Exhibit 99.1
ITT Reports Solid 2008 Fourth Quarter and Full-Year Results
- Fourth quarter 2008 revenue up 17 percent year-over-year to $2.9 billion, earnings from continuing operations up 37 percent to 96 cents per share
- Full-year 2008 revenue up 30 percent compared to prior year to $11.7 billion, earnings from continuing operations up 23 percent to $4.23 per share
- Ends 2008 with free cash flow of $871 million, a 112 percent conversion of income from continuing operations
- Previous 2009 earnings per share guidance of $3.60 to $4.00 maintained
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--February 4, 2009--ITT Corporation (NYSE: ITT) today reported 2008 fourth quarter revenue of $2.9 billion and income from continuing operations of $176 million, or 96 cents per share. Excluding special items, income from continuing operations for the quarter was $149 million, or 82 cents per share, up a penny year-over-year as benefits from recent acquisitions and operational improvements offset higher costs from aggressive restructuring and realignment activities.
For the full-year 2008, ITT reported record revenues of $11.7 billion and income from continuing operations of $775 million, or $4.23 per share. Excluding special items, income rose to $741 million, or $4.04 per share, representing 23 percent earnings growth year-over-year. Free cash flow, representing cash from operations less capital expenditures, for the year topped $871 million, a 112 percent conversion of income from continuing operations.
“Despite a global economic environment that deteriorated as the year progressed, our business continued to perform on the strength of a well-balanced portfolio and teams that met the adversity in their markets head on,” said Steve Loranger, ITT’s chairman, president and chief executive officer. “And while we expect 2009 to be more difficult, we take great pride in having achieved another record year of revenue and earnings growth in 2008.”
Loranger added, “We are maintaining our previous 2009 earnings guidance. While the challenges that lie ahead are significant, we believe our leaders are taking the necessary actions to best position the company for these difficult times. And while we’ve made some tough choices in recent months to manage costs aggressively, we remain committed to our long-term strategies and will continue to invest in our future success.”
2008 Fourth Quarter and Full-Year Business Segment Results
Defense Electronics & Services
- Fourth quarter 2008 revenue for the Defense Electronics & Services segment was up 39 percent, compared to the year ago period, to $1.6 billion, on strong organic revenue growth of seven percent. ITT’s Advanced Engineering & Sciences and Night Vision businesses led the growth. Fourth quarter operating income for the segment grew to $188 million, up 50 percent on a comparable basis.
- Full-year 2008 revenue for the segment reached $6.3 billion, up 50 percent over 2007, primarily attributable to eight percent organic revenue growth and the successful integration of EDO Corporation. For the full year, operating income for the segment was $727 million, a 45 percent improvement year-over-year.
- At the close of 2008, the Defense segment had a funded backlog of $5.24 billion, providing good visibility into the year ahead.
Fluid Technology
- ITT’s Fluid Technology segment reported fourth quarter 2008 revenue of $984 million, roughly flat on a year-over-year basis, with solid organic revenue growth of seven percent, offset by the negative impact of foreign currency exchange. Fourth quarter segment operating income was $96 million, which is down 24 percent from the comparable prior year period due primarily to higher costs associated with aggressive restructuring activity during the quarter.
- For the full-year 2008, the segment grew nine percent year-over-year on revenue of $3.8 billion, including solid organic revenue growth of eight percent. The segment generated operating income of $469 million, up eight percent on a comparable basis, as organic growth and productivity improvements more than offset negative impacts from restructuring and foreign currency exchange.
Motion & Flow Control
- Fourth quarter 2008 revenue for the Motion & Flow Control segment was down 12 percent on comparable basis to $327 million. Organic revenue declined nine percent with challenging conditions in many of the segment’s end markets including marine and automotive. The segment reported a fourth quarter operating loss of $4 million, as lower volume, restructuring activity and costs associated with business dispositions during the quarter significantly offset productivity improvements and favorable foreign currency exchange.
- Full-year 2008 revenue for the segment was $1.6 billion, up 19 percent over 2007. For the year, operating income grew two percent on a comparable basis to $192 million.
Investor Call Today
ITT's senior management will host a conference call for investors today at 9:00 a.m. Eastern Standard Time to review fourth quarter and full-year 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) is a diversified high-technology engineering and manufacturing company dedicated to creating more livable environments, enabling communications and providing protection and safety. The company plays an important role in vital markets including water and fluids management, global defense and security, and motion and flow control.
Safe Harbor Statement
Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 ("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 income tax accounting, and changes in generally accepted accounting principles. Recent distress in the financial markets has had an adverse impact on the availability of credit and liquidity sources. Continued market deterioration could jeopardize certain counterparties' obligations, including those of our insurers and financial institutions. 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, 2007, 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 CORPORATION AND SUBSIDIARIES |
CONSOLIDATED CONDENSED INCOME STATEMENTS |
(In millions, except per share) |
(Unaudited) |
| | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, |
| | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | |
| Sales and revenues | | $ | 2,945.0 | | $ | 2,528.7 | | $ | 11,694.8 | | $ | 9,003.3 |
| | | | | | | | |
| Costs of sales and revenues | | | 2,128.3 | | | 1,828.1 | | | 8,439.4 | | | 6,435.0 |
| Selling, general and administrative expenses | | | 440.1 | | | 364.2 | | | 1,723.5 | | | 1,342.7 |
| Research and development expenses | | | 71.8 | | | 52.4 | | | 244.3 | | | 182.3 |
| Restructuring and asset impairment charges, net | | | 61.6 | | | 35.0 | | | 77.5 | | | 66.1 |
| Total costs and expenses | | | 2,701.8 | | | 2,279.7 | | | 10,484.7 | | | 8,026.1 |
| | | | | | | | |
| Operating income | | | 243.2 | | | 249.0 | | | 1,210.1 | | | 977.2 |
| Interest expense | | | 39.5 | | | 46.2 | | | 140.8 | | | 114.9 |
| Interest income | | | 6.7 | | | 18.6 | | | 31.3 | | | 49.6 |
| Miscellaneous expense (income), net | | | 2.5 | | | 2.8 | | | 13.1 | | | 13.4 |
| Income from continuing operations before income taxes | | | 207.9 | | | 218.6 | | | 1,087.5 | | | 898.5 |
| Income tax expense | | | 32.4 | | | 90.2 | | | 312.3 | | | 265.5 |
| Income from continuing operations | | | 175.5 | | | 128.4 | | | 775.2 | | | 633.0 |
| Discontinued operations, net of tax | | | 10.0 | | | 29.9 | | | 19.5 | | | 109.1 |
| Net income | | $ | 185.5 | | $ | 158.3 | | $ | 794.7 | | $ | 742.1 |
| | | | | | | | |
| Earnings Per Share: | | | | | | | | |
| Income from continuing operations: | | | | | | | | |
| Basic | | $ | 0.97 | | $ | 0.71 | | $ | 4.29 | | $ | 3.51 |
| Diluted | | $ | 0.96 | | $ | 0.70 | | $ | 4.23 | | $ | 3.44 |
| Discontinued operations: | | | | | | | | |
| Basic | | $ | 0.06 | | $ | 0.17 | | $ | 0.11 | | $ | 0.60 |
| Diluted | | $ | 0.06 | | $ | 0.16 | | $ | 0.10 | | $ | 0.59 |
| Net income: | | | | | | | | |
| Basic | | $ | 1.03 | | $ | 0.88 | | $ | 4.40 | | $ | 4.11 |
| Diluted | | $ | 1.02 | | $ | 0.86 | | $ | 4.33 | | $ | 4.03 |
| | | | | | | | |
| | | | | | | | |
| Average Common Shares — Basic | | | 180.5 | | | 180.5 | | | 180.7 | | | 180.6 |
| Average Common Shares — Diluted | | | 182.4 | | | 183.9 | | | 183.4 | | | 184.0 |
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ITT CORPORATION AND SUBSIDIARIES |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(In millions) |
(Unaudited) |
| | | | |
| | December 31, | | December 31, |
| | 2008 | | 2007 |
| | | |
| Assets | | | | |
| Current Assets: | | | | |
| Cash and cash equivalents | | $ | 964.9 | | $ | 1,840.0 |
| Receivables, net | | | 1,961.1 | | | 1,935.0 |
| Inventories, net | | | 803.8 | | | 887.6 |
| Deferred income taxes | | | 203.4 | | | 105.9 |
| Other current assets | | | 131.0 | | | 161.3 |
| Total current assets | | | 4,064.2 | | | 4,929.8 |
| | | | |
| Plant, property and equipment, net | | | 993.9 | | | 980.3 |
| Deferred income taxes | | | 608.5 | | | 29.7 |
| Goodwill, net | | | 3,831.3 | | | 3,829.7 |
| Other intangible assets, net | | | 616.5 | | | 733.0 |
| Other assets | | | 365.8 | | | 1,050.2 |
| Total assets | | $ | 10,480.2 | | $ | 11,552.7 |
| | | | |
| Liabilities and Shareholders' Equity | | | | |
| Current Liabilities: | | | | |
| Accounts payable | | $ | 1,234.6 | | $ | 1,296.8 |
| Accrued expenses | | | 991.2 | | | 958.9 |
| Accrued taxes | | | 30.2 | | | 40.9 |
| Notes payable and current maturities of long-term debt | | | 1,679.0 | | | 3,083.0 |
| Pension and postretirement benefits | | | 68.8 | | | 68.5 |
| Deferred income taxes | | | 26.7 | | | 8.2 |
| Total current liabilities | | | 4,030.5 | | | 5,456.3 |
| | | | |
| Pension and postretirement benefits | | | 2,141.6 | | | 764.6 |
| Long-term debt | | | 467.9 | | | 483.0 |
| Other liabilities | | | 780.3 | | | 904.0 |
| Total liabilities | | | 7,420.3 | | | 7,607.9 |
| | | | |
| Shareholders' equity | | | 3,059.9 | | | 3,944.8 |
| Total liabilities and shareholders' equity | | $ | 10,480.2 | | $ | 11,552.7 |
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ITT CORPORATION AND SUBSIDIARIES |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
(In millions) |
(Unaudited) |
| | |
| | Twelve Months Ended |
| | December 31, |
| | 2008 | | 2007 |
| Operating Activities Net income | | $ | 794.7 | | | $ | 742.1 | |
| Less: Income from discontinued operations | | | (19.5 | ) | | | (109.1 | ) |
| Income from continuing operations | | | 775.2 | | | | 633.0 | |
| | | | |
| Adjustments to income from continuing operations: | | | | |
| Depreciation and amortization | | | 278.3 | | | | 185.4 | |
| Stock-based compensation | | | 30.8 | | | | 34.6 | |
| Restructuring and asset impairment charges, net | | | 77.5 | | | | 66.1 | |
| Payments for restructuring | | | (54.1 | ) | | | (51.5 | ) |
| Change in receivables | | | (112.9 | ) | | | (236.7 | ) |
| Change in inventories | | | 70.4 | | | | 111.8 | |
| Change in accounts payable and accrued expenses | | | 61.3 | | | | 137.2 | |
| Change in accrued and deferred taxes | | | 19.7 | | | | (34.1 | ) |
| Change in other current and non-current assets | | | (21.9 | ) | | | (106.0 | ) |
| Change in other current and non-current liabilities | | | (0.8 | ) | | | 47.2 | |
| Other, net | | | (3.9 | ) | | | 11.1 | |
| Net cash — operating activities | | | 1,119.6 | | | | 798.1 | |
| | | | |
| Investing Activities Additions to plant, property and equipment | | | (248.7 | ) | | | (239.3 | ) |
| Acquisitions, net of cash acquired | | | (275.7 | ) | | | (2,009.2 | ) |
| Proceeds from sale of assets and businesses | | | 21.6 | | | | 283.6 | |
| Other, net | | | (0.1 | ) | | | 6.8 | |
| Net cash — investing activities | | | (502.9 | ) | | | (1,958.1 | ) |
| | | | |
| Financing Activities Short-term debt, net | | | (1,229.0 | ) | | | 2,311.9 | |
| Long-term debt repaid | | | (23.3 | ) | | | (15.2 | ) |
| Long-term debt issued | | | 0.6 | | | | 0.5 | |
| Repurchase of common stock | | | (75.0 | ) | | | (299.0 | ) |
| Proceeds from issuance of common stock | | | 34.4 | | | | 65.4 | |
| Dividends paid | | | (120.9 | ) | | | (96.6 | ) |
| Tax benefit from stock option exercises and restricted stock award lapses | | | 6.7 | | | | 15.0 | |
| Other, net | | | (0.9 | ) | | | (0.9 | ) |
| Net cash — financing activities | | | (1,407.4 | ) | | | 1,981.1 | |
| | | | |
| Exchange Rate Effects on Cash and Cash Equivalents | | | (73.4 | ) | | | 103.0 | |
| | | | |
| Net Cash — Discontinued Operations: | | | | |
| Operating Activities | | | (9.1 | ) | | | (16.2 | ) |
| Investing Activities | | | (1.9 | ) | | | (4.0 | ) |
| Financing Activities | | | — | | | | (1.0 | ) |
| | | | |
| Net change in cash and cash equivalents | | | (875.1 | ) | | | 902.9 | |
| Cash and cash equivalents — beginning of year | | | 1,840.0 | | | | 937.1 | |
| Cash and Cash Equivalents — end of period | | $ | 964.9 | | | $ | 1,840.0 | |
| |
| ITT Corporation Non-GAAP Reconciliation |
| Reported vs. Organic Revenue / Orders Growth |
| Fourth Quarter 2008 & 2007 |
| | | | | | | | | | | | | | | | | | | | | | |
| ($ Millions) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (As Reported - GAAP) | | (As Adjusted - Organic) |
| | | | | | | | | | | | | | | | | | | | | | |
| | Sales & Revenues 3M 2008 | | Sales & Revenues 3M 2007 | | Change 2008 vs. 2007 | | % Change 2008 vs. 2007 | | Sales & Revenues 3M 2008 | | Acquisition / Other Contribution 3M 2008 | | FX Contribution 3M 2008 | | Adj. Sales & Revenues 3M 2008 | | Sales & Revenues 3M 2007 | | Change Adj. 08 vs. 07 | | % Change Adj. 08 vs. 07 |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| ITT Corporation - Consolidated | | 2,945.0 | | 2,528.7 | | 416.3 | | 16.5% | | 2,945.0 | | (385.1) | | 93.4 | | 2,653.3 | | 2,528.7 | | 124.6 | | 4.9% |
| | | | | | | | | | | | | | | | | | | | | | |
| Defense Electronics & Services | | 1,636.0 | | 1,177.9 | | 458.1 | | 38.9% | | 1,636.0 | | (375.6) | | 1.6 | | 1,262.0 | | 1,177.9 | | 84.1 | | 7.1% |
| Communications Systems | | 306.8 | | 250.5 | | 56.3 | | 22.5% | | 306.8 | | (38.1) | | 0.0 | | 268.7 | | 250.5 | | 18.2 | | 7.3% |
| Space Systems | | 173.0 | | 166.7 | | 6.3 | | 3.8% | | 173.0 | | 0.0 | | 0.3 | | 173.3 | | 166.7 | | 6.6 | | 4.0% |
| Advanced Engineering & Sciences | | 256.3 | | 149.0 | | 107.3 | | 72.0% | | 256.3 | | (72.4) | | 0.0 | | 183.9 | | 149.0 | | 34.9 | | 23.4% |
| Electronic Systems | | 342.4 | | 141.5 | | 200.9 | | 142.0% | | 342.4 | | (204.9) | | 1.3 | | 138.8 | | 141.5 | | (2.7) | | -1.9% |
| Night Vision | | 144.2 | | 125.5 | | 18.7 | | 14.9% | | 144.2 | | 0.0 | | 0.0 | | 144.2 | | 125.5 | | 18.7 | | 14.9% |
| Systems | | 364.2 | | 346.9 | | 17.3 | | 5.0% | | 364.2 | | 0.0 | | 0.0 | | 364.2 | | 346.9 | | 17.3 | | 5.0% |
| Intell & Info Warfare | | 68.1 | | 1.8 | | 66.3 | | NA | | 68.1 | | (66.3) | | 0.0 | | 1.8 | | 1.8 | | 0.0 | | NA |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Fluid Technology | | 984.3 | | 985.2 | | (0.9) | | -0.1% | | 984.3 | | (3.5) | | 75.0 | | 1,055.8 | | 985.2 | | 70.6 | | 7.2% |
| Industrial Process | | 227.0 | | 192.0 | | 35.0 | | 18.2% | | 227.0 | | 0.0 | | 8.5 | | 235.5 | | 192.0 | | 43.5 | | 22.7% |
| Residential and Commercial Water Group | | 300.5 | | 304.2 | | (3.7) | | -1.2% | | 300.5 | | 0.0 | | 11.9 | | 312.4 | | 304.2 | | 8.2 | | 2.7% |
| Water & WasteWater | | 470.4 | | 500.9 | | (30.5) | | -6.1% | | 470.4 | | (3.5) | | 55.5 | | 522.4 | | 500.9 | | 21.5 | | 4.3% |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Motion & Flow Control | | 326.6 | | 370.2 | | (43.6) | | -11.8% | | 326.6 | | (6.0) | | 16.9 | | 337.5 | | 370.2 | | (32.7) | | -8.8% |
| Flow Control | | 45.0 | | 61.0 | | (16.0) | | -26.2% | | 45.0 | | (1.9) | | 4.7 | | 47.8 | | 61.0 | | (13.2) | | -21.6% |
| Motion Technologies | | 103.3 | | 128.4 | | (25.1) | | -19.5% | | 103.3 | | 0.0 | | 9.0 | | 112.3 | | 128.4 | | (16.1) | | -12.5% |
| Energy Absorption | | 30.9 | | 34.7 | | (3.8) | | -11.0% | | 30.9 | | 0.0 | | 0.3 | | 31.2 | | 34.7 | | (3.5) | | -10.1% |
| Control Technologies | | 45.9 | | 41.0 | | 4.9 | | NA | | 45.9 | | (4.1) | | 0.2 | | 42.0 | | 41.0 | | 1.0 | | 2.4% |
| Interconnect Solutions | | 101.8 | | 104.8 | | (3.0) | | -2.9% | | 101.8 | | 0.0 | | 2.8 | | 104.6 | | 104.8 | | (0.2) | | -0.2% |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Orders 3M 2008 | | Orders 3M 2007 | | Change 2008 vs. 2007 | | % Change 2008 vs. 2007 | | Orders 3M 2008 | | Acquisition Contribution 3M 2008 | | FX Contribution 3M 2008 | | Adj. Orders 3M 2008 | | Orders 3M 2007 | | Change Adj. 08 vs. 07 | | % Change Adj. 08 vs. 07 |
| | | | | | | | | | | | | | | | | | | | | | |
| Defense Electronics & Services | | 1,793.6 | | 1,401.6 | | 392.0 | | 28% | | 1,793.6 | | (471.6) | | 0.9 | | 1,322.9 | | 1,401.6 | | (78.7) | | -5.6% |
| | | | | | | | | | | | | | | | | | | | | | |
| Fluid Technology | | 796.1 | | 907.7 | | (111.6) | | -12% | | 796.1 | | (3.3) | | 68.0 | | 860.8 | | 907.7 | | (46.9) | | -5.2% |
| | | | | | | | | | | | | | | | | | | | | | |
| Motion & Flow Control | | 296.6 | | 394.6 | | (98.0) | | -25% | | 296.6 | | (4.8) | | 15.8 | | 307.6 | | 394.6 | | (87.0) | | -22.0% |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Segment Orders | | 2,885.3 | | 2,700.2 | | 185.1 | | 7% | | 2,885.3 | | (479.7) | | 84.7 | | 2,490.3 | | 2,700.2 | | (209.9) | | -7.8% |
| | | | | | | | | | | | | | | | | | | | | | |
| Note: Excludes intercompany eliminations. |
| |
| ITT Corporation Non-GAAP Reconciliation |
| Reported vs. Organic Revenue / Orders Growth |
| Full Year 2008 & 2007 |
| | | | | | | | | | | | | | | | | | | | | | |
| ($ Millions) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (As Reported - GAAP) | | (As Adjusted - Organic) |
| | | | | | | | | | | | | | | | | | | | | | |
| | Sales & Revenues FY 2008 | | Sales & Revenues FY 2007 | | Change 2008 vs. 2007 | | % Change 2008 vs. 2007 | | Sales & Revenues FY 2008 | | Acquisition / Other Contribution FY 2008 | | FX Contribution FY 2008 | | Adj. Sales & Revenues FY 2008 | | Sales & Revenues FY 2007 | | Change Adj. 08 vs. 07 | | % Change Adj. 08 vs. 07 |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| ITT Corporation - Consolidated | | 11,694.8 | | 9,003.3 | | 2,691.5 | | 29.9% | | 11,694.8 | | (1,948.7) | | (98.5) | | 9,647.6 | | 9,003.3 | | 644.3 | | 7.2% |
| | | | | | | | | | | | | | | | | | | | | | |
| Defense Electronics & Services | | 6,282.3 | | 4,176.2 | | 2,106.1 | | 50.4% | | 6,282.3 | | (1,766.4) | | 2.2 | | 4,518.1 | | 4,176.2 | | 341.9 | | 8.2% |
| Communications Systems | | 1,141.8 | | 850.0 | | 291.8 | | 34.3% | | 1,141.8 | | (208.9) | | 0.0 | | 932.9 | | 850.0 | | 82.9 | | 9.8% |
| Space Systems | | 594.8 | | 605.8 | | (11.0) | | -1.8% | | 594.8 | | 0.0 | | (0.2) | | 594.6 | | 605.8 | | (11.2) | | -1.8% |
| Advanced Engineering & Sciences | | 968.7 | | 485.0 | | 483.7 | | 99.7% | | 968.7 | | (297.9) | | 0.0 | | 670.8 | | 485.0 | | 185.8 | | 38.3% |
| Electronic Systems | | 1537.7 | | 450.7 | | 1,087.0 | | 241.2% | | 1,537.7 | | (1,091.8) | | 2.4 | | 448.3 | | 450.7 | | (2.4) | | -0.5% |
| Night Vision | | 500.7 | | 484.7 | | 16.0 | | 3.3% | | 500.7 | | 0.0 | | 0.0 | | 500.7 | | 484.7 | | 16.0 | | 3.3% |
| Systems | | 1401.1 | | 1,311.2 | | 89.9 | | 6.9% | | 1,401.1 | | 0.0 | | 0.0 | | 1,401.1 | | 1,311.2 | | 89.9 | | 6.9% |
| Intell & Info Warfare | | 185.1 | | 1.8 | | 183.3 | | NA | | 185.1 | | (183.4) | | 0.0 | | 1.7 | | 1.8 | | (0.1) | | NA |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Fluid Technology | | 3,840.6 | | 3,509.1 | | 331.5 | | 9.4% | | 3,840.6 | | (9.9) | | (49.7) | | 3,781.0 | | 3,509.1 | | 271.9 | | 7.7% |
| Industrial Process | | 815.5 | | 703.9 | | 111.6 | | 15.9% | | 815.5 | | 0.0 | | 10.3 | | 825.8 | | 703.9 | | 121.9 | | 17.3% |
| Residential and Commercial Water Group | | 1,263.8 | | 1,183.3 | | 80.5 | | 6.8% | | 1,263.8 | | 0.0 | | (25.1) | | 1,238.7 | | 1,183.3 | | 55.4 | | 4.7% |
| Water & WasteWater | | 1,814.3 | | 1,663.3 | | 151.0 | | 9.1% | | 1,814.3 | | (9.9) | | (36.6) | | 1,767.8 | | 1,663.3 | | 104.5 | | 6.3% |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Motion & Flow Control | | 1,583.4 | | 1,332.5 | | 250.9 | | 18.8% | | 1,583.4 | | (172.4) | | (51.1) | | 1,359.9 | | 1,332.5 | | 27.4 | | 2.1% |
| Flow Control | | 247.5 | | 251.6 | | (4.1) | | -1.6% | | 247.5 | | (23.3) | | 2.4 | | 226.6 | | 251.6 | | (25.0) | | -9.9% |
| Motion Technologies | | 561.9 | | 495.4 | | 66.5 | | 13.4% | | 561.9 | | 0.0 | | (39.6) | | 522.3 | | 495.4 | | 26.9 | | 5.4% |
| Energy Absorption | | 140.1 | | 41.9 | | 98.2 | | 234.4% | | 140.1 | | (98.2) | | (2.0) | | 39.9 | | 41.9 | | (2.0) | | -4.8% |
| Control Technologies | | 181.9 | | 117.8 | | 64.1 | | NA | | 181.9 | | (50.9) | | (0.3) | | 130.7 | | 117.8 | | 12.9 | | 11.0% |
| Interconnect Solutions | | 453.2 | | 425.6 | | 27.6 | | 6.5% | | 453.2 | | 0.0 | | (11.5) | | 441.7 | | 425.6 | | 16.1 | | 3.8% |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Orders FY 2008 | | Orders FY 2007 | | Change 2008 vs. 2007 | | % Change 2008 vs. 2007 | | Orders FY 2008 | | Acquisition Contribution FY 2008 | | FX Contribution FY 2008 | | Adj. Orders FY 2008 | | Orders FY 2007 | | Change Adj. 08 vs. 07 | | % Change Adj. 08 vs. 07 |
| | | | | | | | | | | | | | | | | | | | | | |
| Defense Electronics & Services | | 6,232.9 | | 4,073.9 | | 2,159.0 | | 53% | | 6,232.9 | | (1,555.1) | | 0.7 | | 4,678.5 | | 4,073.9 | | 604.6 | | 14.8% |
| | | | | | | | | | | | | | | | | | | | | | |
| Fluid Technology | | 3,938.7 | | 3,657.1 | | 281.6 | | 8% | | 3,938.7 | | (10.3) | | (66.6) | | 3,861.8 | | 3,657.1 | | 204.7 | | 5.6% |
| | | | | | | | | | | | | | | | | | | | | | |
| Motion & Flow Control | | 1,563.3 | | 1,379.0 | | 184.3 | | 13% | | 1,563.3 | | (173.1) | | (52.6) | | 1,337.6 | | 1,379.0 | | (41.4) | | -3.0% |
| | | | | | | | | | | | | | | | | | | | | | |
| Total Segment Orders | | 11,726.1 | | 9,097.8 | | 2,628.3 | | 29% | | 11,726.1 | | (1,738.5) | | (118.4) | | 9,869.2 | | 9,097.8 | | 771.4 | | 8.5% |
| | | | | | | | | | | | | | | | | | | | | | |
| Note: Excludes intercompany eliminations. |
| |
| ITT Corporation |
| Segment Operating Income & OI Margin |
| Fourth Quarter of 2008 & 2007 |
| | | | | | | | |
| ($ Millions) |
| | | | | | | | |
| | | | | | | | |
| | Q4 2008 As Reported | | Q4 2007 As Reported | | % Change 08 vs. 07 | | |
| | | | | | | | |
| Sales and Revenues: | | | | | | | | |
| Defense Electronics & Services | | 1,636.0 | | 1,177.9 | | | | |
| Fluid Technology | | 984.3 | | 985.2 | | | | |
| Motion & Flow Control | | 326.6 | | 370.2 | | | | |
| Intersegment eliminations | | (1.9) | | (4.6) | | | | |
| Total Sales and Revenues | | 2,945.0 | | 2,528.7 | | | | |
| | | | | | | | |
| Operating Margin: | | | | | | | | |
| Defense Electronics & Services | | 11.5% | | 10.6% | | 90 | | BP |
| Fluid Technology | | 9.7% | | 12.7% | | (300) | | BP |
| Motion & Flow Control | | -1.1% | | 10.3% | | (1,140) | | BP |
| Total Ongoing Segments | | 9.5% | | 11.4% | | (190) | | BP |
| | | | | | | | |
| | | | | | | | |
| Income: | | | | | | | | |
| Defense Electronics & Services | | 187.5 | | 125.4 | | 49.5% | | |
| Fluid Technology | | 95.7 | | 125.4 | | -23.7% | | |
| Motion & Flow Control | | (3.6) | | 38.0 | | -109.5% | | |
| Total Segment Operating Income | | 279.6 | | 288.8 | | -3.2% | | |
| |
| ITT Corporation |
| Segment Operating Income & OI Margin |
| Full Year 2008 & 2007 |
| | | | | | | | |
| ($ Millions) |
| | | | | | | | |
| | FY 2008 As Reported | | FY 2007 As Reported | | % Change 08 vs. 07 | | |
| | | | | | | | |
| Sales and Revenues: | | | | | | | | |
| Defense Electronics & Services | | 6,282.3 | | 4,176.2 | | | | |
| Fluid Technology | | 3,840.6 | | 3,509.1 | | | | |
| Motion & Flow Control | | 1,583.4 | | 1,332.5 | | | | |
| Intersegment eliminations | | (11.5) | | (14.5) | | | | |
| Total Sales and Revenues | | 11,694.8 | | 9,003.3 | | | | |
| | | | | | | | |
| Operating Margin: | | | | | | | | |
| Defense Electronics & Services | | 11.6% | | 12.0% | | (40) | | BP |
| Fluid Technology | | 12.2% | | 12.3% | | (10) | | BP |
| Motion & Flow Control | | 12.1% | | 14.1% | | (200) | | BP |
| Total Ongoing Segments | | 11.9% | | 12.5% | | (60) | | BP |
| | | | | | | | |
| | | | | | | | |
| Income: | | | | | | | | |
| Defense Electronics & Services | | 727.0 | | 502.7 | | 44.6% | | |
| Fluid Technology | | 468.7 | | 432.7 | | 8.3% | | |
| Motion & Flow Control | | 191.7 | | 187.4 | | 2.3% | | |
| Total Segment Operating Income | | 1,387.4 | | 1,122.8 | | 23.6% | | |
| |
| ITT Corporation Non-GAAP Reconciliation |
| Reported vs. Adjusted Net Income & EPS |
| Fourth Quarter of 2008 & 2007 |
| | | | | | | | | | | | | | | | | | |
| ($ Millions, except EPS and shares) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | Q4 2008 As Reported | | Q4 2008 Adjustments | | | Q4 2008 As Adjusted | | Q4 2007 As Reported | | Q4 2007 Adjustments | | | Q4 2007 As Adjusted | | Change 2008 vs. 2007 As Adjusted | | Percent Change 2008 vs. 2007 As Adjusted |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Segment Operating Income | | 279.6 | | | | | 279.6 | | 288.8 | | | | | 288.8 | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Interest Income (Expense) | | (32.8) | | 2.3 | #A | | (30.5) | | (27.6) | | | | | (27.6) | | | | |
| Other Income (Expense) | | (2.5) | | | | | (2.5) | | (2.8) | | | | | (2.8) | | | | |
| Corporate (Expense) | | (36.4) | | | | | (36.4) | | (39.8) | | | | | (39.8) | | | | |
| | | | | | | | | | | | | | | | | | |
| Income from Continuing Operations before Tax | | 207.9 | | 2.3 | | | 210.2 | | 218.6 | | | | | 218.6 | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Income Tax Expense | | (32.4) | | (28.6) | #B | | (61.0) | | (90.2) | | 20.0 | #C | | (70.2) | | | | |
| | | | | | | | | | | | | | | | | | |
| Total Tax Expense | | (32.4) | | (28.6) | | | (61.0) | | (90.2) | | 20.0 | | | (70.2) | | | | |
| | | | | | | | | | | | | | | | | | |
| Income from Continuing Operations | | 175.5 | | (26.3) | | | 149.2 | | 128.4 | | 20.0 | | | 148.4 | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Diluted EPS from Continuing Operations | | 0.96 | | (0.14) | | | 0.82 | | 0.70 | | 0.11 | | | 0.81 | | $0.01 | | 1.2% |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| #A - Remove $2.3M additional interest Expense re FIN48 reserves. |
| #B - Remove Tax Expense of $28.6M related to prior year adjustments. |
| #C - Remove Tax Benefit of $20.0M. |
| |
| ITT Corporation Non-GAAP Reconciliation |
| Reported vs. Adjusted Net Income & EPS |
| Full Year 2008 & 2007 |
| | | | | | | | | | | | | | | | | |
| ($ Millions, except EPS and shares) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | FY 2008 As Reported | | FY 2008 Adjustments | | FY 2008 As Adjusted | | | FY 2007 As Reported | | FY 2007 Adjustments | | FY 2007 As Adjusted | | Change 2008 vs. 2007 As Adjusted | | Percent Change 2008 vs. 2007 As Adjusted |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Segment Operating Income | | 1,387.4 | | | | 1,387.4 | | | 1,122.8 | | | | 1,122.8 | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Interest Income (Expense) | | (109.5) | | 2.3 | #A | (107.2) | | | (65.3) | | (7.0) | #C | (72.3) | | | | |
| Other Income (Expense) | | (13.1) | | | | (13.1) | | | (13.4) | | | | (13.4) | | | | |
| Corporate (Expense) | | (177.3) | | | | (177.3) | | | (145.6) | | | | (145.6) | | | | |
| | | | | | | | | | | | | | | | | |
| Income from Continuing Operations before Tax | | 1,087.5 | | 2.3 | | 1,089.8 | | | 898.5 | | (7.0) | | 891.5 | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income Tax Expense | | (312.3) | | (36.4) | #B | (348.7) | | | (265.5) | | (20.7) | #D | (286.2) | | | | |
| | | | | | | | | | | | | | | | | |
| Total Tax Expense | | (312.3) | | (36.4) | | (348.7) | | | (265.5) | | (20.7) | | (286.2) | | | | |
| | | | | | | | | | | | | | | | | |
| Income from Continuing Operations | | 775.2 | | (34.1) | | 741.1 | | | 633.0 | | (27.7) | | 605.3 | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted EPS from Continuing Operations | | 4.23 | | (0.19) | | 4.04 | | | 3.44 | | (0.15) | | 3.29 | | $0.75 | | 22.8% |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| #A - Remove $2.3M additional interest Expense re FIN48 reserves. |
| #B - Remove Tax Expense of $36.4M related to prior year adjustments. |
| #C - Remove Interest Adjustment on Tax Audit Settlement of ($7.0M). |
| #D - Remove Tax Benefit of $20.7M primarily related to a favorable Audit Tax Settlement ($41.8M) partially offset by other adjustments ($21.1M) |
| |
ITT Corporation Non-GAAP Reconciliation |
Cash From Operating Activities vs. Free Cash Flow |
Fourth Quarter of 2008 & 2007 |
| | | | |
($ Millions) |
| | | | |
| | | | |
| | 12M 2008 | | 12M 2007 |
| | | | |
| Net Cash - Operating Activities | | 1,119.6 | | | 798.1 | |
| | | | |
| Capital Expenditures | | (248.7 | ) | | (239.3 | ) |
| | | | |
| Cash Payment re sale/leaseback | | - | | | 44.8 | |
| | | | |
| Pension Pre-funding, net of tax | | - | | | 50.0 | |
| | | | |
| Free Cash Flow | | 870.9 | | | 653.6 | |
| | | | |
| | | | |
| Income from Continuing Operations | | 775.2 | | | 633.0 | |
| | | | |
| | | | |
| Free Cash Flow Conversion | | 112% | | | 103% | |
| |
| ITT Corporation Non-GAAP Reconciliation |
| Year Ended 2008 & 2007 - Debt Coverage Ratios |
| | | | |
| ($ Millions) |
| | | | |
| | | | |
| | December 31, 2008 | | December 31, 2007 |
| | | | |
| Net Debt/Net Capitalization | | 27.9% | | 30.4% |
| Total Debt/Total Capitalization | | 41.2% | | 47.5% |
| | | | |
| | | | |
| Short Term Debt | | 1,679.0 | | 3,083.0 |
| Long Term Debt | | 467.9 | | 483.0 |
| Total Debt | | 2,146.9 | | 3,566.0 |
| Cash & Cash equivalents | | 964.9 | | 1,840.0 |
| Net Debt | | 1,182.0 | | 1,726.0 |
| | | | |
| | | | |
| Total Shareholders' Equity | | 3,059.9 | | 3,944.8 |
| Net Debt | | 1,182.0 | | 1,726.0 |
| Net Capitalization | | 4,241.9 | | 5,670.8 |
CONTACT:
ITT Corporation
Andy Hilton, +1-914-641-2160
andy.hilton@itt.com
