ITT Inc. · NYSE:ITT
ITT — ITT Industries — Lehman Brothers Industrial Select Conference 2004
16 slides from ITT's conference presentation, Feb 4, 2004
Slide 1: Lehman Brothers Industrial Select Conference
Lehman Brothers Industrial Select Conference February 4, 2004 Lou Giuliano Chairman, President and Chief Executive Officer
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements contained in this report, that are not historical facts, constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, in general, predict, forecast, indicate or imply futu
Slide 3: ITT Industries Today
ITT Industries Today REVENUE PROFILE (2003: $5.6 Billion) • Global Multi-Industry Company Fluid Defense Technology Electronics 39% • Strong Positions/Attractive & Services 32% Markets • “Engineered Solutions” Focus Electronic Motion & Components Flow Control 11% 18% • Disciplined Management Processe
Slide 4: Financial Track Record (2000-2003)
Financial Track Record (2000-2003) REVENUES ($mm) SEGMENT OPERATING MARGIN $5,627 $4,985 $4,829 $4,676 12.1% 12.5% 11.9% 11.2% 2000 2001 2002 2003 2000 2001 2002 2003 EARNINGS PER SHARE FREE CASH FLOW ($mm) $3.70 $3.86 $3.48 $622 $3.29 $492 $303 $234 2000 2001 2002 2003 2000 2001 2002 2003 Note: 200
Slide 5: Increasing Cash Flow
Increasing Cash Flow WC % OF SALES CAPITAL EXPENDITURES $181 $174 19.5% 18.5% $153 $153 18.4% 16.3% 2000 2001 2002 2003 2000 2001 2002 2003 FREE CASH FLOW % OF SALES CASH REDEPLOYMENT 11.0% Acquisitions 9.9% _ $200M Annual Target 6.5% Dividends 4.9% _ 6% Increase in 2004 Share Repurchase _ Maintain
Slide 6: Improving Debt Statistics
Improving Debt Statistics TOTAL DEBT EBITDA COVERAGE 32.1 Short Term Long Term 22.0 $630 $517 $300 $142 10.5 9.7 $408 $456 $492 $461 2000 2001 2002 2003 2000 2001 2002 2003 NET DEBT/EBITDA NET DEBT/NET CAPITAL 1.3 1.3 43.9% 38.2% 34.1% 0.8 0.3 9.4% 2000 2001 2002 2003 2000 2001 2002 2003 Note: Recon
Slide 7: ITT Management System
ITT Management System™ Portfolio Consistent Management Results • Value-Based • Long-Term Targets Management • Grounded Forecasts • Invest in Strong Cores • Contingency Plans • Global Market Development • In-Depth Operational Reviews • Ongoing Transformation Operational Growth Leadership Excellence •
Slide 8: 2004 EPS Walkforward
2004 EPS Walkforward 2003E $3.84 – 3.86 Pension (0.23) – (0.30) Healthcare (0.08) – (0.10) Taxes (0.05) Foreign Exchange 0 Restructuring Benefits 0.17 – 0.25 Total $3.65 – 3.66 Core Expansion 0.40 – 0.59 +10-15% Core Growth From 2004E $4.05 – 4.25 Segments 7
Slide 9: 2004 Earnings Outlook
2004 Earnings Outlook Revenue Segment 2004 Trends 1Q04 FY04 Fluid – Continued growth in Water/Wastewater Technology – Broad Global opportunities $540 - 550 $2,450 - 2,500 Defense – Growth in Services through broader offering – Capabilities at “Sweet Spot” of DoD priorities $450 – 460 $1,900 – 1,950
Slide 10: ITT Highlights
ITT Highlights • Solid Performance in 2003 – Market Share Gains and New Products Fuel Organic Growth – Strength in Defense and W/WW Offset Weakness at Electronics – Strong Cash Flow Performance and Solid Balance Sheet • Growth in 2004 Despite Non-Operating Headwind – Favorable Fundamentals Continue
Slide 11: Appendix
Appendix Additional Segment Data
Slide 12: Fluid Technology
Fluid Technology REVENUE PROFILE GEOGRAPHIC PROFILE CUSTOMER & CHANNEL PROFILE Water/ North America Engineered 53% Pumps Waste Water Systems 66% 62% Europe 16% 33% Repair 14% Industrial Service & Process Biopharm 4% 18% Asia Pacific 6% Building Trades Other 8% 14% 6% FINANCIAL PERFORMANCE ($mm) 2000
Slide 13: Defense Electronics and Services
Defense Electronics and Services REVENUE PROFILE PRIME CONTRACTOR REVENUES CUSTOMER PROFILE Radars Other 7% O&M Services Prime Airborne EW 16% 12% 21% 78% Satellite Payloads Engineering 10% Services 11% Night Vision 11% Advanced International DoD Engineering Tactical 13% Subcontractor 20% 64% Commun
Slide 14: Motion & Flow Control
Motion & Flow Control REVENUE PROFILE PRODUCTS & MARKETS Segments Markets Automotive Tubing Automotive Tubing Automotive brake tubing and 38% Leisure Marine fuel lines 19% Motion Control Shock absorbers - railway, bus, truck, and specialty auto Flow Control Flow Control Specialty flow control 13% in
Slide 15: Electronic Components
Electronic Components CUSTOMER & CHANNEL REVENUE PROFILE GEOGRAPHIC PROFILE PROFILE Networks 6% Asia Pacific 22% North America CEM Telecom Industrial OEM 36% 10% 6% 25% 62% Handsets 15% Mil/Aero Computer 18% 5% Europe Consumer Transportation Distribution 42% 7% 18% 28% FINANCIAL PERFORMANCE ($mm) 20
Slide 16: ITT Industries
¥ ITT Industries
ITT Industries — Lehman Brothers Industrial Select Conference 2004 on 6ix