================================================================================
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): April 29, 2005
ITT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-5627 13-5158950
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4 West Red Oak Lane
White Plains, New York 10604
(Address of principal (Zip Code)
executive offices)
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):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Not Applicable
(Former name or former address, if changed since last report)
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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
financial information for ITT Industries, Inc. for the quarter ended March 31,
2005 as presented in a press release dated April 29, 2005. 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 April 29, 2005.
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 INDUSTRIES, INC.
By: /s/ Kathleen S. Stolar
------------------------------
Kathleen S. Stolar
Its: Vice President, Secretary
and Associate General Counsel
Date: April 29, 2005
Exhibit 99.1
ITT INDUSTRIES REPORTS FIRST QUARTER EPS OF $1.24, UP 32 PERCENT INCLUDING
BENEFIT OF SPECIAL ITEMS; COMPANY RAISES FY 2005 GUIDANCE
- Earnings before benefit of special items $1.13, up 22 percent over
comparable $0.93
- Revenue up 25 percent to $1.9 billion; organic revenue up 13 percent,
marking sixth consecutive quarter of double-digit organic revenue growth
- Order activity up 29 percent; organic orders up 20 percent
- Strong cash flow on higher income, lower working capital levels
- Company raises FY EPS guidance from $5.00-5.15 to $5.10-5.25
WHITE PLAINS, N.Y., April 29 /PRNewswire-FirstCall/ -- ITT Industries, Inc.
(NYSE: ITT) today announced first quarter 2005 net income of $116.5 million, up
$27.6 million over the first quarter 2004 including the net benefit of special
items. Diluted earnings per share (EPS) for the quarter, including the net
benefit of special items, was $1.24, up $0.30 per share from reported EPS in the
first quarter 2004. During the first quarter 2005, the company realized a $0.36
per share benefit from several tax items, which was partially offset by other
special items, primarily restructuring costs and discontinued operations, of
$(0.25) per share. The net effect of these special items was a $0.11 increase in
reported EPS for the first quarter 2005. Adjusting results to exclude the
benefit of these special items, earnings for the first quarter 2005 were $1.13
per share, up 22 percent over the comparable adjusted figure of $0.93 for the
same period in 2004.
"We're off to a great start for the year, with strong performance in our
core businesses contributing to the sixth consecutive quarter of double-digit
organic revenue growth," said Steve Loranger, Chairman, President and Chief
Executive Officer of ITT Industries. "Our Defense business continues to perform
well, reporting 53 percent revenue growth, with organic revenue growth of 26
percent, and solid margin expansion. Fluid Technology saw 11 percent revenue
growth, with organic revenue growth of 7 percent, and continued favorable order
activity going into the second quarter. Higher revenue, along with operational
improvements and strong cash flow combined to make this a very solid quarter for
ITT."
"Taking everything into consideration, with our strong first quarter and
improved visibility across most of our businesses, we're raising our earnings
target for the full year to a range of $5.10-$5.25, up 12 - 15 percent over
adjusted 2004 EPS. Our previous range for 2005 was $5.00 - $5.15. We now
estimate that full-year 2005 revenues will range from $7.4 - $7.6 billion, up
10-13 percent from last year, and we are raising our full-year 2005 cash
forecast to $500 - $550 million. This revised guidance reflects the long-term
growth opportunities that we believe exist throughout ITT's portfolio."
First Quarter Financial Highlights
* First quarter 2005 revenues rose 25 percent over first quarter 2004 to
$1.9 billion on sales growth in all four business segments, the
acquisition of Kodak's Remote Sensing business and the positive impact of
foreign currency translation. Organic revenue, excluding foreign exchange
and acquisitions, grew 13 percent in the first quarter and organic order
growth was 20 percent.
* Segment operating income in the quarter grew 17 percent over the first
quarter 2004 to $173.5 million on higher revenue and operational
improvements.
* The company's first quarter 2005 cash from operations improved
approximately $127 million over the first quarter 2004.
First Quarter Segment Highlights
Fluid Technology
* First quarter Fluid Technology revenues were $639.6 million, up $64.7
million or 11 percent from the first quarter 2004. Revenue growth was
driven by organic growth in wastewater, building trades and industrial
product sales, as well as acquisitions and the positive impact of foreign
currency translation. Segment operating income was $56 million and
operating margin declined 40 basis points when including the impact of
restructuring. Adjusting to exclude the effects of restructuring costs,
operating income was $62.5 million, up 12 percent from the comparable
figure in the first quarter 2004, and operating margin increased
slightly.
* ITT's core water and wastewater business continues its growth trend on
strong demand for its pumps and water treatment technologies. The
wastewater business grew first quarter revenues 16 percent over last
year, and grew organic revenues 11 percent.
* Order activity for Fluid Technology's late cycle businesses continues to
be favorable going into the second quarter, with the company pursuing a
number of business opportunities in a broad range of markets, including
industrial, chemical and mining in virtually every region of the world.
* As part of ITT's ongoing initiative to better align its business
structure with its customer base, the company combined its Industrial and
Engineered Products groups within Fluid Technology to create a $550
million business focusing on Industrial and BioPharm markets.
Defense Electronics & Services
* Defense Electronics & Services revenues for the first quarter were $775.7
million, up $269.2 million or 53 percent over last year, due to the
impact of the Remote Sensing business acquisition and to increased sales
at nearly all of the segment's businesses, particularly Night Vision,
Aerospace/Communication and Systems. Organic revenue growth was 26
percent. Operating income rose $29.1 million or 60 percent to $77.8
million, and operating margin rose 40 basis points on increased sales of
higher margin products. The Defense backlog now stands at a record high
$3.52 billion, up 11 percent over the first quarter of 2004.
* The company's Night Vision business continues its growth trend, and in
the first quarter won a sole source contract for Enhanced Night Vision
Goggles (ENVGs) from the U.S. Army. The contract has a potential
estimated value of $560 million over five years. The ENVG combines the
strengths of image intensification and infrared technologies into one
unit, allowing soldiers to complete their missions more effectively, even
when confronted by low-light conditions or obscurants such as smoke and
fog.
* Based on the military's ongoing and growing need for secure communication
systems, ITT's Aerospace/Communications division is well along in its
plan to triple the production rate of its SINCGARS channel-hopping radio
systems over its production level at the end of 2004.
Motion & Flow Control
* Motion & Flow Control revenues for the first quarter were $297.6 million,
up $23.6 million or 9 percent on higher volume in friction materials and
Aerospace Controls, and the positive impact of foreign currency
translation. Organic revenue growth was 5 percent. Operating income
declined $0.5 million to $38.6 million due to costs associated with
restructuring; excluding restructuring costs, operating income was up
$4.9 million to $44.2 million, while operating margin rose 60 basis
points on improved product mix and operational improvements.
* ITT's friction materials business continues to gain market share in
Europe, with 33 percent revenue growth in the first quarter. The company
remains on track to open a new production facility in the U.S. and begin
product shipments in the third quarter of this year.
* The company's Aerospace Controls business reported revenue growth of 22
percent for the quarter on increased demand for its switches, valves and
actuators, and profitability increased on higher volume and operational
improvements.
Electronic Components
* Electronic Components revenues for the first quarter rose $16.3 million
or 10 percent to $173.7 million, with organic revenue growth of 8
percent, and a book-to-bill ratio of 1.04. Operating income was reduced
by $6 million due primarily to an increase in restructuring costs.
Excluding the effects of restructuring, operating income was relatively
flat at $8.4 million.
* Sales growth in the Electronic Components segment was led by the
company's mechatronic switches for off-road and heavy vehicles, which
grew revenue by 48 percent over the same period last year. Stronger
military and commercial aerospace markets led to increased sales of ITT's
fiber optic and rack-and-panel connectors in those areas.
* In an effort to better align the company's business structure with its
end markets and enhance new product development, Electronic Components
reorganized six product marketing units into two value centers:
Commercial, which includes telecommunications, automotive and computer
markets; and Industrial, which includes military and commercial
aerospace, industrial, medical, energy and off-road transportation.
Reorganization activities are expected to wrap up in the second quarter,
with the goal of a more cost-efficient, streamlined, more
customer-focused organization.
About ITT Industries
ITT Industries, Inc. (http://www.itt.com) supplies advanced technology
products and services in key markets including: fluid and water management
including water treatment; defense communication, opto-electronics, information
technology and services; electronic interconnects and switches; and other
specialty products. Headquartered in White Plains, NY, the company generated
$6.8 billion in 2004 sales.
In addition to the New York Stock Exchange, ITT Industries stock is traded
on the Midwest, Pacific, Paris, London and Frankfurt exchanges.
For free B-roll/video content about ITT Industries, please log onto
http://www.thenewsmarket.com/ITT to preview and request video. You can receive
broadcast-standard video quality digitally or by tape from this site.
Registration and video are free to the media.
Certain material presented herein consists of "forward-looking statements"
within the meaning of federal securities laws 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. Such factors include general economic conditions,
foreign currency exchange rates, competition and other factors all as more
thoroughly set forth in Item 1. Business and Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Forward-Looking
Statements in the ITT Industries, Inc. Form 10-K Annual Report for the fiscal
year ended December 31, 2004, and other of its filings with the Securities and
Exchange Commission.
NOTE: ITT Industries 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 INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENTS
(In millions, except per share)
(Unaudited)
Three Months Ended
March 31,
---------------------------
2005 2004
------------ ------------
Sales and revenues $ 1,883.1 $ 1,511.1
Costs of sales and revenues 1,287.7 1,003.4
Selling, general and administrative expenses 270.9 228.0
Research, development and engineering expenses 152.8 144.6
Restructuring and asset impairment charges 19.4 4.7
Total costs and expenses 1,730.8 1,380.7
Operating income 152.3 130.4
Interest expense 20.1 10.3
Interest income 14.2 9.2
Miscellaneous expense 5.0 3.6
Income from continuing operations
before income taxes 141.4 125.7
Income tax expense 14.2 36.7
Income from continuing operations 127.2 89.0
Discontinued operations, including tax benefit
of $5.7, $ - in each period (10.7) (0.1)
Net income $ 116.5 $ 88.9
Earnings Per Share:
Income from continuing operations:
Basic $ 1.37 $ 0.96
Diluted $ 1.35 $ 0.94
Discontinued operations:
Basic $ 0.11 $ --
Diluted $ 0.11 $ --
Net income:
Basic $ 1.26 $ 0.96
Diluted $ 1.24 $ 0.94
Average Common Shares - Basic 92.3 92.3
Average Common Shares - Diluted 94.2 94.5
ITT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
March 31, December 31,
2005 2004
------------ ------------
Assets
Current Assets:
Cash and cash equivalents $ 336.3 $ 262.9
Receivables, net 1,238.8 1,174.3
Inventories, net 709.7 708.4
Current assets of
discontinued operations 3.8 7.3
Deferred income taxes 99.9 107.2
Other current assets 89.2 69.1
Total current assets 2,477.7 2,329.2
Plant, property and equipment, net 942.9 980.9
Deferred income taxes 235.4 212.1
Goodwill, net 2,488.7 2,514.1
Other intangible assets, net 237.7 240.3
Other assets 1,080.3 1,000.1
Total assets $ 7,462.7 $ 7,276.7
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 712.7 $ 719.8
Accrued expenses 755.9 717.2
Accrued taxes 266.5 277.4
Current liabilities of discontinued
operations 3.8 --
Notes payable and current
maturities of long-term debt 905.0 729.2
Other current liabilities 0.2 2.2
Total current liabilities 2,644.1 2,445.8
Pension and postretirement benefits 1,374.1 1,378.5
Long-term debt 535.6 542.8
Other liabilities 564.7 566.6
Total liabilities 5,118.5 4,933.7
Shareholders' equity 2,344.2 2,343.0
Total liabilities and
shareholders' equity $ 7,462.7 $ 7,276.7
ITT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Year Ended March 31,
---------------------------
2005 2004
------------ ------------
Operating Activities
Net income $ 116.5 $ 88.9
Loss from discontinued operations 10.7 0.1
Income from continuing operations 127.2 89.0
Adjustments to income from continuing operations:
Depreciation and amortization 55.5 48.6
Restructuring and asset impairment charges 19.4 4.7
Payments for restructuring (10.8) (9.5)
Change in receivables (89.3) (156.7)
Change in inventories (18.1) 2.6
Change in accounts payable and accrued expenses 53.1 (5.4)
Change in accrued and deferred taxes (10.6) 21.7
Change in other current and non-current assets (111.4) (115.4)
Change in other non-current liabilities (5.2) 0.4
Other, net 2.6 5.6
Net cash - operating activities 12.4 (114.4)
Investing Activities
Additions to plant, property and equipment (30.4) (28.9)
Acquisitions, net of cash acquired (1.2) (243.0)
Proceeds from sale of assets and businesses 3.6 2.6
Other, net 0.3 0.3
Net cash - investing activities (27.7) (269.0)
Financing Activities
Short-term debt, net 179.3 251.2
Long-term debt repaid (3.4) (35.5)
Long-term debt issued 0.4 --
Repurchase of common stock (82.4) (39.6)
Proceeds from issuance of common stock 35.7 17.3
Dividends paid (33.2) (14.8)
Other, net (0.3) --
Net cash - financing activities 96.1 178.6
Exchange Rate Effects on Cash and Cash Equivalents (9.4) (8.9)
Net Cash - Discontinued Operations 2.0 (1.4)
Net change in cash and cash equivalents 73.4 (215.1)
Cash and cash equivalents - beginning of year 262.9 414.2
Cash and Cash Equivalents - end of period 336.3 199.1
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Organic Revenue / Orders Growth
First Quarter 2005 & 2004
($ Millions)
(As Reported - GAAP)
-------------------------------------------------
Sales & Sales & Change % Change
Revenues Revenues 2005 vs. 2005 vs.
3M 2005 3M 2004 2004 2004
---------- ---------- ---------- ----------
ITT Industries - Consolidated 1,883.1 1,511.1 372.0 25%
Fluid Technology 639.6 574.9 64.7 11%
Water Wastewater Division 217.7 188.4 29.3 16%
Defense Electronics 775.7 506.5 269.2 53%
Motion & Flow Control 297.6 274.0 23.6 9%
Electronic Components 173.7 157.4 16.3 10%
Orders Orders Change %Change
3M 2005 3M 2004 2005vs.2004 2005vs.2004
---------- ---------- ----------- -----------
ITT Industries - Consolidated 2,014.3 1,567.3 447.0 29%
Orders Sales Orders / Sales
3M 2005 3M 2005 Book-to-Bill
---------- ---------- --------------
Electronic Components 180.1 173.7 1.04
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Organic Revenue / Orders Growth
First Quarter 2005 & 2004
($ Millions)
(As Adjusted - Organic)
--------------------------------------------------------------
Acqui-
sition FX Adj.
Sales & Contri- Contri- Sales & Sales &
Revenues bution bution Revenues Revenues
3M 2005 3M 2005 3M 2005 3M 2005 3M 2004
---------- ---------- ---------- ---------- ----------
ITT Industries -
Consolidated 1,883.1 (146.2) (27.6) 1,709.3 1,511.1
Fluid Technology 639.6 (9.2) (15.6) 614.8 574.9
Water Wastewater Division 217.7 0.0 (8.7) 209.0 188.4
Defense Electronics 775.7 (136.0) 0.0 639.7 506.5
Motion & Flow Control 297.6 (1.0) (8.7) 287.9 274.0
Electronic Components 173.7 0.0 (3.3) 170.4 157.4
Acquisition FX Adj.
Orders Contribution Contribution Orders
3M 2005 3M 2005 3M 2005 3M 2005
---------- ------------ ------------ -------
ITT Industries - Consolidated 2,014.3 (112.3) (27.2) 1,874.8
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Organic Revenue / Orders Growth
First Quarter 2005 & 2004
($ Millions)
Change % Change
Adj. 05 vs. 04 Adj. 05 vs. 04
-------------- --------------
ITT Industries - Consolidated 198.2 13%
Fluid Technology 39.9 7%
Water Wastewater Division 20.6 11%
Defense Electronics 133.2 26%
Motion & Flow Control 13.9 5%
Electronic Components 13.0 8%
Orders Change % Change
3M 2004 Adj. 05 Adj. 05
vs. 04 vs. 04
---------- ---------- ----------
ITT Industries - Consolidated 1,567.3 307.5 20%
ITT Industries Non-GAAP Press Release Reconciliation
Segment Operating Income & OI Margin Adjusted for Restructuring
First Quarter of 2005 & 2004
($ Millions)
Adjust for
Q1 2005 Q1 2004 % Change Q1 2005 2005
As As 05 As Restruct-
Reported Reported vs. 04 Reported uring
---------- ---------- ---------- ---------- ----------
Sales and Revenues:
Electronic Components 173.7 157.4 173.7
Defense Electronics &
Services 775.7 506.5 775.7
Fluid Technology 639.6 574.9 639.6
Motion & Flow Control 297.6 274.0 297.6
Intersegment
eliminations (3.5) (1.7) (3.5)
Total Ongoing segments 1,883.1 1,511.1 1,883.1
Dispositions and other -- -- --
Total Sales and Revenues 1,883.1 1,511.1 1,883.1
Operating Margin:
Electronic Components 0.6% 4.6% 0.6%
Defense Electronics &
Services 10.0% 9.6% 10.0%
Fluid Technology 8.8% 9.2% 8.8%
Motion & Flow Control 13.0% 14.3% 13.0%
Total Ongoing Segments 9.2% 9.8% 9.2%
Income:
Electronic Components 1.1 7.3 -84.9% 1.1 7.3
Defense Electronics &
Services 77.8 48.7 59.8% 77.8 0.0
Fluid Technology 56.0 52.7 6.3% 56.0 6.5
Motion & Flow Control 38.6 39.1 -1.3% 38.6 5.6
Total Segment Operating
Income 173.5 147.8 17.4% 173.5 19.4
ITT Industries Non-GAAP Press Release Reconciliation
Segment Operating Income & OI Margin Adjusted for Restructuring
First Quarter of 2005 & 2004
($ Millions)
Adjust % Change
Q1 2005 Q1 2004 for 2004 Q1 2004 Adj.
As As Restruct- As 05 vs.
Adjusted Reported uring Adjusted 04
---------- ---------- ---------- ---------- ----------
Sales and Revenues:
Electronic Components 173.7 157.4 157.4
Defense Electronics
& Services 775.7 506.5 506.5
Fluid Technology 639.6 574.9 574.9
Motion & Flow Control 297.6 274.0 274.0
Intersegment
eliminations (3.5) (1.7) (1.7)
Total Ongoing segments 1,883.1 1,511.1 1,511.1
Dispositions and other -- -- --
Total Sales and Revenues 1,883.1 1,511.1 1,511.1
Operating Margin:
Electronic Components 4.8% 4.6% 5.5% (70)BP
Defense Electronics &
Services 10.0% 9.6% 9.6% 40 BP
Fluid Technology 9.8% 9.2% 9.7% 10 BP
Motion & Flow Control 14.9% 14.3% 14.3% 60 BP
Total Ongoing Segments 10.2% 9.8% 10.1%
Income:
Electronic Components 8.4 7.3 1.3 8.6 -2.3%
Defense Electronics &
Services 77.8 48.7 0.0 48.7 59.8%
Fluid Technology 62.5 52.7 3.1 55.8 12.0%
Motion & Flow Control 44.2 39.1 0.2 39.3 12.5%
Total Segment Operating
Income 192.9 147.8 4.6 152.4 26.6%
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Adjusted Net Income & EPS
First Quarter of 2005 & 2004
($ Millions, except EPS and shares)
Q1 2005 Q1 2005 Q1 2005 Q1 2004 Q1 2004 Q1 2004
As Adjust- As As Adjust- As
Reported ments Adjusted Reported ments Adjusted
---------- ---------- ---------- ---------- ---------- ----------
Segment
Operating
Income 173.5 19.4 #A 192.9 147.8 4.6 #G 152.4
Interest
Income
(Expense) (5.9) (5.6)#B (11.5) (1.1) (2.9)#H (4.0)
Other
Income
(Expense) (5.0) -- (5.0) (3.6) -- (3.6)
Gain on
sale of
Assets -- -- -- -- -- --
Corporate
(Expense) (21.2) (0.7)#C (21.9) (17.4) 0.1 #I (17.3)
Income
from
Continuing
Operations
before Tax 141.4 13.1 154.5 125.7 1.8 127.5
Income
Tax Items (29.6)#D (29.6) (2.3)#J (2.3)
Income
Tax Expense (14.2) (4.1)#E (18.3) (36.7) (0.6)#K (37.3)
Total
Tax
Expense (14.2) (33.7) (47.9) (36.7) (2.9) (39.6)
Income from
Continuing
Operations 127.2 (20.6) 106.6 89.0 (1.1) 87.9
Income from
Discontinued
Operations (10.7) 10.7 #F 0.0 (0.1) 0.1 #L 0.0
Net
Income 116.5 (9.9) 106.6 88.9 (1.0) 87.9
Diluted EPS 1.24 (0.11) 1.13 0.94 (0.01) 0.93
#A - Remove Restructuring Expense of $19.4M
#B - Remove Interest Income Due to Tax Refund ($5.6M)
#C - Remove Other Refund ($0.7M)
#D - Remove Tax Refund of ($29.6M)
#E - Remove Tax Benefit on Special Items of ($13.1M)
#F - Remove D.O. Income of $10.7M
#G - Remove Restructuring Expense of $4.6M
#H - Remove Interest Income Due to Tax Refund ($2.9M)
#I - Remove Restructuring Expense of $0.1M
#J - Remove Tax Refund of ($2.3M)
#K - Remove Tax Benefit on Special Items of ($1.8M)
#L - Remove D.O. Income of $0.1M
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Adjusted Net Income & EPS
First Quarter of 2005 & 2004
($ Millions, except EPS and shares)
Change Percent Change
2005 vs. 2004 2005 vs. 2004
As Adjusted As Adjusted
------------- --------------
Segment Operating Income
Interest Income (Expense)
Other Income (Expense)
Gain on sale of Assets
Corporate (Expense)
Income from Continuing Operations
before Tax
Income Tax Items
Income Tax Expense
Total Tax Expense
Income from Continuing Operations
Income from Discontinued Operations
Net Income 18.7 21%
Diluted EPS $ 0.20 22%
ITT Industries Non-GAAP Press Release Reconciliation
Cash From Operating Activities vs. Free Cash Flow
First Quarter of 2005 & 2004
($ Millions)
1st Qtr 05 1st Qtr 04
---------- ----------
Income from Continuing Ops 127.2 89.0
Depreciation 47.1 43.7
Amortization 8.4 4.9
Working Capital (86.5) (118.0)
Pension Pre-funding (100.0) (100.0)
Other 16.2 (34.0)
Cash from Operations 12.4 (114.4)
Capital Expenditures (30.4) (28.9)
Pension Pre-funding 100.0 100.0
Free Cash Flow 82.0 (43.3)
ITT Industries Non-GAAP Press Release Reconciliation
Cash From Operating Activities vs. Free Cash Flow
Second Quarter & Full Year 2005
Free Cash Flow Q2 2005
-----------------------
Lower Upper
---------- ----------
Cash from Operations 140.0 165.0
Capital Expenditures (90.0) (90.0)
Pension Prefunding 100.0 100.0
Free Cash Flow 150.0 175.0
Free Cash Flow FY 2005
-----------------------
Lower Upper
---------- ----------
Cash from Operations 600.0 650.0
Capital Expenditures (200.0) (200.0)
Pension Prefunding 100.0 100.0
Free Cash Flow 500.0 550.0
ITT Industries Non-GAAP Press Release Reconciliation
Reported vs. Adjusted Net Income & EPS
Full Year of 2005 & 2004
Full Year 2005 EPS**
------------------------------------------
Full Year
Lower Limit Upper Limit 2004 EPS**
------------ ------------ ------------
As Reported* 5.21 5.36 4.58
Adjustments
Restructuring 0.14 0.14 0.28
Interest (0.04) (0.04) (0.03)
Tax Settlement (0.32) (0.32) (0.17)
Gain on Sale of Investments -- -- (0.15)
Discontinued Operations 0.11 0.11 0.05
Adjusted Net Income 5.10 5.25 4.56
*Amount represents projected figures for full year 2005
** Represents diluted EPS
SOURCE ITT Industries, Inc.
-0- 04/29/2005
/CONTACT: Tom Glover, ITT Industries, Inc., +1-914-641-2160,
or tom.glover@itt.com/
/Web site: http://www.itt.com
http://www.thenewsmarket.com/ITT /