Entity Information
Entity Information (USD $) | |
In Millions | 6 Months Ended
Jun. 30, 2009 |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-06-30 |
Entity Information [Line Items] | |
Entity Registrant Name | ITT Corporation |
Entity Central Index Key | 0000216228 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $8,119 |
Entity Listings [Line Items] | |
Entity Common Stock, Shares Outstanding | 182.4 |
103500 - Consolidated Condensed
103500 - Consolidated Condensed Income Statements (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Product Sales | 2129.3 | 2420.1 | $4,095 | 4642.9 |
Service Revenues | 650.7 | 644 | 1242.1 | 1227.6 |
Total Sales and Revenues | 2,780 | 3064.1 | 5337.1 | 5870.5 |
Costs of Product Sales | 1438.1 | 1636.9 | 2808.9 | 3171.2 |
Costs of Service Revenues | 563.1 | 560.1 | 1080.3 | 1071.3 |
Total Costs of Sales and Revenues | 2001.2 | 2,197 | 3889.2 | 4242.5 |
Gross Profit | 778.8 | 867.1 | 1447.9 | 1,628 |
Selling, General and Administrative Expenses | 393.9 | 445.8 | 777.9 | 866.4 |
Research and Development Expenses | 57.3 | 59.2 | 110.2 | 111.8 |
Restructuring and Asset Impairment Charges, Net | 20.4 | 7.3 | 31.1 | 10.9 |
Operating Income (Loss) | 307.2 | 354.8 | 528.7 | 638.9 |
Interest Expense | 22.9 | 31.4 | 49.3 | 72 |
Interest Income | 3.8 | 7.9 | 8.1 | 16.3 |
Miscellaneous Expense, Net | 2.5 | 3.7 | 5.4 | 6.7 |
Income (Loss) from Continuing Operations Before Income Tax Expense | 285.6 | 327.6 | 482.1 | 576.5 |
Income Tax Expense (Benefit) | 83 | 103.3 | 93 | 181.3 |
Income (Loss) from Continuing Operations | 202.6 | 224.3 | 389.1 | 395.2 |
Income (Loss) from Discontinued Operations, Net of Tax | -1.2 | -3.3 | -3.6 | -2.3 |
Net Income (Loss) | 201.4 | $221 | 385.5 | 392.9 |
Earnings Per Share - Basic: | ||||
Income (Loss) from Continuing Operations, Per Basic Share | 1.11 | 1.23 | 2.13 | 2.17 |
Income (Loss) from Discontinued Operations, Net of Tax, Per Basic Share | -0.01 | -0.02 | -0.02 | -0.01 |
Net Income, Per Basic Share | 1.1 | 1.21 | 2.11 | 2.16 |
Earnings Per Share - Diluted: | ||||
Income (Loss) from Continuing Operations, Per Diluted Share | 1.1 | 1.21 | 2.12 | 2.14 |
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Share | $0 | -0.02 | -0.02 | -0.01 |
Net Income, Per Diluted Share | 1.1 | 1.19 | 2.1 | 2.13 |
Cash Dividends Declared Per Common Share | 0.2125 | 0.175 | 0.425 | 0.35 |
Average Common Shares Outstanding, Basic | 182.5 | 182.3 | 182.3 | 182 |
Average Common Shares Outstanding, Diluted | 183.6 | 184.9 | 183.4 | 184.6 |
103600 - Consolidated Condensed
103600 - Consolidated Condensed Balance Sheets (USD $) | |||||||||||||||||||
In Millions | Jun. 30, 2009
| Dec. 31, 2008
| |||||||||||||||||
Assets | |||||||||||||||||||
Cash and Cash Equivalents | $1,019 | 964.9 | |||||||||||||||||
Receivables, Net | 1900.3 | 1961.1 | |||||||||||||||||
Inventory, Net | 858 | 803.8 | |||||||||||||||||
Current Deferred Tax Assets | 204.3 | 203.4 | |||||||||||||||||
Other Current Assets | 151.7 | 131 | |||||||||||||||||
Total Current Assets | 4133.3 | 4064.2 | |||||||||||||||||
Property, Plant and Equipment, Net | 984.5 | 993.9 | |||||||||||||||||
Non-Current Deferred Tax Assets | 590.1 | 608.5 | |||||||||||||||||
Goodwill | 3847.8 | 3831.3 | |||||||||||||||||
Other Intangible Assets, Net | 574.9 | 616.5 | |||||||||||||||||
Other Assets | 421.3 | 365.8 | |||||||||||||||||
Total Non-Current Assets | 6418.6 | 6,416 | |||||||||||||||||
Total Assets | 10551.9 | 10480.2 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Accounts Payable | 1316.4 | 1234.6 | |||||||||||||||||
Accrued Expenses | 945.8 | 991.2 | |||||||||||||||||
Accrued Taxes | 67.3 | 30.2 | |||||||||||||||||
Short-Term Debt and Current Maturities of Long-Term Debt | 355.3 | 1,679 | |||||||||||||||||
Pension and Postretirement Benefits | 68.8 | 68.8 | |||||||||||||||||
Current Deferred Tax Liabilities | 27.2 | 26.7 | |||||||||||||||||
Total Current Liabilities | 2780.8 | 4030.5 | |||||||||||||||||
Pension Benefits | 1694.4 | 1689.9 | |||||||||||||||||
Postretirement Benefits Other Than Pensions | 447.7 | 451.7 | |||||||||||||||||
Long-Term Debt | 1456.4 | 467.9 | |||||||||||||||||
Other Liabilities | 713.6 | 780.3 | |||||||||||||||||
Total Non-Current Liabilities | 4312.1 | 3389.8 | |||||||||||||||||
Total Liabilities | 7092.9 | 7420.3 | |||||||||||||||||
Shareholders' Equity: | |||||||||||||||||||
Common Stock | 181.1 | [1] | 180.6 | [1] | |||||||||||||||
Retained Earnings | 4533.3 | 4,203 | |||||||||||||||||
Accumulated Other Comprehensive Income (Loss): | |||||||||||||||||||
Pension and Other Benefits | -1514.1 | -1534.1 | |||||||||||||||||
Cumulative Translation Adjustments | 258 | 209.8 | |||||||||||||||||
Unrealized Gain on Investment Securities | 0.7 | 0.6 | |||||||||||||||||
Total Accumulated Other Comprehensive Income (Loss) | -1255.4 | -1323.7 | |||||||||||||||||
Total Shareholders' Equity | 3,459 | 3059.9 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | 10551.9 | 10480.2 | |||||||||||||||||
[1]Shares outstanding include unvested restricted common stock of 1.3 and 1.1 at June 30, 2009 and December 31, 2008, respectively. |
103610 - Consolidated Condensed
103610 - Consolidated Condensed Balance Sheet (Parenthetical) (USD $) | ||
Share data in Millions | Jun. 30, 2009
| Dec. 31, 2008
|
Common Stock Parenthetical Information: | ||
Common Stock, Par or Stated Value Per Share | 1 | 1 |
Common Stock, Shares Authorized | 500 | 500 |
Common Stock, Shares, Outstanding | 182.4 | 181.7 |
103700 - Consolidated Condensed
103700 - Consolidated Condensed Statement of Cash Flows (USD $) | ||
In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
Operating Activities | ||
Net Income | 385.5 | 392.9 |
Income (Loss) from Discontinued Operations, Net of Tax | -3.6 | -2.3 |
Income (Loss) from Continuing Operations | 389.1 | 395.2 |
Adjustments to Income from Continuing Operations: | ||
Depreciation and Amortization | 142.8 | 148.6 |
Stock-based Compensation | 15.8 | 15 |
Restructuring and Asset Impairment Charges, Net | 31.1 | 10.9 |
Payments for Restructuring | (46) | -28.7 |
Change in Receivables | 67.3 | -68.4 |
Change in Inventories | -49.5 | (15) |
Change in Accounts Payable | 59.9 | 23.6 |
Change in Accrued Liabilities | -9.3 | 11.2 |
Change in Accrued and Deferred Taxes | -11.5 | 16.5 |
Change in Other Current and Noncurrent Assets | -48.8 | -29.1 |
Change in Other Current and Noncurrent Liabilities | (1) | 5.4 |
Other Operating Activities, Net | 8.9 | 5 |
Net Cash - Operating Activities | 548.8 | 490.2 |
Investing Activities | ||
Capital Expenditures | -87.2 | -79.4 |
Acquisitions, Net of Cash | -34.6 | (229) |
Proceeds from Sale of Assets and Businesses | 13.9 | 2.3 |
Other Investing Activities, Net | 4.1 | -0.9 |
Net Cash - Investing Activities | -103.8 | (307) |
Financing Activities | ||
Short-term Debt, Net | -1322.6 | -1143.5 |
Long-term Debt Repaid | -3.8 | -14.5 |
Long-term Debt Issued | 992.1 | 0.5 |
Proceeds from Issuance of Common Stock | 1.6 | 22 |
Dividends Paid | -70.4 | -57.2 |
Tax Impact from Stock Option Exercises and Restricted Stock Lapses | -0.7 | 3.5 |
Other Financing Activities, Net | -0.3 | -2.7 |
Net Cash - Financing Activities | -404.1 | -1191.9 |
Exhange Rate Effects on Cash and Cash Equivalents | 14.5 | 54.8 |
Net Cash from Discontinued Operations | -1.3 | -8.4 |
Net Change in Cash and Cash Equivalents | 54.1 | -962.3 |
Cash and Cash Equivalents, Beginning of Period | 964.9 | 1,840 |
Cash and Cash Equivalents, End of Period | 1,019 | 877.7 |
Supplemental Disclosures of Cash Flow Information | ||
Cash Paid During the Year for Interest | 42.2 | 64.3 |
Cash Paid During the Year for Income Taxes | 105.1 | 161.3 |
Basis of Presentation
Basis of Presentation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation [Text Block] | 1)Basis of Presentation The unaudited consolidated condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such SEC rules. Unless the context otherwise indicates, references herein to ITT, the Company, and such words as we, us, and our include ITT Corporation and its subsidiaries. ITT believes that the disclosures made are adequate to make the information presented not misleading. ITT consistently applied the accounting policies described in ITTs 2008 Annual Report on Form10-K in preparing these unaudited financial statements, with exception to accounting pronouncements adopted during 2009 as described within Note 2, Recent Accounting Pronouncements. The preparation of these financial statements requires management to make certain estimates and assumptions that affect the amounts reported, and such estimates could differ from actual results. These financial statements should be read in conjunction with the financial statements and notes thereto included in ITTs 2008 Annual Report on Form10-K. ITTs 2009 and 2008 quarterly financial periods end on the Saturday closest to the last day of the quarter, except for the last quarterly period of the fiscal year, which ends on December31st. For simplicity of presentation, the quarterly financial statements included herein are presented as ending on the last day of the quarter. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements [Text Block] | 2)Recent Accounting Pronouncements Pronouncements Not Yet Adopted In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)No.168, The FASB Accounting Standards CodificationTMand the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No.162 (SFAS 168), which establishes the FASB Accounting Standards Codification as the source of authoritative GAAP in the United States. SFAS 168 is effective for financial statements issued for interim or annual periods ending after September 15, 2009. The adoption of SFAS 168 will not have a material impact on our consolidated financial statements. In June2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R) (SFAS167). SFAS 167 amends FIN 46(R), Consolidation of Variable Interest Entities (revised December2003)an interpretation of ARB No.51, to require an enterprise to perform ongoing reassessments to determine whether the enterprises variable interest or interests give it a controlling financial interest in a variable interest entity (VIE). The primary beneficiary of a variable interest entity is defined as one with the power to direct the activities of a VIE that most significantly impact the entitys economic performance and the obligation to absorb losses of the entity that could potentially be significant to the variable interest. SFAS 167 is effective on January 1, 2010. We are currently evaluating the potential impact, if any, that the adoption of SFAS 167 will have on our consolidated financial statements. In December 2008, the FASB issued FASB Staff Position (FSP) No.FAS132(R)-1, Employers Disclosure about Postretirement Benefit Plan Assets,(FSP 132(R)-1), which amends SFASNo.132(R), Employers Disclosure about Pensions and Other Postretirement Plans, to require more disclosures about employers plan assets of a defined benefit pension or other postretirement plan, including employers investing strategies, major categories of plan assets, concentrations of risk within plan assets, information about fair value measurements of plan assets that are similar to the disclosures about fair value measurements required by SFAS No.157, Fair Value Measurements (SFAS157), and valuation techniques used to measure the fair value of plan assets. FSP 132(R)-1 is effective for fiscal years ending after December15, 2009 with early application permitted. FSP 132(R)-1 will not have an impact to our financial results as the pronouncement is disclosure only in nature. Recently Adopted Accounting Pronouncements In May 2009, the FASB issued SFASNo.165, Subsequent Events (SFAS 165), which sets forth the general standards of accounting for, and the disclosure of, events that occur after the balance sheet date but before financial statements are issued or available to be issued. SFAS 165 defines the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition in the financial statements, identifies the circumstances under which an entity should recognize events or transactions |
Stock-Based and Long-Term Incen
Stock-Based and Long-Term Incentive Employee Compensation | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Stock-Based Compensation and Long-Term Incentive Employee Compensation [Abstract] | |
Stock-Based Compensation and Long-Term Incentive Employee Compensation [Text Block] | 3)Stock-Based and Long-Term Incentive Employee Compensation Stock-based and long-term incentive employee compensation cost reduced consolidated results of operations as follows: Three Months Ended June30 Six Months Ended June30 2009 2008 2009 2008 Pre-tax compensation cost $ 10.2 $ 24.0 $ 17.9 $ 26.8 Tax benefit 3.2 8.1 5.6 8.8 Compensation cost, net of tax $ 7.0 $ 15.9 $ 12.3 $ 18.0 At June30, 2009, there was $54.0 and $16.5 of total unrecognized compensation cost for the stock-based and long-term incentive plans, respectively, which are expected to be recognized ratably over a remaining weighted-average period of 2.0years and 1.3years. During the first six months of 2009, payments totaling $21.1 were made to settle the Long-Term Incentive Plan 2006 annual grant liability. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Restructuring and Asset Impairment Charges [Abstract] | |
Restructuring and Related Activities Disclosure [Text Block] | 4)Restructuring and Asset Impairment Charges Second Quarter 2009 Restructuring Activities During the second quarter of 2009, we recorded a net restructuring charge of $20.4, reflecting costs of $13.4 related to new actions and $7.5 related to prior actions, as well as the reversal of $0.5 of restructuring accruals that management determined would not be required. The charges associated with actions announced during the second quarter of 2009 primarily represent severance costs associated with headcount reductions within the Fluid Technology and Motion Flow Control business segments. Planned position eliminations relating to current quarter actions total 375, including 211 factory workers, 160 office workers and four management employees. The costs recognized during the quarter for previous actions reflect additional severance and lease cancellation costs. 2009 Actions Three Months Ended June30 Components of Charge Severance Other Employee Related Costs Asset Write-offs Total Planned Position Eliminations Prior Actions Additional Costs Reversal of Accruals Fluid Technology $ 6.9 $ $ $ 6.9 138 $ 4.2 $ (0.1) Motion Flow Control 4.5 0.3 0.4 5.2 191 0.8 (0.2) Defense Electronics Services 0.6 0.6 39 2.5 Corporate and Other 0.5 0.2 0.7 7 (0.2) $ 12.5 $ 0.5 $ 0.4 $ 13.4 375 $ 7.5 $ (0.5) First Six Months 2009 Restructuring Activities During the first six months of 2009, we recorded a net restructuring charge of $31.1, reflecting costs of $22.7 related to new actions and $9.1 related to prior years plans, as well as the reversal of $0.7 of restructuring accruals that management determined would not be required. The charges associated with actions announced during the first six months of 2009 primarily represent severance costs associated with reductions in headcount within the Fluid Technology and Motion Flow Control business segments. Planned position eliminations relating to this period total 526, including 222 factory workers, 287 office workers and 17 management employees. The costs recognized during the first half of 2009 related to prior years plans of $9.1 primarily reflect additional severance and lease cancellation costs. 2009 Actions Six Months Ended June30 Components of Charge Severance Other Employee Related Costs Lease Cancellation Other Costs Asset Write-offs Total Planned Position Eliminations Prior Years Plans Additional Costs Reversal of Accruals Fluid Technology $ 14.0 $ 0.2 $ 0.9 $ 0.3 $ 15.4 253 $ 3.8 $ (0.3) Motion Flow Control 5.2 0.3 0.4 5.9 223 2.5 (0.2) Defense Electronics Services 0.6 0.6 39 2.8 Corp |
Employee Benefit Plans
Employee Benefit Plans | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Employee Benefit Plans [Abstract] | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | 5)Employee Benefit Plans Components of net periodic benefit cost were as follows: Pension Other Benefits Three Months Ended June 30 Six Months Ended June 30 Three Months Ended June 30 Six Months Ended June 30 2009 2008 2009 2008 2009 2008 2009 2008 Service cost $ 25.6 $ 24.2 $ 51.2 $ 48.4 $ 2.0 $ 2.1 $ 4.0 $ 4.2 Interest cost 81.6 81.6 163.2 163.3 10.6 10.7 21.2 21.4 Expected return on plan assets (108.4) (110.4) (216.8) (220.7) (4.5) (6.9) (9.0) (13.8) Amortization of prior service cost 0.9 0.8 1.8 1.6 0.9 0.9 1.8 1.8 Amortization of actuarial loss 10.4 3.7 20.8 7.5 3.8 1.2 7.6 2.3 Total net periodic benefit cost $ 10.1 $ (0.1) $ 20.2 $ 0.1 $ 12.8 $ 8.0 $ 25.6 $ 15.9 ITT contributed approximately $5.2 and $10.6 to its various plans during the second quarter and first six months of 2009, respectively. Additional contributions ranging between $38.0 and $43.0 are expected over the balance of 2009. See Note16, Employee Benefit Plans, in the Notes to Consolidated Financial Statements of the 2008 Annual Report on Form10-K for additional details. |
Comprehensive Income
Comprehensive Income | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Comprehensive Income [Abstract] | |
Comprehensive Income [Text Block] | 6)Comprehensive Income Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Net income $ 201.4 $ 221.0 $ 385.5 $ 392.9 Other comprehensive income (loss): Foreign currency translation adjustments 119.7 (6.5) 48.2 93.2 Changes in pension and other benefit plans 10.1 4.1 20.0 8.3 Unrealized gain on investment securities 0.1 0.1 Other comprehensive income (loss) 129.9 (2.4) 68.3 101.5 Comprehensive income $ 331.3 $ 218.6 $ 453.8 $ 494.4 |
Earnings Per Share
Earnings Per Share | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Earnings Per Share Note [Abstract] | |
Earnings Per Share [Text Block] | 7)Earnings Per Share A reconciliation of the data used in the calculation of basic and diluted earnings per share computations for income from continuing operations is as follows: Three Months Ended June 30 Six Months Ended June 30 2009 2008 2009 2008 Income from continuing operations $ 202.6 $ 224.3 $ 389.1 $ 395.2 Average common shares outstanding 182.5 182.3 182.3 182.0 Add: Impact of stock options and restricted stock 1.1 2.6 1.1 2.6 Average common shares outstanding on a diluted basis 183.6 184.9 183.4 184.6 Basic earnings per share $ 1.11 $ 1.23 $ 2.13 $ 2.17 Diluted earnings per share $ 1.10 $ 1.21 $ 2.12 $ 2.14 Anti-dilutive stock options 4.6 1.1 4.4 0.9 Average exercise price of anti-dilutive stock options $ 47.25 $ 55.22 $ 47.90 $ 55.69 Prior year earnings per share amounts have been adjusted for the adoption of FSP 03-6-1. See Note 2 for further details on the impact of adoption. |
Receivables, Net
Receivables, Net | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Receivables, Net [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 8)Receivables, Net June30, 2009 December31, 2008 Trade $ 1,864.6 $ 1,909.4 Other 81.0 92.9 Less: allowance for doubtful accounts and cash discounts (45.3) (41.2) $ 1,900.3 $ 1,961.1 |
Inventories, Net
Inventories, Net | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Inventories, Net [Abstract] | |
Inventory Disclosure [Text Block] | 9)Inventories, Net June30, 2009 December31, 2008 Finished goods $ 188.6 $ 196.2 Work in process 369.9 323.0 Raw materials, parts and other 368.4 365.5 Less: progress payments (68.9) (80.9) $ 858.0 $ 803.8 |
Plant, Property and Equipment,
Plant, Property and Equipment, Net | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Plant, Property and Equipment, Net [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 10) Plant, Property and Equipment, Net June30, 2009 December31, 2008 Land and improvements $ 57.2 $ 59.0 Buildings and improvements 607.6 575.9 Machinery and equipment 1,654.0 1,620.2 Furniture, fixtures and office equipment 231.7 230.9 Construction work in progress 106.5 132.4 Other 78.8 82.3 2,735.8 2,700.7 Less: accumulated depreciation and amortization (1,751.3) (1,706.8) $ 984.5 $ 993.9 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Goodwill and Other Intangible Assets, Net [Abstract] | |
Goodwill and Other Intangible Assets, Net [Text Block] | 11)Goodwill and Other Intangible Assets, Net Changes in the carrying amount of goodwill for the six months ended June30, 2009 by business segment are as follows: Defense Electronics Services Fluid Technology Motion Flow Control Corporate and Other Total Balance as of January1, 2009 $ 2,210.6 $ 1,122.3 $ 493.4 $ 5.0 $ 3,831.3 Goodwill acquired during the period 15.5 15.5 Adjustments to purchase price allocations (0.8) (0.8) Other net, including foreign currency translation (2.2) 12.8 (8.8) 1.8 Balance as of June30, 2009 $ 2,208.4 $ 1,149.8 $ 484.6 $ 5.0 $ 3,847.8 Information regarding other intangible assets is as follows: June30, 2009 December31, 2008 Gross Carrying Amount Accumulated Amortization Other Intangibles Net Gross Carrying Amount Accumulated Amortization Other Intangibles Net Finite-lived intangibles: Customer relationships $ 642.4 $ (194.1) $ 448.3 $ 643.7 $ (149.9) $ 493.8 Proprietary technology 67.7 (17.8) 49.9 68.4 (20.2) 48.2 Trademarks 33.2 (6.0) 27.2 32.1 (4.9) 27.2 Patents and other 58.4 (27.2) 31.2 54.7 (25.7) 29.0 Indefinite-lived intangibles: Brands and trademarks 18.3 18.3 18.3 18.3 $ 820.0 $ (245.1) $ 574.9 $ 817.2 $ (200.7) $ 616.5 Amortization expense related to intangible assets for the six month periods ending June30, 2009 and 2008 was $50.9 and $56.0, respectively. Estimated amortization expense for intangible assets is $78.1, $68.6, $59.1, $43.1 and $38.3 for each year from 2010 to 2014, respectively. |
Other Assets
Other Assets | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Other Assets [Abstract] | |
Other Asset [Text Block] | 12) Other Assets June30, 2009 December31, 2008 Insurance receivables $ 208.4 $ 198.3 Other employee benefit-related assets 70.5 61.2 Other long-term third party receivables-net 46.3 46.7 Capitalized software costs 40.8 26.4 Other 55.3 33.2 $ 421.3 $ 365.8 |
Debt
Debt | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Debt [Abstract] | |
Debt Disclosure [Text Block] | 13)Debt June30, 2009 December31, 2008 Commercial paper $ 338.6 $ 1,618.7 Short-term loans 6.3 47.0 Current maturities of long-term debt and other 10.4 13.3 Short-term debt and current maturities of long-term debt 355.3 1,679.0 Long-term debt, including noncurrent capital leases 1,404.0 413.2 Deferred gain on interest rate swaps 52.4 54.7 Long-term debt 1,456.4 467.9 Total debt $ 1,811.7 $ 2,146.9 In May 2009, the Company issued $500.0 of 4.9% Senior Notes due May 1, 2014 and $500.0 of 6.125% Senior Notes due May 1, 2019 (collectively, the Notes). The issuance resulted in gross proceeds of $998.3, offset by $6.2 in debt issuance costs. We may redeem the Notes in whole or in part at any time at a redemption price equal to the greater of (i) 100% of the principal amount of such Notes and (ii) the sum of the present value of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate plus 50 basis points, plus in each case accrued and unpaid interest to the date of redemption. If the Company experiences a change of control, the Company will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount plus accrued interest. The Notes are senior unsecured obligations and rank equally with all existing and future senior unsecured indebtedness. The fair value of long-term debt excluding the deferred gain on interest rate swaps was $1,417.3 and $450.4 as of June 30, 2009 and December31, 2008, respectively. The market approach was utilized in determining the fair value of our long-term debt, specifically quoted prices in active markets (Level 1 inputs) and other than quoted prices that are observable (Level 2 inputs), under the SFAS 157 fair value hierarchy. |
Other Liabilities
Other Liabilities | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Other Liabilities [Abstract] | |
Other Liabilities Disclosure [Text Block] | 14) Other Liabilities June30, 2009 December31, 2008 Product liability, guarantees and other legal matters $ 280.2 $ 275.1 Deferred income taxes and other tax-related accruals 113.7 182.9 Compensation and other employee-related benefits 119.8 133.8 Environmental 126.2 119.5 Other 73.7 69.0 $ 713.6 $ 780.3 |
Uncertain Tax Positions
Uncertain Tax Positions | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Uncertain Tax Positions [Abstract] | |
Summary of Income Tax Contingencies [Text Block] | 15)Uncertain Tax Positions In accordance with the FASB Interpretation No.48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No.109 (FIN48), we recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. As of June30, 2009 and December31, 2008, we had $143.8 and $144.9, respectively, of total unrecognized tax benefits. The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $75.8 and $76.9, as of June30, 2009 and December31, 2008, respectively. We do not believe that the total amount of unrecognized tax benefits will significantly change within twelve months of the reporting date. We classify interest relating to tax matters as a component of interest expense and tax penalties as a component of income tax expense in our Consolidated Condensed Income Statement. We have accrued $22.1 and $28.1 for payment of interest and penalties as of June30, 2009 and December31, 2008, respectively. |
Commitments and Contingencies
Commitments and Contingencies | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 16)Commitments and Contingencies ITT Corporation and its subsidiaries from time to time are involved in legal proceedings that are incidental to the operation of their businesses. Some of these proceedings allege damages relating to environmental liabilities, intellectual property matters, copyright infringement, personal injury claims, employment and pension matters, government contract issues and commercial or contractual disputes, sometimes related to acquisitions or divestitures. ITT will continue to vigorously defend itself against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information including our assessment of the merits of the particular claim, as well as our current reserves and insurance coverage, we do not expect that such legal proceedings will have any material adverse impact on the cash flow, results of operations, or financial condition of ITT on a consolidated basis in the foreseeable future, unless otherwise noted below. See Critical Accounting Estimates within Item7. Managements Discussion and Analysis of Financial Condition and Results of Operations, of the ITT 2008 Annual Report on Form10-K, for a discussion of contingent liabilities, including the related estimates, assumptions, uncertainties, and potential financial statement impact from revisions to our estimates. Environmental In the ordinary course of business, ITT is subject to federal, state, local, and foreign environmental laws and regulations. ITT is responsible, or is alleged to be responsible, for ongoing environmental investigation and remediation of sites in various countries. These sites are in various stages of investigation and/or remediation and in many of these proceedings ITTs liability is considered de minimis. ITT has received notification from the U.S.Environmental Protection Agency, and from similar state and foreign environmental agencies, that a number of sites formerly or currently owned and/or operated by ITT, and other properties impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation and/or remediation. These sites include instances where ITT has been identified as a potentially responsible party under federal and state environmental laws and regulations. Accruals for environmental matters are recorded on a site by site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. ITTs accrued liabilities for these environmental matters represent the best estimates related to the investigation and remediation of environmental media such as water, soil, soil vapor, air and structures, as well as related legal fees. These estimates, and related accruals, are reviewed periodically and updated for progress of investigation and remediation efforts and changes in facts and legal circumstances. Liabilities for these environmental expenditures are recorded on an undiscounted basis. It is difficult to estimate the final total costs of investigation and remediation due to vario |
Guarantees, Indemnities and War
Guarantees, Indemnities and Warranties | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Guarantees, Indemnities and Warranties [Abstract] | |
Guarantees, Indemnities and Warranties [Text Block] | 17)Guarantees, Indemnities and Warranties Guarantees Indemnities Since ITTs incorporation in 1920, we have acquired and disposed of numerous entities. The related acquisition and disposition agreements contain various representation and warranty clauses and may provide indemnities for a misrepresentation or breach of the representations and warranties by either party. The indemnities address a variety of subjects; the term and monetary amounts of each such indemnity are defined in the specific agreements and may be affected by various conditions and external factors. Many of the indemnities have expired either by operation of law or as a result of the terms of the agreement. We do not have a liability recorded for the historic indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities. In December of 2007, we entered into a sale leaseback type agreement for our corporate aircraft, with the aircraft leased back under a five-year operating lease. We have provided, under the lease, a residual value guarantee to the counterparty in the amount of $50.2, which is the maximum amount of undiscounted future payments. We are obligated to make payments under the residual value guarantee to the extent the fair value of the aircraft is less than the residual value guarantee upon termination of the agreement. Currently, we project the fair value of the aircraft to be less than the residual value guarantee. Accordingly, we recorded a loss contingency of $5.1 during the first quarter of 2009, which represents the excess of the projected loss over a deferred gain of $5.4 recorded in connection with the sale leaseback transaction. ITT has a number of individually immaterial guarantees outstanding at June30, 2009, that may be affected by various conditions and external forces, some of which could require that payments be made under such guarantees. We do not believe these payments will have any material adverse impact on the financial position, results of operations or cash flow on a consolidated basis in the foreseeable future. Product Warranties ITT warrants numerous products, the terms of which vary widely. In general, ITT warrants its products against defect and specific non-performance. In the automotive businesses, liability for product defects could extend beyond the selling price of the product and could be significant if the defect interrupts production or results in a recall. Changes in the product warranty accrual for the six months ended June30, 2009 were as follows: 2009 Beginning balance January 1 $ 57.4 Accruals for product warranties issued in the period 13.7 Changes in pre-existing warranties(1) (1.5) Payments (13.3) Ending balance June30 $ 56.3 > (1) Includes changes in estimates and foreign currency translation adjustments |
Business Segment Information
Business Segment Information | |
6 Months Ended
Jun. 30, 2009 USD / shares | |
Business Segment Information [Abstract] | |
Segment Reporting Disclosure [Text Block] | 18)Business Segment Information Three Months Ended June30, 2009 Defense Electronics Services Fluid Technology Motion Flow Control Corporate and Other Eliminations Total Product sales $ 997.8 $ 826.7 $ 306.2 $ $ (1.4) $ 2,129.3 Service revenues 606.3 42.4 2.0 650.7 Total sales and revenues $ 1,604.1 $ 869.1 $ 308.2 $ $ (1.4) $ 2,780.0 Operating income (loss) $ 201.3 $ 111.6 $ 33.2 $ (38.9) $ $ 307.2 Operating margin 12.5% 12.8% 10.8% 11.1% Total assets $ 4,372.5 $ 2,942.4 $ 1,343.7 $ 1,893.3 $ $ 10,551.9 Three Months Ended June30, 2008 Defense Electronics Services Fluid Technology Motion Flow Control Corporate and Other Eliminations Total Product sales $ 991.8 $ 989.4 $ 442.1 $ $ (3.2) $ 2,420.1 Service revenues 607.4 36.2 0.4 644.0 Total sales and revenues $ 1,599.2 $ 1,025.6 $ 442.5 $ $ (3.2) $ 3,064.1 Operating income (loss) $ 199.0 $ 138.8 $ 71.3 $ (54.3) $ $ 354.8 Operating margin 12.4% 13.5% 16.1% 11.6% Total assets(1) $ 4,464.5 $ 2,878.3 $ 1,357.8 $ 1,779.6 $ $ 10,480.2 Six Months Ended June30, 2009 Defense Electronics Services Fluid Technology Motion Flow Control Corporate and Other Eliminations Total Product sales $ 1,946.4 $ 1,541.5 $ 610.1 $ $ (3.0) $ 4,095.0 Service revenues 1,166.2 71.9 4.0 1,242.1 Total sales and revenues $ 3,112.6 $ 1,613.4 $ 614.1 $ $ (3.0) $ 5,337.1 Operating income (loss) $ 365.6 $ 180.4 $ 61.1 $ (78.4) $ $ 528.7 Operating margin 11.7% 11.2% 9.9% 9.9% Total assets $ 4,372.5 $ 2,942.4 $ 1,343.7 $ 1,893.3 $ $ 10,551.9 Six Months Ended June30, 2008 Defense Electronics Services Fluid Technology Motion Flow Control Corporate and Other Eliminations Total Product sales $ 1,953.9 $ 1,833.0 $ 862.3 $ $ (6.3) $ 4,642.9 Service revenues 1,152.9 74.0 0.7 1,227.6 Total sales and revenues $ 3,106.8 $ 1,907.0 $ 863.0 $ $ (6.3) $ 5,870.5 Operating income (loss) $ 351.7 $ 240.8 $ 139.4 $ (93.0) $ $ 638.9 Operating margin 11.3% 12.6% 16.2% 10.9% Total assets(1) $ 4,46 |