ITT Inc. · NYSE:ITT
ITT — Q2 2009 Earnings Presentation
15 slides from ITT's earnings presentation, Jul 31, 2009
Slide 1: Second Quarter 2009 Investor Review
Second Quarter 2009 Investor Review July 31, 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: Q2 Highlights
Q2 Highlights Performing Nicely in Tough Conditions +$0.26 Q2 EPS of $1.06 vs Guidance Mid-Point* Strong Segment Operational Performance Increasing Full Year Guidance & Tightening Range 139% YTD Free Cash Flow Conversion* $462M YTD Free Cash Flow +12% vs Prior Year $1B Debt Issuance at 5.5%
Slide 4: Q2 ITT Results
Q2 ITT Results Performance Ahead of Expectations 2Q 08 2Q 09 Revenues -5% Organic Revenue $3,064 $2,780 Flat Organic Orders - 9% Segment Operating Income -100 bps Segment Operating Margin $409 Strong Productivity $346 Lower Volumes - 15% Higher Pension & Restructuring Expense EPS* Improved Ope
Slide 5: Q2 ITT Financial Position
Q2 ITT Financial Position Disciplined Deployment Free Cash Flow * +139% Free Cash Flow Conversion (ratio excludes Q1 $58M non-cash special tax item) $462 +110 bps Working Capital Improvement $411 +12% Improved Receivable Collections 2Q 08 2Q 09 Net Debt to Net Capital +930 bps Reduction in Net D
Slide 6: Fluid Technology
Fluid Technology Outperformed Expectations Q2 Results Q2 Revenue vs Expectations 2008 2009 Change Revenues $1,026 $869 -15% Municipal Above Operating Income $139 $112 -20% Industrial Above Operating Margin 13.5% 12.8% -70 bps Residential In-line Restructuring & Realignment* -$3 -$16 -$13 Commercial
Slide 7: Fluid Technology Market Overview & Revenue Guidance
Fluid Technology Market Overview & Revenue Guidance Some Markets Stabilizing – Mix Changing Key Fluid Markets Current Full Year Revenue Forecast vs Prior Year Prior Forecast Municipal ~ flat n/c Industrial ▼ high teens ▼ Commercial ▼ high teens ▼ Residential ▼ low teens ▲ Emerging Mkts ▲ mid-single
Slide 8: Motion & Flow Control
Motion & Flow Control Improving Productivity Q2 Results Q2 Revenue vs Expectations 2008 2009 Change Revenues $443 $308 -30% Aerospace/Defense Below Operating Income $71 $33 -53% Automotive Above Operating Margin 16.1% 10.8% -530 bps General Industrial In-Line Restructuring* -$2 -$6 -$4 (*Included in
Slide 9: Motion & Flow Control Key Market Overview & Revenue Guidance
Motion & Flow Control Key Market Overview & Revenue Guidance Changing Dynamics Key Motion Markets Current Revenue Forecast vs Prior Year Prior Forecast Aerospace/Defense ▼ mid-single ▼ Automotive ▼ high-teens ▲ General Industrial ▼ mid-twenties n/c Revenue 2009 Guidance vs 2008 Full Year Forecast Cu
Slide 10: Defense Electronics & Services
Defense Electronics & Services Strong Performance & Strategic Wins Q2 Results 2008 2009 Change Revenues $1,599 $1,604 - Operating Income $199 $201 1% Operating Margin 12.4% 12.5% 10 bps Q1 09 Q2 09 Change Backlog $5,221 $5,203 - Q2 Performance Flat Organic Revenue: +29% Organic Orders +17% Space Sig
Slide 11: 2009 EPS Guidance Roll-Forward
2009 EPS* Guidance Roll-Forward Low Mid High Previous Full Year 2009 EPS Guidance $ 3.20 $ 3.40 $ 3.60 Q2 Performance, Net of Timing $ 0.15 Q3 & Q4 Items: Favorable FX, Interest & Taxes $ 0.12 Incremental Restructuring & Investments $ (0.07) Revised Full Year 2009 EPS Guidance $ 3.50 $ 3.60 $ 3.70 *
Slide 12: ITT 2009 Outlook
ITT 2009 Outlook Third Quarter 2009 Guidance Yr/Yr Organic Q3 2009 ~ Growth* ~ Growth ITT - Revenues (in billions) $ 2.6 - $ 2.7 -7% -5% Earnings Per Share** $ 0.80 - $ 0.90 -23% Full Year 2009 Guidance Yr/Yr Organic 2009 ~ Growth* ~ Growth ITT - Revenues (in billions) $ 10.8 - $ 11.0 -6% -4% Earnin
Slide 13: Appendix
Appendix Q2 2009 Earnings Presentation July 31, 2009 P13
Slide 14: Q2 ITT 2009 Segment Performance
Q2 ITT 2009 Segment Performance Fluid Motion & Flow Defense ITT Q2 '09 Total Revenue vs PY -15.3% -30.4% 0.3% -9.3% FX -8.5% -8.3% -0.1% -4.1% Acquisition/Divest 0.2% -2.8% 0.0% -0.3% Q2 '09 Organic Revenue vs PY -7.0% -19.3% 0.4% -4.9% Q2 '08 Margin 13.5% 16.1% 12.4% 13.4% Operational, Investments,
Slide 15: Q2 Non-GAAP Reconciliation – EPS & FCF
Q2 Non-GAAP Reconciliation* – EPS & FCF EPS - Reconciliation 2Q08 2Q09 Reported EPS $ 1.19 $ 1.10 Discontinued Ops. $ 0.02 $ - Reported EPS - Continuing Ops. $ 1.21 $ 1.10 Special Items Tax/Other $ (0.03) $ (0.04) Adjusted EPS - Continuing Ops. $ 1.18 $ 1.06 FCF - Reconciliation YTD 2008 YTD 2009 Ne