ITT Inc. · NYSE:ITT
ITT — Q2 2006 Earnings Presentation
13 slides from ITT's earnings presentation, Jul 28, 2006
Slide 1: Second Quarter 2006 Investor Review
Second Quarter 2006 Investor Review July 28, 2006
Slide 2: Financial Results Adjusted for Reported Special Items
Financial Results Adjusted for 1 Reported Special Items 2Q05 2Q06 2Q05 2Q06 $1,864 $2,068 • Organic Growth +10% Revenues – With all segments +10.9% contributing • Margin expansion at Fluid Segment $254.1 $263.8 $221.2 $226.9 Tech & Defense Operating Income +14.9% +16.3% • Margin improvement in Elect
Slide 3: Net Income / EPS
Net Income / EPS $, Millions except EPS 2 2Q05 2Q06 $Δ Income from Operations (1) $ 226.9 $ 263.8 +$36.9 Corporate Expense (1) (23.1) (27.0) (3.9) Interest, Net (1) (11.9) (16.7) (4.8) Other (5.5) (4.2) +1.3 Taxes (1) (57.8) (66.7) (8.9) Income before special items 128.6 149.2 +20.6 Special Items(2)
Slide 4: Special Items
Special Items 3 2Q05 2Q06 $, Millions except per share Per Share Pre-Tax After-Tax Per Share Reported EPS $ 0.73 $ 0.75 Restructuring, Net $ (0.02) $ (10.0) $ (6.8) $ (0.04) Tax Settlements (Incl Interest Income) $ 0.04 $ - $ - $ - Discontinued Operations $ 0.03 $ (2.1) $ (1.5) $ (0.01) Less Total S
Slide 5: Cash from Operations
Cash from Operations $, Millions 4 1H05 1H06 (1) Income from Continuing Ops $ 252.4 $ 249.9 Depreciation 80.7 79.4 Amortization 16.3 24.1 Working Capital (133.3) (128.9) Pension Pre-funding (100.0) (100.0) Other 32.0 (3.6) CFOA 148.1 120.9 Capital Expenditures (64.1) (64.8) Pension Pre-funding 100.0
Slide 6: Balance Sheet
Balance Sheet 5 $, Millions Jun 30, 05 Dec 31, 05 Jun 30, 06 Short Term Debt $ 887.6 $ 751.4 $ 900.1 Long Term Debt 460.4 447.6 449.9 Deferred Gain on Swaps 100.8 68.7 66.3 Total Debt 1,448.8 1,267.7 1,416.3 Cash & Cash Equivalents 384.2 451.0 755.0 Net Debt $1,064.6 $ 816.7 $ 661.3 EBITDA Coverage
Slide 7: Fluid Technology
6 Fluid Technology Revenues Operating Income Operating Margin $765.3 13.5% $724.7 $95.1 $103.3 13.1% +5.6% +8.6% +40 bps 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 Financial Highlights Market Highlights • Organic Revenue Growth +4% • Strong order activity in Wastewater • Water/Wastewater +5% and Water handling •
Slide 8: Defense Electronics & Services
Defense Electronics & Services 7 Operating Operating Backlog Revenues Income Margin $3,973 $3,569 $918.5 $101.4 10.9% 11.0% $779.5 $84.9 (10.2)% +17.8% +19.4% +10 bps 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 Financial Highlights Market Highlights • Organic Revenue Growth +18% • SINCGARS production re
Slide 9: Motion & Flow Control
8 Motion & Flow Control Revenues Operating Income Operating Margin $181.6 $188.1 $37.9 $38.1 20.9% 20.3% +3.6% +0.5% (60) bps 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 Financial Highlights Market Highlights • Organic Revenue Growth +4% • Aerospace continues to benefit from • Aerospace Controls +11% Regional/Bus
Slide 10: Electronic Components
Electronic Components 9 Operating Operating Orders Revenues Income Margin $200.8 $21.0 10.5% $202.9 $181.7 $185.6 $9.0 5.0% +9.3% +10.5% +133.3% +550 bps 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 2Q05 2Q06 Financial Highlights Market Highlights • Book-to-Bill of 1.01x • Second consecutive quarter of +$200 milli
Slide 11: 2006 Earnings Outlook
2006 Earnings Outlook ($, Millions except EPS) 10 Revenue Segment 3Q06 FY06 Fluid Technology $760 – 770 $3,005 – 3,035 Margin 13.2 – 13.3% 12.9 – 13.0% Defense Electronics $950 – 965 $3,670 – 3,695 Margin 11.3 – 11.5% 11.2 – 11.4% Motion & Flow Control $160 – 165 $690 – 705 Margin 18.3 – 18.6% 19.5
Slide 12: Summary
Summary 11 • The strategy is working • ITT Management System and operational excellence drive growth and margin expansion • Strong secular growth catalysts and attractive business mix support consistent and predictable performance • Able to raise guidance twice in 2006 • Following disciplined acquis
Slide 13: ITT Engineered for life
S itt Engineered for life