ITT Inc. · NYSE:ITT
ITT — Q3 2009 Earnings Presentation
17 slides from ITT's earnings presentation, Oct 30, 2009
Slide 1: Third Quarter 2009 Investor Review
Third Quarter 2009 Investor Review October 30, 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: Q3 Overview
Q3 Overview Q3 Adjusted EPS +$0.18 vs Guidance Mid-Point* Strong Segment Operating Performances Increasing Full Year Adjusted EPS Guidance Solid Organic Revenue Performance Q3 Down (4%) vs PY Raising Fluid and Motion & Flow Control Full Year Organic Revenue 174% YTD Free Cash Flow Conversion
Slide 4: Q3 ITT Results
Q3 ITT Results Performing in Difficult Conditions 3Q 08 3Q 09 Revenues -4% Organic Revenue $2,879 $2,698 -26% Organic Orders - 6% $ millions Segment Operating Income -10 bps Segment Operating Margin Strong Productivity; +80 bps Operationally $376 $352 Lower Volumes; Negative FX - 6% Higher Pen
Slide 5: Q3 ITT Financial Position
Q3 ITT Financial Position Strong Cash Flow & Aggressive Debt Reduction Free Cash Flow* +174% YTD Free Cash Flow Conversion** 12.9% Working Capital % of Sales $916 +40 bps improvement vs PY $759 Improved Receivable Collections +21% 3Q 08 $ millions 3Q 09 Net Debt to Net Capital Significant Reduct
Slide 6: Fluid Technology
Fluid Technology Strong Productivity Q3 Results Q3 Revenue vs Expectations $ millions 2008 2009 Change Revenues $949 $826 -13% Municipal In-line Operating Income $132 $108 -18% Industrial Above Operating Margin 13.9% 13.1% -80 bps Residential In-line Restructuring -$3 -$5 -$2 Commercial Below (Inclu
Slide 7: Fluid Technology: Market Overview & Revenue Guidance
Fluid Technology Market Overview & Revenue Guidance Solid Performance in Difficult Markets Key Fluid Markets Current Full Year Revenue Forecast vs Prior Year vs Prior Forecast Municipal ~ flat n/c Industrial ▼ mid teens ▲ Commercial ▼ high teens n/c Residential ▼ low teens n/c Emerging Mkts ▲ mid si
Slide 8: Motion & Flow Control
Motion & Flow Control Improving Productivity Q3 Results Q3 Revenue vs Expectations $ millions 2008 2009 Change Revenues $394 $307 -22% Aerospace/Defense Below Operating Income $56 $40 -28% Automotive Above Operating Margin 14.2% 13.2% -100 bps General Industrial In-Line Restructuring -$2 -$2 $0 (Inc
Slide 9: Motion & Flow Control: Key Market Overview & Revenue Guidance
Motion & Flow Control Key Market Overview & Revenue Guidance Performance Ahead of Expectations Key Motion Markets Current Revenue Forecast vs Prior Year vs Prior Forecast Aerospace/Defense ▼ high single ▼ Automotive ▼ mid teens ▲ General Industrial ▼ mid twenties n/c Revenue 2009 Guidance vs 2008 Fu
Slide 10: Defense Electronics & Services
Defense Electronics & Services Strong Operating Performance Q3 Results $ millions 2008 2009 Change Revenues $1,540 $1,567 2% Operating Income $188 $203 8% Operating Margin 12.2% 13.0% 80 bps Q2 09 Q3 09 Change Backlog $5,205 $4,914 -$291 Q3 Performance +2% Organic Revenue: -34% Organic Orders: +8% S
Slide 11: Net Liability for Future Asbestos Claims
Net Liability for Future Asbestos Claims Primarily related to products sold prior to 1985 that contained a 3rd party manufactured part alleged to contain asbestos Forecast Process Considerations: Recently Completed in 2nd Half of 2009 as Previously Disclosed Recorded Now That Costs Deemed “Proba
Slide 12: Q3 Impacts of Future Asbestos Claims
Q3 Impacts of Future Asbestos Claims $ millions, except EPS Q3 Adjustments Balance Sheet Future Claims Costs Including Legal $662 Insurance & Other Recoveries ($439) Net Liability $223 Income Statement Future Claims Continuing Operations: After-Tax Charge* ($131) EPS* ($0.71) Total Including Discont
Slide 13: 2009 FY Guidance
2009 FY Guidance Adjusted EPS Rollforward Low Mid High Previous Full Year 2009 EPS Guidance* $ 3.50 $ 3.60 $ 3.70 Q3 Items: Operating Performance, Net of Timing $ 0.08 Favorable Interest $ 0.02 Q4 Items: Operating Performance & Interest $ 0.06 Corp, Investments & Share Count $ (0.04) Revised Full Ye
Slide 14: Appendix
Appendix Q3 2009 Earnings Presentation October 30, 2009 P14
Slide 15: Q3 ITT 2009 Segment Performance
Q3 ITT 2009 Segment Performance Fluid Motion & Flow Defense ITT Q3 '09 Total Revenue vs PY -13.0% -22.1% 1.8% -6.3% FX -3.9% -3.6% -0.1% -1.8% Acquisition/Disposition 0.9% -2.7% 0.0% -0.1% Q3 '09 Organic Revenue vs PY -10.0% -15.8% 1.9% -4.4% Q3 '08 Margin 13.9% 14.2% 12.2% 13.1% Operational, Invest
Slide 16: Q3 Non-GAAP Reconciliation – EPS & FCF
Q3 Non-GAAP Reconciliation* – EPS & FCF EPS - Reconciliation 3Q08 3Q09 Reported EPS $ 1.17 $ 0.32 Discontinued Ops. $ (0.06) $ 0.04 Reported EPS - Continuing Ops. $ 1.11 $ 0.36 Special Items: Prior Year Tax Settlement Int Refund $ - $ (0.04) Future Asbestos Claims Net Liability $ - $ 0.71 Adjusted E
Slide 17: Q3 Asbestos Financial Statement Impacts
Q3 Asbestos Financial Statement Impacts $ millions, except EPS Balance Sheet Asbestos-Related Asbestos-Related Asbestos-Related Liability Receivable Net Liability Notes Existing Claims 255 220 35 Future Claims 662 439 223 See Slide #12 Total Q3 Balance Sheet 917 659 258 Memo - Q3 Balance Sheet Class