ITT Inc. · NYSE:ITT
ITT — Q4 2010 Earnings Presentation
18 slides from ITT's earnings presentation, Feb 3, 2011
Slide 1: Investor Review Q4 2010
February 3, 2011 Investor Review Q4 2010
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: 2010 ITT Highlights
2010 ITT Highlights Exceptional Operational & Strategic Execution 9 Strong 2010 Performances +18% Record Adjusted EPS* 2010 Acquisitions $0.08 Accretive $500 Million Productivity Achieved $937 Million Free Cash Flow** 9 Positioned for Future Growth Deployed $1 Billion into 5 Strategic Acqu
Slide 4: 2010 ITT Results
2010 ITT Results Record Adjusted EPS Continuing Operations Q4 Full-Year $ billions, except per share amounts 2010 vs 2009 2010 vs 2009 Revenues $3.0 +8% $11.0 +3% Segment Operating Income $0.4 +29% $1.4 +11% Segment Operating Margin 13.8% +230 bps 12.8% +90 bps Adjusted EPS* $1.36 +42% $4.41 +18% Q4
Slide 5: ITT Financial Position
ITT Financial Position Nicely Positioned for the Future Cash Net Debt to Net Capital $937M Free Cash Flow* 30.0% 104% FCF Conversion of Net Income** 25.0% $1.0B Cash & Cash Equivalents 20.0% 16.5% 15.0% 13.4% 14.4% Pension 10.0% 7.0% 6.9% $50M Q4 Voluntary US Contribution 5.0% 83% Funded U
Slide 6: Fluid Technology
Fluid Technology Significant Margin Expansion Q4 Results $ millions 2010 vs 2009 Revenues $1,071 +16% Operating Income $142 +36% Operating Margin 13.3% +200 bps Restructuring & Realignment -$5 +$6 +4% Organic Revenue Flat Organic Orders (+13% Total) +9% Industrial Process +6% Residential & Commercia
Slide 7: Motion & Flow Control
Motion & Flow Control Strong Demand Across all Businesses Q4 Results $ millions 2010 vs 2009 Revenues $333 0% Operating Income $37 +118% Operating Margin 11.1% +600 bps Restructuring & Realignment -$3 +$23 +4% Organic Revenue +20% Organic Orders +24% Control Technologies +34% Control Technologies
Slide 8: Defense & Information Solutions
Defense & Information Solutions Solid Execution Q4 Results $ millions 2010 vs 2009 Revenues $1,636 +5% Operating Income $239 +18% Operating Margin 14.6% +160 bps Restructuring -$13 -$13 +5% Organic Revenue $1.4B Funded Orders +23% Electronic Systems -19% Electronic Systems Global SINCGARS Lower
Slide 9: 2010 Defense Backlog Metrics
2010 Defense Backlog Metrics Strong Strategic Foundation $11.5B Funded and Unfunded Metric* Other Major Wins (Not in backlog) $4.1B Q4 Funded Backlog $1.4B FAA SE2020 - Air Traffic (ID/IQ) $1.7B Cleared Protests in Q4 $1.0B NASA Communications • $1.4B Kuwait Facilities Balance of Cleared Q4
Slide 10: 2011 ITT Outlook
2011 ITT Outlook Full Year 2011 Segment Guidance $ billions Revenue Operating 2011 vs 2010 Margin** Midpoints Total Organic 2011 Current Segments Motion & Flow Control ~ $1.5 +7% +5% ~ 15.0% Fluid Technology ~ $4.1 +12% +5% ~ 14.0% Defense & Information Solutions ~ $5.8 -2% -2% ~ 12.4% Pro Forma* Bu
Slide 11: Transaction Overview
Transaction Overview “Future ITT” “Future Water” “Future Defense” Control Flow Control Technologies Geospatial Industrial Systems Process Residential & Information Interconnect Commercial Systems Water & Solutions Water Wastewater Electronic Motion Systems Technologies 2011 Est Pro Forma* Revenue $2
Slide 12: Transaction Update
Transaction Update Transaction Progress Continuous Engagement with Customers & Stakeholders Implemented Detailed Action Plans On-Track to Complete Proposed Tax-Free Spins in 2011 Focused on 2011 Operating Plans Financial & Guidance Update Plan to Minimize Incremental Post-Spin Corporate Co
Slide 13: Appendix
¥ itt Appendix Q4 2010 Engineered for life
Slide 14: 2010 Adjusted EPS Guidance Rollforward
2010 Adjusted EPS* Guidance Rollforward Exceptional Execution 2010 Adjusted EPS* Previous FY 2010 Guidance (Dec 17, 2010) $ 4.30 Q4 Operating Performance $ 0.04 Q4 Corporate, Taxes & Other $ 0.07 Total Q4 Performance $ 0.11 2010 Adjusted EPS $ 4.41 Strong Operating Performance *Adjusted EPS = Contin
Slide 15: Q4 2010 ITT Segment Performance
Q4 2010 ITT Segment Performance Strong Operating Productivity Fluid Motion Defense ITT Q4 '10 Total Revenue vs PY 15.9% 0.3% 5.1% 8.0% FX 1.5% 3.3% 0.1% 0.9% Acquisition/Disposition -13.1% 0.0% -0.1% -4.2% Q4 '10 Organic Revenue vs PY 4.3% 3.6% 5.1% 4.7% Q4 '09 Margin 11.3% 5.1% 13.0% 11.5% Operatin
Slide 16: FY 2010 ITT Segment Performance
FY 2010 ITT Segment Performance Strong Operating Productivity Fluid Motion Defense ITT FY '10 Total Revenue vs PY 9.1% 15.0% -2.8% 3.0% FX -0.1% 2.5% 0.1% 0.3% Acquisition/Disposition -8.1% 0.2% 0.0% -2.5% FY '10 Organic Revenue vs PY 0.9% 17.7% -2.7% 0.8% FY '09 Margin 11.7% 9.4% 12.5% 11.9% Operat
Slide 17: Non-GAAP Reconciliations - EPS & FCF
Non-GAAP Reconciliations - EPS & FCF Q4 Full Year EPS - Reconciliation 2009 2010 2009 2010 Total Reported EPS $ 1.08 $ 1.44 $ 3.50 $ 4.30 Discontinued Items: $ (0.03) $ 0.02 $ (0.01) $ (0.77) Continuing Ops. - Reported EPS $ 1.05 $ 1.46 $ 3.49 $ 3.53 Continuing Ops. - Special Items: Asbestos Net Lia
Slide 18: Restructuring and Realignment Costs
Restructuring and Realignment* Costs Q4 Q4 Total Restructuring & $ in millions Restructuring Realignment Realignment 2010 2009 Fav(Unfav) 2010 2009 Fav(Unfav) 2010 2009 Fav(Unfav) Fluid Technology (5) (13) 8 - 2 (2) (5) (11) 6 Motion & Flow Control (3) (26) 23 - - - (3) (26) 23 Defense & Information