ITT Inc. · NYSE:ITT
ITT — Q2 2008 Earnings Presentation
13 slides from ITT's earnings presentation, Jul 25, 2008
Slide 1: Second Quarter 2008 Investor Review
Second Quarter 2008 Investor Review July 25, 2008
Slide 2: Q2 Highlights
Q2 Highlights Solid Organic Revenue Growth • All Segments Contribute – Led by Fluid • Strong Order Growth Margin Expansion • Net Cost Productivity and Pricing +38% EPS Growth • Acquisitions Contributing Raising Full-Year Guidance Midpoint $0.09 104% Free Cash Flow Conversion 1
Slide 3: ITT Q2 Results
ITT Q2 Results 2Q 07 2Q 08 +7% Organic Growth Revenues $3,064 $2,223 • Fluid +10% +38% • Consolidated Orders +19% Segment Acquisition Performance $409 Operating Segment Operating Margin +20 bps $293 Income • Productivity, pricing offset acquisitions, +40% material prices EPS* $1.19 Organic G
Slide 4: Fluid Technology
Fluid Technology 2Q 07 2Q 08 Fluid Technology Revenues +10% Organic Revenue $1,026 • +7% North America; +12% International $880 +18% Organic Orders +100 bps Operating Margin +17% • Price, productivity offset FX, materials Operating Organic Revenue +16% Industrial Process Income • Chemical, o
Slide 5: Motion & Flow Control
Motion & Flow Control 2Q 07 2Q 08 Motion & Flow Control Revenues +6% Organic Revenue $443 +5% Organic Orders $330 -30 bps Operating Margin • Investments in footprint, new product development and +34% IMC acquisition Operating Organic Revenue Income +18% Aerospace Controls $71 • Strong afterm
Slide 6: Defense Electronics & Services
Defense Electronics & Services 2Q 07 1Q 08 2Q 08 Defense Electronics & Services Backlog $5,026 Backlog projected at $5 billion at year-end $4,645 +5% Organic Revenue $3,437 • +9% Year-to-date +26% Organic Orders • Products and services strong 2Q 07 2Q 08 Revenues -40 bps Operating Margin $1,
Slide 7: 2008 Earnings Outlook
2008 Earnings Outlook ($ in Millions except EPS) Third Quarter 2008 Consolidated Guidance 2007 Q308 yr/yr Growth 1 Revenue ## $ 2,780 - $ 2,840 29% Segment OI Margin ### 13.0% - 13.2% -30 bps Earnings Per Share ## $ 1.03 - $ 1.07 18% Full Year 2008 Guidance 2007 2008 yr/yr Growth 1 Segment Guidance
Slide 8: Defense Developments & Awards
Defense Developments & Awards Communications Systems Official JTRS Team Member Strong International Pipeline Saudi Arabia – Shipments Night Vision Strong Demand: • International Activity • Navy & Air Force Order • Homeland Security • Federal, State and Local Law Enforcement Systems Counter
Slide 9: Appendix
Y tT Engineered for life Appendix
Slide 10: Q2 2008 Segment Operating Margins
Q2 2008 Segment Operating Margins Fluid Technology Motion & Flow Control Defense Q2 07 12.5% Q2 07 16.4% Q2 07 12.8% Operational/Other 1.4% Operational/Other (0.8%) Operational/Other 0.6% Pension 0.3% Pension 0.2% Pension 0.5% FX (0.7%) FX 0.7% EDO Acquisition (1.5%) Q2 08 13.5% IMC Acquisition (0.4
Slide 11: Non-GAAP Reconciliations - EPS
Non-GAAP Reconciliations - EPS 2Q07 2Q08 Reported EPS $ 1.16 $ 1.20 Discontinued Ops. $ 0.08 $ (0.02) Reported EPS from Continuing Ops $ 1.08 $ 1.22 Tax Settlement/Other $ 0.22 $ 0.03 Adjusted EPS from Continuing Ops. $ 0.86 $ 1.19 10
Slide 12: 2008 EPS Guidance Roll-Forward
2008 EPS Guidance Roll-Forward* Low MidPoint High Previous Full Year 2008 Guidance $ 4.00 $ 4.05 $ 4.10 Base Business Performance ~ $ 0.10 EDO Performance ~ $ 0.02 Corporate, Interest, Taxes ~ $ (0.03) Total Change vs mid-point ~ $ 0.09 Revised FY 2008 Guidance $ 4.11 $ 4.14 $ 4.17 * Continuing EPS,
Slide 13: 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 Act. These forward-looking statements include