding of the Company's operating performance
is
enhanced by the use of certain non-GAAP financial measures, including adjusted
GAAP net income and adjusted GAAP EPS, which Management considers useful in
providing insight into operating performance, as it excludes the impact of
special items that cannot be expected to recur on a quarterly basis. Management
also believes that investors can better analyze the Company's revenue and order
growth by utilizing organic revenue and organic order growth measures that
exclude the effect of foreign exchange translation and the effect of recent
acquisitions. In addition, Management considers the use of free cash flow to
be
an important indication of the Company's ability to make acquisitions, fund
pension obligations, buy back outstanding shares and service debt. Free cash
flow, adjusted net income, adjusted EPS, organic revenue and organic orders
are
not financial measures under GAAP, should not be considered as substitutes
for
cash from operating activities, EPS, net income or revenue as defined by GAAP,
and may not be comparable to similarly titled measures reported by other
companies. A reconciliation to the GAAP equivalents of these non-GAAP measures
is set forth in the attached unaudited financial information.
# # #
ITT
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
CONDENSED INCOME STATEMENTS
(In
millions, except per share)
(Unaudited)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
|
2007
|
2006
|
2007
|
2006
|
|||||||||
|
Sales
and revenues
|
$
|
2,181.2
|
$
|
2,001.1
|
$
|
6,474.6
|
$
|
5,756.6
|
|||||
|
Costs
of sales and revenues
|
1,540.1
|
1,437.8
|
4,606.9
|
4,159.5
|
|||||||||
|
Selling,
general and administrative expenses
|
327.6
|
296.9
|
978.5
|
844.2
|
|||||||||
|
Research
and development expenses
|
46.8
|
41.7
|
129.9
|
119.6
|
|||||||||
|
Restructuring
and asset impairment charges, net
|
7.2
|
9.8
|
31.1
|
32.0
|
|||||||||
|
Total
costs and expenses
|
1,921.7
|
1,786.2
|
5,746.4
|
5,155.3
|
|||||||||
|
Operating
income
|
259.5
|
214.9
|
728.2
|
601.3
|
|||||||||
|
Interest
expense
|
25.8
|
19.4
|
68.7
|
60.8
|
|||||||||
|
Interest
income
|
12.6
|
6.3
|
31.0
|
14.8
|
|||||||||
|
Miscellaneous
expense, net
|
4.6
|
4.1
|
10.6
|
13.6
|
|||||||||
|
Income
from continuing operations before income
taxes
|
241.7
|
197.7
|
679.9
|
541.7
|
|||||||||
|
Income
tax expense
|
73.1
|
57.3
|
175.3
|
163.9
|
|||||||||
|
Income
from continuing operations
|
168.6
|
140.4
|
504.6
|
377.8
|
|||||||||
|
Discontinued
operations, net of tax
|
61.5
|
3.1
|
79.2
|
62.5
|
|||||||||
|
Net
income
|
$
|
230.1
|
$
|
143.5
|
$
|
583.8
|
$
|
440.3
|
|||||
|
Earnings
Per Share:
|
|||||||||||||
|
Income
from continuing operations:
|
|||||||||||||
|
Basic
|
$
|
0.94
|
$
|
0.76
|
$
|
2.79
|
$
|
2.05
|
|||||
|
Diluted
|
$
|
0.92
|
$
|
0.75
|
$
|
2.74
|
$
|
2.02
|
|||||
|
Discontinued
operations:
|
|||||||||||||
|
Basic
|
$
|
0.34
|
$
|
0.02
|
$
|
0.44
|
$
|
0.34
|
|||||
|
Diluted
|
$
|
0.33
|
$
|
0.02
|
$
|
0.43
|
$
|
0.33
|
|||||
|
Net
income:
|
|||||||||||||
|
Basic
|
$
|
1.28
|
$
|
0.78
|
$
|
3.23
|
$
|
2.39
|
|||||
|
Diluted
|
$
|
1.25
|
$
|
0.77
|
$
|
3.17
|
$
|
2.35
|
|||||
|
Average
Common Shares — Basic
|
180.2
|
184.1
|
180.7
|
184.3
|
|||||||||
|
Average
Common Shares — Diluted
|
183.7
|
186.7
|
184.0
|
187.2
|
|||||||||
ITT
CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
CONDENSED BALANCE SHEETS
(In
millions)
(Unaudited)
|
|
September
30,
|
December
31,
|
|||||
|
|
2007
|
2006
|
|||||
|
|
|||||||
|
Assets
|
|||||||
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
1,440.1
|
$
|
937.1
|
|||
|
Receivables,
net
|
1,493.9
|
1,288.9
|
|||||
|
Inventories,
net
|
779.1
|
726.5
|
|||||
|
Assets
of discontinued businesses held for sale
|
5.9
|
183.2
|
|||||
|
Deferred
income taxes
|
87.7
|
79.8
|
|||||
|
Other
current assets
|
131.1
|
102.8
|
|||||
|
Total
current assets
|
3,937.8
|
3,318.3
|
|||||
|
|
|||||||
|
Plant,
property and equipment, net
|
875.3
|
833.0
|
|||||
|
Deferred
income taxes
|
196.0
|
136.1
|
|||||
|
Goodwill,
net
|
2,600.1
|
2,336.8
|
|||||
|
Other
intangible assets, net
|
298.2
|
213.2
|
|||||
|
Other
assets
|
689.9
|
563.2
|
|||||
|
Total
assets
|
$
|
8,597.3
|
$
|
7,400.6
|
|||
|
Liabilities
and Shareholders' Equity
|
|||||||
|
Current
Liabilities:
|
|||||||
|
Accounts
payable
|
$
|
1,016.4
|
$
|
929.4
|
|||
|
Accrued
expenses
|
860.5
|
839.4
|
|||||
|
Accrued
taxes
|
73.2
|
105.6
|
|||||
|
Notes
payable and current maturities of long-term debt
|
1,143.8
|
597.0
|
|||||
|
Pension
and postretirement benefits
|
68.9
|
68.9
|
|||||
|
Liabilities
of discontinued businesses held for sale
|
1.5
|
96.7
|
|||||
|
Deferred
income taxes
|
1.9
|
0.2
|
|||||
|
Total
current liabilities
|
3,166.2
|
2,637.2
|
|||||
|
Pension
and postretirement benefits
|
716.8
|
735.5
|
|||||
|
Long-term
debt
|
491.4
|
500.4
|
|||||
|
Other
liabilities
|
771.9
|
658.1
|
|||||
|
Total
liabilities
|
5,146.3
|
4,531.2
|
|||||
|
Shareholders'
equity
|
3,451.0
|
2,869.4
|
|||||
|
Total
liabilities and shareholders' equity
|
$
|
8,597.3
|
$
|
7,400.6
|
|||
ITT
CORPORATION
AND SUBSIDIARIES
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
(In
millions)
(Unaudited)
|
Nine
Months Ended
|
|||||||
|
|
September
30,
|
||||||
|
|
2007
|
2006
|
|||||
| Operating Activities | |||||||
|
Net
income
|
$
|
583.8
|
$
|
440.3
|
|||
|
Less:
Income from discontinued operations
|
(79.2
|
)
|
(62.5
|
)
|
|||
|
Income
from continuing operations
|
504.6
|
377.8
|
|||||
|
Adjustments
to income from continuing operations:
|
|||||||
|
Depreciation
and amortization
|
134.7
|
127.1
|
|||||
|
Stock-based
compensation
|
26.6
|
16.7
|
|||||
|
Restructuring
and asset impairment charges, net
|
31.1
|
32.0
|
|||||
|
Payments
for restructuring
|
(35.8
|
)
|
(36.2
|
)
|
|||
|
Change
in receivables
|
(116.4
|
)
|
(68.5
|
)
|
|||
|
Change
in inventories
|
17.7
|
(76.9
|
)
|
||||
|
Change
in accounts payable and accrued expenses
|
70.2
|
176.3
|
|||||
|
Change
in accrued and deferred taxes
|
(62.7
|
)
|
14.0
|
||||
|
Change
in other current and non-current assets
|
(84.9
|
)
|
(82.9
|
)
|
|||
|
Change
in other non-current liabilities
|
(1.4
|
)
|
9.3
|
||||
|
Other,
net
|
6.4
|
(1.3
|
)
|
||||
|
Net
cash — operating activities
|
490.1
|
487.4
|
|||||
| Investing Activities | |||||||
|
Additions
to plant, property and equipment
|
(108.2
|
)
|
(95.2
|
)
|
|||
|
Acquisitions,
net of cash acquired
|
(395.7
|
)
|
(75.2
|
)
|
|||
|
Proceeds
from sale of assets and businesses
|
232.4
|
223.7
|
|||||
|
Other,
net
|
1.5
|
(6.4
|
)
|
||||
|
Net
cash — investing activities
|
(270.0
|
)
|
46.9
|
||||
| Financing Activities | |||||||
|
Short-term
debt, net
|
532.8
|
(157.2
|
)
|
||||
|
Long-term
debt repaid
|
(7.2
|
)
|
(2.2
|
)
|
|||
|
Long-term
debt issued
|
0.4
|
-
|
|||||
|
Repurchase
of common stock
|
(299.0
|
)
|
(136.4
|
)
|
|||
|
Proceeds
from issuance of common stock
|
55.2
|
53.0
|
|||||
|
Dividends
paid
|
(71.3
|
)
|
(57.3
|
)
|
|||
|
Tax
benefit from stock option exercises
|
13.0
|
13.6
|
|||||
|
Other,
net
|
(2.4
|
)
|
—
|
||||
|
Net
cash — financing activities
|
221.5
|
(286.5
|
)
|
||||
|
Exchange
Rate Effects on Cash and Cash Equivalents
|
70.7
|
29.8
|
|||||
|
Net
Cash — Discontinued Operations:
|
|||||||
|
Operating
Activities
|
(2.7
|
)
|
71.2
|
||||
|
Investing
Activities
|
(5.6
|
)
|
(7.2
|
)
|
|||
|
Financing
Activities
|
(1.0
|
)
|
(0.1
|
)
|
|||
|
Net
change in cash and cash equivalents
|
503.0
|
341.5
|
|||||
|
Cash
and cash equivalents — beginning of year
|
937.1
|
451.0
|
|||||
|
Cash
and Cash Equivalents — end of period
|
$
|
1,440.1
|
$
|
792.5
|
|||
ITT
Corporation Non-GAAP Reconciliation
Reported
vs. Organic Revenue / Orders Growth
Third
Quarter 2007 & 2006
($
Millions)
|
(As
Reported - GAAP)
|
|||||||||||||
|
Sales
&
|
|
Sales
&
|
|
Change
|
|
%
Change
|
|||||||
|
Revenues
|
Revenues
|
2007
vs.
|
2007
vs.
|
||||||||||
|
3M
2007
|
3M
2006
|
2006
|
2006
|
||||||||||
|
ITT
Corporation - Consolidated
|
2,181.2
|
2,001.1
|
180.1
|
9.0
|
%
|
||||||||
|
Defense
Electronics & Services
|
1,011.5
|
957.4
|
54.1
|
5.7
|
%
|
||||||||
|
ACD
- Tactical Radios
|
198.3
|
196.5
|
1.8
|
0.9
|
%
|
||||||||
|
Space
Systems
|
144.7
|
186.4
|
(41.7)
|
-22.4 | % | ||||||||
|
Advanced
Engineering & Sciences
|
120.4
|
87.0
|
33.4
|
38.4
|
%
|
||||||||
|
Electronic
Systems
|
105.6
|
105.5
|
0.1
|
0.1
|
%
|
||||||||
|
Night
Vision
|
129.1
|
111.1
|
18.0
|
16.2
|
%
|
||||||||
|
Systems
|
316.4
|
273.0
|
43.4
|
15.9
|
%
|
||||||||
|
Fluid
Technology
|
858.4
|
780.3
|
78.1
|
10.0
|
%
|
||||||||
|
Industrial
Process
|
173.4
|
147.4
|
26.0
|
17.6
|
%
|
||||||||
|
Residential
and Commercial Water
|
|||||||||||||
|
Group
|
305.8
|
279.4
|
26.4
|
9.4
|
%
|
||||||||
|
Water
& WasteWater
|
389.2
|
359.4
|
29.8
|
8.3
|
%
|
||||||||
|
Motion
& Flow Control
|
314.6
|
267.0
|
47.6
|
17.8
|
%
|
||||||||
|
Aerospace
Controls
|
26.1
|
20.3
|
5.8
|
28.6
|
%
|
||||||||
|
Marine
& Leisure
|
58.8
|
55.4
|
3.4
|
6.1
|
%
|
||||||||
|
Friction
Materials
|
88.7
|
72.1
|
16.6
|
23.0
|
%
|
||||||||
|
Koni
Shocks
|
22.8
|
19.4
|
3.4
|
17.5
|
%
|
||||||||
|
IMC
|
11.1
|
0.0
|
11.1
|
0.0
|
%
|
||||||||
|
Connectors
|
107.1
|
99.8
|
7.3
|
7.3
|
%
|
||||||||
|
|
%
|
||||||||||||
|
Change
|
|||||||||||||
|
|
|
Change
|
2007
|
||||||||||
|
Orders
|
Orders
|
.2007
vs.
|
vs
|
||||||||||
|
3M
2007
|
3M
2006
|
2006
|
2006
|
||||||||||
|
Defense
Electronics & Services
|
1,126.1
|
1,056.5
|
69.6
|
7
|
%
|
||||||||
|
Fluid
Technology
|
929.8
|
821.3
|
108.5
|
13
|
%
|
||||||||
|
Motion
& Flow Control
|
325.7
|
274.9
|
50.8
|
18
|
%
|
||||||||
|
Total
Segment Orders
|
2,378.4
|
2,150.8
|
227.6
|
11
|
%
|
||||||||
|
(As
Adjusted - Organic)
|
|||||||||||||
|
|
|
Acqui-
|
|||||||||||
|
|
sition
|
FX
|
Adj
|
||||||||||
|
Sales
&
|
Contri-
|
Contri-
|
Sales
&
|
||||||||||
|
Revenues
|
bution
|
bution
|
Revenues
|
||||||||||
|
3M
2007
|
3M
2007
|
3M
2007
|
3M
2007
|
||||||||||
|
ITT
Corporation - Consolidated
|
2,181.2
|
(12.8
|
)
|
(44.0
|
)
|
2,124.4
|
|||||||
|
Defense
Electronics & Services
|
1,011.5
|
(1.2
|
)
|
(0.1
|
)
|
1,010.2
|
|||||||
|
ACD
- Tactical Radios
|
198.3
|
0.0
|
0.0
|
198.3
|
|||||||||
|
Space
Systems
|
144.7
|
0.0
|
(0.1
|
)
|
144.6
|
||||||||
|
Advanced
Engineering & Sciences
|
120.4
|
(1.2
|
)
|
0.0
|
119.2
|
||||||||
|
Electronic
Systems
|
105.6
|
0.0
|
0.0
|
105.6
|
|||||||||
|
Night
Vision
|
129.1
|
0.0
|
0.0
|
129.1
|
|||||||||
|
Systems
|
316.4
|
0.0
|
0.0
|
316.4
|
|||||||||
|
Fluid
Technology
|
858.4
|
0.0
|
(31.9
|
)
|
826.5
|
||||||||
|
Industrial
Process
|
173.4
|
0.0
|
(1.3
|
)
|
172.1
|
||||||||
|
Residential
and Commercial Water
|
|||||||||||||
|
Group
|
305.8
|
0.0
|
(8.0
|
)
|
297.8
|
||||||||
|
Water
& WasteWater
|
389.2
|
0.0
|
(22.9
|
)
|
366.3
|
||||||||
|
Motion
& Flow Control
|
314.6
|
(11.6
|
)
|
(12.1
|
)
|
290.9
|
|||||||
|
Aerospace
Controls
|
26.1
|
(0.5
|
)
|
0.0
|
25.6
|
||||||||
|
Marine
& Leisure
|
58.8
|
0.0
|
(1.9
|
)
|
56.9
|
||||||||
|
Friction
Materials
|
88.7
|
0.0
|
(6.5
|
)
|
82.2
|
||||||||
|
Koni
Shocks
|
22.8
|
0.0
|
(1.3
|
)
|
21.5
|
||||||||
|
IMC
|
11.1
|
(11.1
|
)
|
0.0
|
0.0
|
||||||||
|
Connectors
|
107.1
|
0.0
|
0.0
|
107.1
|
|||||||||
|
Orders
3M
2007
|
Acquisition
3M
2007
|
FX
Contribution
3M
2007
|
Adj.
Orders
3M
2007
|
||||||||||
|
Defense
Electronics & Services
|
1,126.1
|
(1.2
|
)
|
(0.1)
|
1,124.8 | ||||||||
|
Fluid
Technology
|
929.8
|
0.0
|
(33.0
|
)
|
896.8
|
||||||||
|
Motion
& Flow Control
|
325.7
|
(1.0
|
)
|
(13.1
|
)
|
311.6
|
|||||||
|
Total
Segment Orders
|
2,378.4
|
(2.2
|
)
|
(46.2
|
)
|
2,330.0
|
|||||||
|
(As
Adjusted - Organic)
|
||||||||||
|
Sales
&
|
Change
|
%
Change
|
||||||||
|
Revenues
|
Adj.
07
|
Adj.
07
|
||||||||
|
3M
2006
|
vs.
06
|
vs.
06
|
||||||||
|
ITT
Corporation - Consolidated
|
2,001.1
|
123.3
|
6.2
|
%
|
||||||
|
Defense
Electronics & Services
|
957.4
|
52.8
|
5.5
|
%
|
||||||
|
ACD
- Tactical Radios
|
196.5
|
1.8
|
0.9
|
%
|
||||||
|
Space
Systems
|
186.4
|
(41.8
|
)
|
-22.4
|
%
|
|||||
|
Advanced
Engineering & Sciences
|
87.0
|
32.2
|
37.0
|
%
|
||||||
|
Electronic
Systems
|
105.5
|
0.1
|
0.1
|
%
|
||||||
|
Night
Vision
|
111.1
|
18.0
|
16.2
|
%
|
||||||
|
Systems
|
273.0
|
43.4
|
15.9
|
%
|
||||||
|
Fluid
Technology
|
780.3
|
46.2
|
5.9
|
%
|
||||||
|
Industrial
Process
|
147.4
|
24.7
|
16.8
|
%
|
||||||
|
Residential
and Commercial Water
|
||||||||||
|
Group
|
279.4
|
18.4
|
6.6
|
%
|
||||||
|
Water
& WasteWater
|
359.4
|
6.9
|
1.9
|
%
|
||||||
|
Motion
& Flow Control
|
267.0
|
23.9
|
9.0
|
%
|
||||||
|
Aerospace
Controls
|
20.3
|
5.3
|
26.1
|
%
|
||||||
|
Marine
& Leisure
|
55.4
|
1.5
|
2.7
|
%
|
||||||
|
Friction
Materials
|
72.1
|
10.1
|
14.0
|
%
|
||||||
|
Koni
Shocks
|
19.4
|
2.1
|
10.8
|
%
|
||||||
|
IMC
|
0.0
|
0.0
|
0.0
|
%
|
||||||
|
Connectors
|
99.8
|
7.3
|
7.3
|
%
|
||||||
|
Change
|
%
Change
|
|||||||||
|
Orders
|
Adj.
07
|
Adj.
07
|
||||||||
|
3M
2006
|
vs.
06
|
vs.
06
|
||||||||
|
Defense
Electronics & Services
|
1,056.5
|
68.3
|
6.5
|
%
|
||||||
|
Fluid
Technology
|
821.3
|
75.5
|
9.2
|
%
|
||||||
|
Motion
& Flow Control
|
274.9
|
36.7
|
13.4
|
%
|
||||||
|
Total
Segment Orders
|
2,150.8
|
179.2
|
8.3
|
%
|
||||||
Note:
Excludes intercompany eliminations.
ITT
Corporation Non-GAAP Reconciliation
Segment
Operating Income & OI Margin Adjusted for
Restructuring
Third
Quarter of 2007 & 2006
($
Millions)
|
Adjust
|
||||||||||||||||
|
%
|
for
|
|||||||||||||||
|
Q3
2007
|
Q3
2006
|
Change
|
Q3
2007
|
2007
|
||||||||||||
|
As
|
As
|
07
vs.
|
As
|
Restruc-
|
||||||||||||
|
Reported
|
Reported
|
06
|
Reported
|
turing
|
||||||||||||
|
Sales
and Revenues:
|
||||||||||||||||
|
Defense
Electronics & Services
|
1,011.5
|
957.4
|
1,011.5 | |||||||||||||
|
Fluid
Technology
|
858.4
|
780.3
|
858.4 | |||||||||||||
|
Motion
& Flow Control
|
314.6
|
267.0
|
314.6 | |||||||||||||
|
Intersegment
eliminations
|
(3.3
|
)
|
(3.6
|
)
|
(3.3 | ) | ||||||||||
|
Total
Sales and Revenues
|
2,181.2
|
2,001.1 | 2,181.2 | |||||||||||||
|
Operating
Margin:
|
||||||||||||||||
|
Defense
Electronics & Services
|
13.6
|
%
|
11.8
|
%
|
13.6 | % | ||||||||||
|
Fluid
Technology
|
12.9
|
%
|
12.5
|
%
|
12.9 | % | ||||||||||
|
Motion
& Flow Control
|
14.1
|
%
|
12.6
|
%
|
14.1 | % | ||||||||||
|
Total
Ongoing Segments
|
13.4
|
%
|
12.2
|
%
|
13.4 | % | ||||||||||
|
Income:
|
||||||||||||||||
|
Defense
Electronics & Services
|
137.1
|
112.6
|
21.8 | % |
137.1
|
(0.1 | ) | |||||||||
|
Fluid
Technology
|
110.7
|
97.8
|
13.2 | % |
110.7
|
6.6 | ||||||||||
|
Motion
& Flow Control
|
44.4
|
33.7
|
31.8 | % |
44.4
|
0.6 | ||||||||||
|
Total
Segment Operating Income
|
292.2
|
244.1
|
19.7 | % |
292.2
|
7.1 | ||||||||||
|
Q3
2007
As
Reported
|
Q3
2006
As
Reported
|
Adjust
for
2006 Restructering
|
Q3
2006
As
Reported
|
%
Change
Adj.
07
vs.
06
|
||||||||||||
|
Sales
and Revenues:
|
||||||||||||||||
|
Defense
Electronics & Services
|
1,011.5
|
957.4
|
957.4 | |||||||||||||
|
Fluid
Technology
|
858.4
|
780.3
|
780.3 | |||||||||||||
|
Motion
& Flow Control
|
314.6
|
267.0
|
267.0 | |||||||||||||
|
Intersegment
eliminations
|
(3.3
|
)
|
(3.6
|
)
|
(3.6 | ) | ||||||||||
|
Total
Sales and Revenues
|
2,181.2
|
2,001.1
|
2,001.1 | |||||||||||||
|
Operating
Margin:
|
||||||||||||||||
|
Defense
Electronics & Services
|
13.5
|
%
|
11.8
|
%
|
11.9
|
%
|
160 BP | |||||||||
|
Fluid
Technology
|
13.7
|
%
|
12.5
|
%
|
13.3
|
%
|
40 BP | |||||||||
|
Motion
& Flow Control
|
14.3
|
%
|
12.6
|
%
|
13.6
|
%
|
70 BP | |||||||||
|
Total
Ongoing Segments
|
13.7
|
%
|
12.2
|
%
|
12.7
|
%
|
100 BP | |||||||||
|
Income:
|
||||||||||||||||
|
Defense
Electronics & Services
|
137.0
|
112.6
|
1.0
|
113.6
|
20.6
|
%
|
||||||||||
|
Fluid
Technology
|
117.3
|
97.8
|
5.6
|
103.4
|
13.4
|
%
|
||||||||||
|
Motion
& Flow Control
|
45.0
|
33.7
|
2.6
|
36.3
|
24.0
|
%
|
||||||||||
|
Total
Segment Operating
|
||||||||||||||||
|
Income
|
299.3
|
244.1
|
9.2
|
253.3
|
18.2
|
%
|
||||||||||
ITT
Corporation Non-GAAP Reconciliation
Reported
vs. Adjusted Net Income & EPS
Third
Quarter of 2007 & 2006
($
Millions, except EPS and shares)
|
Q3
2007
|
|
Q3
2007
|
Q3
2006
|
||||||||||
|
As
|
Q3
2007
|
As
|
As
|
||||||||||
|
Reported
|
Adjustments
|
Reported
|
Reported
|
||||||||||
|
Segment
Operating Income
|
292.2
|
7.1
|
#A
|
299.3
|
244.1
|
||||||||
|
|
|||||||||||||
|
Interest
Income (Expense)
|
(13.2
|
)
|
-
|
(13.2
|
)
|
(13.1
|
)
|
||||||
|
Other
Income (Expense)
|
(4.6
|
)
|
-
|
(4.6
|
)
|
(4.1
|
)
|
||||||
|
Corporate
(Expense)
|
(32.7
|
)
|
0.1
|
#A
|
(32.6
|
)
|
(29.2 | ) | |||||
|
Income
from Continuing Operations before Tax
|
241.7
|
7.2
|
248.9
|
197.7
|
|||||||||
|
Income
Tax Items
|
4.4
|
(4.4)
|
#B
|
-
|
2.6
|
||||||||
|
Income
Tax Expense
|
(77.5
|
)
|
(2.3)
|
#C
|
(79.8
|
)
|
(59.9 | ) | |||||
|
Total
Tax Expense
|
(73.1
|
)
|
(6.7)
|
|
(79.8
|
)
|
(57.3 | ) | |||||
|
Income
from Continuing Operations
|
168.6
|
0.5
|
169.1
|
140.4
|
|||||||||
|
Diluted
EPS from Continuing Operations
|
0.92
|
0.00
|
0.92
|
0.75
|
|
|
Percent
|
||||||||||||
|
|
Change
|
Change
|
|||||||||||
|
Q3
2006
|
Q3
2006
|
2007
vs.
|
2007
vs.
|
||||||||||
|
Adjust-
|
As
|
2006
As
|
2006
As
|
||||||||||
|
ments
|
Adjusted
|
Adjusted
|
Adjusted
|
||||||||||
|
Segment
Operating Income
|
9.2
|
#D
|
253.3
|
||||||||||
|
Interest
Income (Expense)
|
-
|
(13.1
|
)
|
||||||||||
|
Other
Income (Expense)
|
-
|
(4.1
|
)
|
||||||||||
|
Corporate
(Expense)
|
0.5
#D
|
(28.7
|
)
|
||||||||||
|
Income
from Continuing Operations before Tax
|
9.7
|
207.4
|
|||||||||||
|
Income
Tax Items
|
(4.2)
|
#E
|
(1.6
|
)
|
|||||||||
|
Income
Tax Expense
|
(3.0)
|
#F
|
(62.9
|
)
|
|||||||||
|
|
|||||||||||||
|
Total
Tax Expense
|
(7.2)
|
|
(64.5
|
)
|
|||||||||
|
Income
from Continuing Operations
|
2.5
|
142.9
|
|||||||||||
|
Diluted
EPS from Continuing Operations
|
0.02 |
0.77
|
$ |
0.15
|
|
19.5
|
% | ||||||
#A
-
Remove Restructuring Expense of $7.1M and $0.1M.
#B
-
Remove Tax Benefit - special items of ($4.4M).
#C
-
Remove Tax Benefit on restructuring of ($2.3M).
#D
-
Remove Restructuring Expense of $9.2M and $0.5M.
#E
-
Remove Tax Refund of ($2.6M) and apply structural tax rate impact in
Q3.
#F
-
Remove Tax Benefit on restructuring of ($3.0M).
ITT
Corporation Non-GAAP Reconciliation
Cash
From Operating Activities vs. Free Cash Flow
Third
Quarter of 2007 & 2006
($
Millions)
|
3rd
Qtr.07
|
3rd
Qtr.06
|
||||||
|
Cash
from Operations
|
490.1
|
487.4
|
|||||
|
Capital
Expenditures
|
(108.2
|
)
|
(95.2
|
)
|
|||
|
Pension
Pre-funding, net of tax
|
50.0
|
87.0
|
|||||
|
Free
Cash Flow
|
431.9
|
479.2
|
|||||