ITT Inc. · NYSE:ITT
ITT — Q4 2008 Earnings Presentation
14 slides from ITT's earnings presentation, Feb 4, 2009
Slide 1: Fourth Quarter 2008 Investor Review
Fourth Quarter 2008 Investor Review February 4, 2009
Slide 2: Safe Harbor
Safe Harbor “Safe Harbor Statement” under the Private Securities Litigation Reform Act of 1995 (“the Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995
Slide 3: Q4 Highlights and 2008 Highlights
Q4 Highlights 2008 Highlights +5% Organic Revenue Growth +7% Organic Revenue Growth • Defense +7% • Defense +8% • Fluid +7% • Fluid +8% +$0.04 EPS Performance* +23% EPS Growth • Acquisitions successfully integrated $94M Restructuring & Realignment Actions 112% Free Cash Flow Conversion • $871 millio
Slide 4: 2008 ITT Results
2008 ITT Results 4Q 07 4Q 08 2007 2008 Revenues Organic Revenue Growth $11,695 • 4Q +5%; FY +7% $2,945 $9,003 $2,529 Organic Order Growth +17% +30% • 4Q -8%; FY+9% Segment Operating Significant Acquisition $1,387 Contributions Income $1,123 $289 $280 Aggressive Restructuring -3% +24% & Reali
Slide 5: ITT 2008 EPS Guidance Roll-Forward
ITT 2008 EPS* Guidance Roll-Forward 2008 Guidance Midpoint Previous Full Year 2008 Guidance $ 4.00 Q4 Operating Performance $ 0.01 Q4 Corporate, Taxes & Other $ 0.10 Q4 Incremental Restructuring & Realignment $ (0.07) Total Q4 Performance $ 0.04 2008 EPS* $ 4.04 2008 EPS* Growth vs 2007 23% * EPS fr
Slide 6: ITT Financial Position
ITT Financial Position Free Cash Flow * 112% Free Cash Flow Conversion $871 • Improved working capital $654 • Strong acquisition performance +33% 2007 2008 Working Capital % of Sales +200 bps Improvement in Working Capital % of Sales 15.1% • Improved inventory turns 13.1% • Improved A/R days +200 bp
Slide 7: Fluid Technology
Fluid Technology Q4 Full-Year 2007 2008 Change 2007 2008 Change Revenues $985 $984 0% $3,509 $3,841 9% Operating Income $125 $96 -24% $433 $469 8% Operating Margin 12.7% 9.7% -300 bps 12.3% 12.2% -10 bps Restructuring & Realignment* -$20 -$41 -$22 -$40 -$50 -$10 (*Included in Op Inco me & M argin) Q
Slide 8: Motion & Flow Control
Motion & Flow Control Q4 Full-Year 2007 2008 Change 2007 2008 Change Revenues $370 $327 -12% $1,333 $1,583 19% Operating Income $38 -$4 -109% $187 $192 2% Operating Margin 10.3% -1.1% -1,140 bps 14.1% 12.1% -200 bps Restructuring & Realignment* -$12 -$42 -$30 -$15 -$47 -$32 (*Included in Op Inco me
Slide 9: Defense Electronics & Services
Defense Electronics & Services Q4 Full-Year 2007 2008 Change 2007 2008 Change Revenues $1,178 $1,636 39% $4,176 $6,282 50% Backlog - - - $5,234 $5,240 0% Operating Income $125 $188 50% $503 $727 45% Operating Margin 10.6% 11.5% +90 bps 12.0% 11.6% -40 bps Restructuring & Realignment* -$3 -$9 -$6 -$1
Slide 10: ITT 2009 Earnings Outlook
ITT 2009 Earnings Outlook ($ in Millions except EPS) Full Year 2009 Guidance Organic 2009 Yr/Yr Growth* Growth Segment Revenue Fluid Technology $ 3,290 - $ 3,370 -13% -5% Defense Electronics & Services $ 6,540 - $ 6,590 5% 5% Motion & Flow Control $ 1,150 - $ 1,225 -25% -16% Consolidated Guidance IT
Slide 11: ITT 2009 Actions
ITT 2009 Actions Focused on Customers Disciplined Capital Deployment 9 Align with customer needs 9 Focus on cash generation & liquidity 9 Strategic growth initiatives preservation 9 Life cycle cost improvements 9 Reprioritizing investment decisions 9 Strategic consolidation of Value Centers 9 Dispos
Slide 12: Appendix
Appendix Y itt Engineered for life
Slide 13: ITT Q4 2008 Segment Performance
ITT Q4 2008 Segment Performance Fluid Motion & Flow Defense ITT Q4 '08 Organic Rev Growth 7.2% -8.8% 7.1% 4.9% FX -7.7% -4.6% -0.1% -3.6% Acquisition 0.4% 1.6% 31.9% 15.2% Q4 '08 Total Rev Growth -0.1% -11.8% 38.9% 16.5% Q4 '07 Margin 12.7% 10.3% 10.6% 11.4% Operational, Investments, Other -1.3% -4.
Slide 14: ITT Non-GAAP Reconciliation - EPS
ITT Non-GAAP Reconciliation - EPS 4Q07 4Q08 2007 2008 Reported EPS $ 0.86 $ 1.02 $ 4.03 $ 4.33 Discontinued Ops. $ 0.16 $ 0.06 $ 0.59 $ 0.10 Reported EPS - Continuing Ops. $ 0.70 $ 0.96 $ 3.44 $ 4.23 Tax Settlement/Other $ (0.11) $ 0.14 $ 0.15 $ 0.19 Adjusted EPS - Continuing Ops. $ 0.81 $ 0.82 $ 3.