[February 14, 2017] |
|
ITT Reports 2016 Fourth-Quarter and Full-Year Results, 2017 Guidance
ITT Inc. (NYSE: ITT) today reported 2016 fourth-quarter and full-year
financial results that reflected a strong strategic focus on key
long-term growth drivers including operational execution, market
expansion and effective capital deployment, while effectively managing
through the challenging market environment across several of the
company's end markets. The company also provided 2017 guidance.
"While we continued to face a difficult external environment across
several of our key markets during 2016, we maintained our collective
focus on addressing those challenges while advancing our essential
long-term growth plans," said ITT CEO and President Denise Ramos.
"Throughout 2016, we proactively restructured our operations, drove cost
controls and improved productivity and efficiency, which helped us
mitigate some of the unfavorable impact from our markets. At the same
time, we drove a number of strategic actions that will position us well
for long-term value creation.
"To continue to drive value, we accelerated our structural reset of our
Industrial Process business to optimize and align the business and its
cost structure to current market conditions and to better propel the
business in the long-term. In the transportation end market, we
continued to gain market share and expand geographically as we grew
revenue approximately 20 percent. We also significantly advanced our
global automotive brake pad strategy to evolve from a regional to a
global supplier while diversifying our customer base and increasing
volume across platforms that drive stronger future aftermarket growth.
"In addition, we continued to deploy our capital in balanced and
effective ways to both position us for long-term success and to return
value to shareowners. We made organic investments to expand our global
friction business and in January 2017, acquired Axtone Railway
Components to further position us in the railway market. In addition, we
returned about $114 million to shareholders by executing $70 million of
share repurchases and increasing our quarterly dividend. We also
implemented a new holding company structure to advance our legacy
liability management strategy.
"As we look ahead to 2017, we are mindful that we will continue to face
a challenging environment. As such, we will build on our strong
foundation and accelerate our progress in driving world-class
operational capabilities with the creation of our new Chief Operating
Officer structure under Luca Savi. As always, we will continue to manage
those areas over which we have control and drive enhanced long-term
value for shareowners."
On a GAAP basis, the company delivered revenue of $2.4 billion in 2016,
reflecting a 3 percent decline that included an incremental $132 million
from acquisitions, partially offset by an unfavorable $32 million
foreign exchange impact. GAAP segment operating income decreased 16
percent, primarily reflecting lower volumes at Industrial Process and
higher restructuring and realignment charges. Full-year GAAP EPS
decreased to $2.02, compared with $3.44 in the prior year, primarily
reflecting the decline in segment operating income, a $66 million lower
benefit from asbestos-related matters and a $13 million pension
settlement charge related to our pension de-risking strategies.
On an adjusted basis, full-year organic revenue (defined as total
revenue excluding foreign exchange, acquisition and divestiture impacts)
decreased 7 percent as strong growth in global automotive brake pads was
offset by significant declines in oil and gas and mining projects as
well as weakness in chemical and industrial pumps.
Adjusted operating income decreased 12 percent as solid net operating
productivity, restructuring benefits and the positive impact of the
strategic acquisition of Wolverine Advanced Materials were more than
offset by lower pump volumes and the unfavorable impact of foreign
exchange and pricing pressures. Excluding foreign exchange, adjusted
segment operating income was down 9 percent.
2016 adjusted EPS, which excludes special items, decreased 9 percent to
$2.32, as lower corporate costs associated with improved efficiency and
cost containment actions were offset by lower segment operating income,
the negative impacts of foreign exchange and a higher tax rate. Adjusted
EPS, excluding the negative impact from foreign exchange, decreased 5
percent.
2016 Fourth-Quarter Results
On a GAAP basis, the company delivered revenue of $588 million in the
fourth quarter, reflecting a 12 percent decline that included a 2
percent negative impact from foreign exchange. GAAP segment operating
income decreased 12 percent, primarily reflecting lower Industrial
Process volumes, as well as the prior-year reversal of a
customer-related liability and a 2016 pension settlement charge, which
were partially offset by lower restructuring, realignment and
acquisition-related costs. Fourth-quarter GAAP EPS decreased to $0.27,
compared with $0.40 in the prior year, primarily due to a decline in
segment operating income and prior-year asbestos and environmental
insurance favorability, partially offset by lower tax expense.
On an adjusted basis, organic revenue declined 10 percent as strong
growth in global automotive brake pads was offset by significant oil and
gas and mining declines as well as weakness in chemical and industrial
pumps. Adjusted operating income declined 16 percent reflecting solid
net operating productivity, including restructuring benefits, and
favorable foreign exchange benefits that were more than offset by lower
pump volumes in the Industrial Process business, pricing pressures and
prior-year post-retirement related benefits. Adjusted EPS decreased 17
percent to $0.48 as the positive impacts of a lower share count and
$0.02 of favorable foreign exchange were offset by lower segment
operating income and a higher tax rate.
2016 Fourth-Quarter Business Segment Results
All quarterly results are compared with the respective prior-year
periods.
Industrial Process designs and manufactures industrial pumps
and valves for the chemical and industrial, oil and gas, and mining
markets.
-
Total revenue decreased 29 percent to $212 million, with organic
revenue down 28 percent. Both measures reflect the impact of
challenging conditions in the oil and gas, mining, and chemical and
industrial markets on our projects, short-cycle pumps and aftermarket
businesses. Total revenue also includes the impact of unfavorable
foreign exchange.
-
GAAP operating income decreased 69 percent to $14 million, and
adjusted segment operating income decreased 55 percent to $18 million.
Both measures primarily reflect significantly lower volumes across key
end markets and project pricing pressures, which were partially offset
by improving operational execution, incremental restructuring savings
and the positive impact of foreign exchange. GAAP results also include
favorable adjustments in 2015 to reserves established in purchase
accounting for a prior acquisition and a pension settlement charge in
2016.
Motion Technologies designs and manufactures braking
technologies, shock absorbers and specialized sealing solutions for the
automotive and rail markets.
-
Total revenue increased 8 percent to $228 million, and organic revenue
increased 10 percent. Both measures reflect significant share gains
and market growth in global automotive brake pads with Original
Equipment Manufacturers and strength in seals and shims at Wolverine.
Total revenue also includes the impact of unfavorable foreign exchange.
-
GAAP operating income increased 73 percent to $27 million, and
adjusted segment operating income increased 6 percent to $28 million.
Both increases reflect higher volumes and benefits from productivity
actions, which were partially offset by pricing pressures. GAAP
results also reflect the impact of higher prior-year
acquisition-related costs.
Interconnect Solutions designs and manufactures connectors and
interconnects for the transportation and industrial, aerospace and
defense, and oil and gas markets.
-
Total and organic revenue decreased 6 percent to $80 million. Both
decreases reflect significant declines in global oil and gas market
activity and aerospace and defense weakness.
-
GAAP operating income increased 41 percent to $7 million and adjusted
segment operating income increased 38 percent to $7 million. Both
measures reflect improved operational performance in our North
American operating locations and net operating productivity and
incremental restructuring savings, which were offset by prior-year
post-retirement related benefits.
Control Technologies designs and manufactures products
including fuel management, actuation, and noise and energy absorption
components for the aerospace and industrial markets, as well as
aerospace environmental control system components.
-
Total and organic revenue decreased 2 percent to $70 million,
primarily reflecting declines in aerospace and defense that were
offset by stable industrial volumes.
-
GAAP operating income increased to $12 million and adjusted segment
operating income increased 78 percent to $14 million, reflecting
prior-year expenses related to a legal settlement and strategic
investments in new programs, as well as net operating productivity and
restructuring benefits, partially offset by unfavorable impacts
related to volume and mix. GAAP results also reflect lower
restructuring costs.
2017 Guidance
The company announced 2017 guidance with total revenue expected to be in
the range of down 2 percent to up 2 percent and GAAP EPS expected to be
in the range of $1.45 to $1.75.
From a revenue perspective, global friction share gains and positive
impacts from the acquisition of Axtone are expected to be offset by
lower pump volumes, pricing pressures and the negative impacts of
foreign exchange. Adjusted EPS is expected to be in the range of $2.18
to $2.48 per share, which is flat at the midpoint and up 1 percent
excluding the impact of foreign exchange compared to 2016.
The company plans to continue to return capital to shareowners through
increasing its quarterly dividend by 3 percent to $0.128 per share and
targeting up to $65 million of share repurchases, which will be based on
various factors.
Investor Call Today
ITT's senior management will host a conference call for investors today
at 9 a.m. ET to review performance and answer questions. The briefing
can be monitored live via webcast at the following address on the
company's Web site: www.itt.com/investors
and will be available on the website from two hours after the webcast
until Friday, Feb. 28, 2017, at midnight.
For a reconciliation of GAAP to non-GAAP results, please click
here.
All references to EPS are defined as diluted earnings per share from
continuing operations.
About ITT
ITT is a diversified leading manufacturer of highly engineered critical
components and customized technology solutions for the energy,
transportation and industrial markets. Building on its heritage of
innovation, ITT partners with its customers to deliver enduring
solutions to the key industries that underpin our modern way of life.
ITT is headquartered in White Plains, N.Y., with employees in more than
35 countries and sales in a total of approximately 125 countries. The
company generated 2016 revenues of $2.4 billion. For more information,
visit www.itt.com.
Safe Harbor Statement
This release contains "forward-looking statements" intended to qualify
for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are not
historical facts, but rather are based on current expectations,
estimates, assumptions and projections about our business, future
financial results and the industry in which we operate, and other legal,
regulatory and economic developments. These forward-looking statements
include, but are not limited to, future strategic plans and other
statements that describe the company's business strategy, outlook,
objectives, plans, intentions or goals, and any discussion of future
operating or financial performance.
We use words such as "anticipate," "estimate," "expect," "project,"
"intend," "plan," "believe," "target," "future," "may," "will," "could,"
"should," "potential," "continue," "guidance" and other similar
expressions to identify such forward-looking statements. Forward-looking
statements are uncertain and to some extent unpredictable, and involve
known and unknown risks, uncertainties and other important factors that
could cause actual results to differ materially from those expressed or
implied in, or reasonably inferred from, such forward-looking statements.
Where in any forward-looking statement we express an expectation or
belief as to future results or events, such expectation or belief is
based on current plans and expectations of our management, expressed in
good faith and believed to have a reasonable basis. However, there can
be no assurance that the expectation or belief will occur or that
anticipated results will be achieved or accomplished. More information
on factors that could cause actual results or events to differ
materially from those anticipated is included in the Risk Factors
section of the Company's Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and other documents filed from time to time with the
Securities and Exchange Commission.
The forward-looking statements included in this release speak only as of
the date hereof. We undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
ITT INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED INCOME STATEMENTS
|
(In millions, except per share)
|
(Unaudited)
|
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Three Months
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Twelve Months
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For the Periods Ended December 31
|
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2016
|
|
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2015
|
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|
2016
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|
2015
|
|
Revenue
|
|
|
|
$
|
|
588.4
|
|
|
|
$
|
|
666.8
|
|
|
|
|
$
|
|
2,405.4
|
|
|
|
$
|
|
2,485.6
|
|
|
Costs of revenue
|
|
|
|
|
|
415.0
|
|
|
|
|
|
465.5
|
|
|
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1,647.2
|
|
|
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1,676.5
|
|
Gross Profit
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|
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|
173.4
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201.3
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758.2
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|
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809.1
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General and administrative expenses
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71.9
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71.5
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|
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274.1
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258.3
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Sales and marketing expenses
|
|
|
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41.3
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|
|
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44.0
|
|
|
|
|
|
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170.0
|
|
|
|
|
|
183.2
|
|
|
Research and development expenses
|
|
|
|
|
|
21.9
|
|
|
|
|
|
23.7
|
|
|
|
|
|
|
80.8
|
|
|
|
|
|
78.9
|
|
|
Asbestos-related costs (benefit), net
|
|
|
|
|
|
14.7
|
|
|
|
|
|
8.3
|
|
|
|
|
|
|
(25.6
|
)
|
|
|
|
|
(91.4
|
)
|
Operating Income
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|
|
|
|
|
23.6
|
|
|
|
|
|
53.8
|
|
|
|
|
|
|
258.9
|
|
|
|
|
|
380.1
|
|
|
Interest and non-operating (income) expenses, net
|
|
|
|
|
|
(1.0
|
)
|
|
|
|
|
0.3
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|
|
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|
0.5
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|
|
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|
(2.2
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)
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Income from continuing operations before income tax expense
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|
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24.6
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|
|
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|
53.5
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|
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|
258.4
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|
|
|
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|
382.3
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Income tax expense
|
|
|
|
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|
0.7
|
|
|
|
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|
17.1
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76.0
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|
|
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|
70.1
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|
Income from continuing operations
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|
|
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23.9
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|
|
|
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36.4
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182.4
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|
312.2
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Income from discontinued operations, net of tax
|
|
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|
2.2
|
|
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|
|
0.1
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|
|
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|
|
4.2
|
|
|
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39.4
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Net income
|
|
|
|
|
|
26.1
|
|
|
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|
36.5
|
|
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186.6
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|
|
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351.6
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Less: Income (loss) attributable to noncontrolling interests
|
|
|
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|
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0.3
|
|
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|
|
(0.2
|
)
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0.5
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|
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(0.2
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)
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Net Income attributable to ITT Inc.
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$
|
|
25.8
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$
|
|
36.7
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$
|
|
186.1
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$
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351.8
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Amounts attributable to ITT Inc.:
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Income from continuing operations, net of tax
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|
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|
$
|
|
23.6
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|
|
|
$
|
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36.6
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|
|
|
|
$
|
|
181.9
|
|
|
|
$
|
|
312.4
|
|
|
Income from discontinued operations, net of tax
|
|
|
|
|
|
2.2
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
4.2
|
|
|
|
|
|
39.4
|
|
|
Net income attributable to ITT Inc.
|
|
|
|
$
|
|
25.8
|
|
|
|
$
|
|
36.7
|
|
|
|
|
$
|
|
186.1
|
|
|
|
$
|
|
351.8
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|
|
|
|
|
|
|
|
|
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|
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|
Earnings per share attributable to ITT Inc.:
|
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Basic earnings per share:
|
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|
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|
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|
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Continuing operations
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|
$
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|
0.27
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$
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|
0.40
|
|
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$
|
|
2.04
|
|
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|
$
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|
3.48
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Discontinued operations
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|
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0.02
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|
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0.01
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|
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0.05
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|
|
|
|
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0.44
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Net income
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|
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|
$
|
|
0.29
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|
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|
$
|
|
0.41
|
|
|
|
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$
|
|
2.09
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|
|
|
$
|
|
3.92
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|
Diluted earnings per share:
|
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|
Continuing operations
|
|
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|
$
|
|
0.27
|
|
|
|
$
|
|
0.40
|
|
|
|
|
$
|
|
2.02
|
|
|
|
$
|
|
3.44
|
|
|
Discontinued operations
|
|
|
|
|
|
0.02
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.05
|
|
|
|
|
|
0.44
|
|
|
Net income
|
|
|
|
$
|
|
0.29
|
|
|
|
$
|
|
0.41
|
|
|
|
|
$
|
|
2.07
|
|
|
|
$
|
|
3.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - basic
|
|
|
|
|
|
88.3
|
|
|
|
|
|
89.5
|
|
|
|
|
|
|
89.2
|
|
|
|
|
|
89.8
|
|
|
Weighted average common shares - diluted
|
|
|
|
|
|
88.9
|
|
|
|
|
|
90.5
|
|
|
|
|
|
|
89.9
|
|
|
|
|
|
90.7
|
|
|
|
ITT INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
(In millions)
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
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|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
|
460.7
|
|
|
|
$
|
|
415.7
|
|
|
Receivables, net
|
|
|
|
|
|
523.9
|
|
|
|
|
|
584.9
|
|
|
Inventories, net
|
|
|
|
|
|
295.2
|
|
|
|
|
|
292.7
|
|
|
Other current assets
|
|
|
|
|
|
122.0
|
|
|
|
|
|
204.4
|
Total current assets
|
|
|
|
|
|
1,401.8
|
|
|
|
|
|
1,497.7
|
|
|
Plant, property and equipment, net
|
|
|
|
|
|
464.5
|
|
|
|
|
|
443.5
|
|
|
Goodwill
|
|
|
|
|
|
774.7
|
|
|
|
|
|
778.3
|
|
|
Other intangible assets, net
|
|
|
|
|
|
160.3
|
|
|
|
|
|
187.2
|
|
|
Asbestos-related assets
|
|
|
|
|
|
314.6
|
|
|
|
|
|
337.5
|
|
|
Deferred income taxes
|
|
|
|
|
|
297.4
|
|
|
|
|
|
326.1
|
|
|
Other non-current assets
|
|
|
|
|
|
188.4
|
|
|
|
|
|
153.3
|
Total non-current assets
|
|
|
|
|
|
2,199.9
|
|
|
|
|
|
2,225.9
|
Total assets
|
|
|
|
$
|
|
3,601.7
|
|
|
|
$
|
|
3,723.6
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short-term loans and current maturities of long-term debt
|
|
|
|
$
|
|
214.3
|
|
|
|
$
|
|
245.7
|
|
|
Accounts payable
|
|
|
|
|
|
301.7
|
|
|
|
|
|
314.7
|
|
|
Accrued liabilities
|
|
|
|
|
|
350.2
|
|
|
|
|
|
392.7
|
Total current liabilities
|
|
|
|
|
|
866.2
|
|
|
|
|
|
953.1
|
|
|
Asbestos-related liabilities
|
|
|
|
|
|
877.5
|
|
|
|
|
|
954.8
|
|
|
Postretirement benefits
|
|
|
|
|
|
248.6
|
|
|
|
|
|
260.4
|
|
|
Other non-current liabilities
|
|
|
|
|
|
181.0
|
|
|
|
|
|
189.9
|
Total non-current liabilities
|
|
|
|
|
|
1,307.1
|
|
|
|
|
|
1,405.1
|
Total liabilities
|
|
|
|
$
|
|
2,173.3
|
|
|
|
$
|
|
2,358.2
|
Total ITT Inc. shareholders' equity
|
|
|
|
|
|
1,426.4
|
|
|
|
|
|
1,362.1
|
|
|
Noncontrolling interests
|
|
|
|
|
|
2.0
|
|
|
|
|
|
3.3
|
|
|
Total shareholders' equity
|
|
|
|
|
|
1,428.4
|
|
|
|
|
|
1,365.4
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
|
3,601.7
|
|
|
|
$
|
|
3,723.6
|
|
|
ITT INC. AND SUBSIDIARIES
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Twelve Months Ended December 31
|
|
|
|
2016
|
|
|
|
2015
|
Operating Activities
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
|
186.6
|
|
|
|
|
$
|
|
351.6
|
|
Less: Income from discontinued operations
|
|
|
|
|
|
4.2
|
|
|
|
|
|
|
39.4
|
|
Less: Income (loss) attributable to noncontrolling interests
|
|
|
|
|
|
0.5
|
|
|
|
|
|
|
(0.2
|
)
|
Income from continuing operations attributable to ITT Inc.
|
|
|
|
|
|
181.9
|
|
|
|
|
|
|
312.4
|
|
Adjustments to income from continuing operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
102.0
|
|
|
|
|
|
|
90.0
|
|
Equity-based compensation
|
|
|
|
|
|
12.6
|
|
|
|
|
|
|
15.7
|
|
Asbestos-related (benefit), net
|
|
|
|
|
|
(25.6
|
)
|
|
|
|
|
|
(91.4
|
)
|
Asbestos-related payments, net
|
|
|
|
|
|
(31.5
|
)
|
|
|
|
|
|
(24.6
|
)
|
Deferred income taxes
|
|
|
|
|
|
20.9
|
|
|
|
|
|
|
25.6
|
|
Contributions to postretirement plans
|
|
|
|
|
|
(19.0
|
)
|
|
|
|
|
|
(18.6
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Change in receivables
|
|
|
|
|
|
22.5
|
|
|
|
|
|
|
(72.0
|
)
|
Change in inventories
|
|
|
|
|
|
(7.2
|
)
|
|
|
|
|
|
31.5
|
|
Change in accounts payable
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
11.0
|
|
Change in accrued expenses
|
|
|
|
|
|
(27.4
|
)
|
|
|
|
|
|
(45.8
|
)
|
Change in accrued income taxes
|
|
|
|
|
|
(5.7
|
)
|
|
|
|
|
|
(7.4
|
)
|
Other, net
|
|
|
|
|
|
16.5
|
|
|
|
|
|
|
3.3
|
|
Net Cash - Operating activities
|
|
|
|
|
|
240.7
|
|
|
|
|
|
|
229.7
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
(111.4
|
)
|
|
|
|
|
|
(86.7
|
)
|
Acquisitions, net of cash acquired
|
|
|
|
|
|
(8.8
|
)
|
|
|
|
|
|
(351.0
|
)
|
Purchases of investments
|
|
|
|
|
|
(60.6
|
)
|
|
|
|
|
|
(140.1
|
)
|
Maturities of investments
|
|
|
|
|
|
123.5
|
|
|
|
|
|
|
78.5
|
|
Proceeds from sale of businesses and other assets
|
|
|
|
|
|
3.0
|
|
|
|
|
|
|
9.5
|
|
Proceeds from insurance recovery
|
|
|
|
|
|
-
|
|
|
|
|
|
|
4.2
|
|
Other, net
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
0.1
|
|
Net Cash - Investing activities
|
|
|
|
|
|
(54.4
|
)
|
|
|
|
|
|
(485.5
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
|
Commercial paper, net borrowings
|
|
|
|
|
|
19.0
|
|
|
|
|
|
|
94.5
|
|
Short-term revolving loans, borrowings
|
|
|
|
|
|
27.7
|
|
|
|
|
|
|
200.0
|
|
Short-term revolving loans, repayments
|
|
|
|
|
|
(78.3
|
)
|
|
|
|
|
|
(50.0
|
)
|
Long-term debt, repaid
|
|
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
(3.6
|
)
|
Repurchase of common stock
|
|
|
|
|
|
(77.8
|
)
|
|
|
|
|
|
(84.0
|
)
|
Proceeds from issuance of common stock
|
|
|
|
|
|
12.3
|
|
|
|
|
|
|
6.2
|
|
Dividends Paid
|
|
|
|
|
|
(44.6
|
)
|
|
|
|
|
|
(42.8
|
)
|
Excess tax benefit from equity compensation activity
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
3.4
|
|
Other, net
|
|
|
|
|
|
(2.3
|
)
|
|
|
|
|
|
(3.3
|
)
|
Net Cash - Financing activities
|
|
|
|
|
|
(141.9
|
)
|
|
|
|
|
|
120.4
|
|
Exchange rate effects on cash and cash equivalents
|
|
|
|
|
|
(11.4
|
)
|
|
|
|
|
|
(31.6
|
)
|
Net Cash - Operating activities of discontinued operations
|
|
|
|
|
|
12.0
|
|
|
|
|
|
|
(1.3
|
)
|
Net change in cash and cash equivalents
|
|
|
|
|
|
45.0
|
|
|
|
|
|
|
(168.3
|
)
|
Cash and cash equivalents - beginning of year
|
|
|
|
|
|
415.7
|
|
|
|
|
|
|
584.0
|
|
Cash and cash equivalents - end of period
|
|
|
|
$
|
|
460.7
|
|
|
|
|
$
|
|
415.7
|
|
|
|
Key Performance Indicators and Non-GAAP Measures
|
Management reviews a variety of key performance indicators including
revenue, segment operating income and margins, earnings per share, order
growth, and backlog, some of which are non-GAAP. In addition, we
consider certain measures to be useful to management and investors when
evaluating our operating performance for the periods presented. These
measures provide a tool for evaluating our ongoing operations and
management of assets from period to period. This information can assist
investors in assessing our financial performance and measures our
ability to generate capital for deployment among competing strategic
alternatives and initiatives, including, but not limited to,
acquisitions, dividends and share repurchases. These metrics, however,
are not measures of financial performance under accounting principles
generally accepted in the United States of America (GAAP) and should not
be considered a substitute for measures determined in accordance with
GAAP. We consider the following non-GAAP measures, which may not be
comparable to similarly titled measures reported by other companies, to
be key performance indicators for purposes of our reconciliation tables.
Organic Revenues and Organic Orders are defined as
revenues and orders, excluding the impacts of foreign currency
fluctuations, acquisitions and divestitures. Divestitures include sales
of portions of our business that did not meet the criteria for
presentation as a discontinued operation. The period-over-period change
resulting from foreign currency fluctuations is estimated using a fixed
exchange rate for both the current and prior periods. Management
believes that reporting organic revenue and organic orders provides
useful information to investors by helping identify underlying trends in
our business and facilitating easier comparisons of our revenue
performance with prior and future periods and to our peers.
Adjusted Operating Income, Adjusted Segment Operating Income and Adjusted
Segment Operating Margin are defined as total operating income and
segment operating income, adjusted to exclude special items that
include, but are not limited to, asbestos-related costs, restructuring
costs, realignment costs, certain asset impairment charges, certain
acquisitions-related expenses, and other unusual or infrequent operating
items. Special items represent significant charges or credits that
impact the current results, which management views as unrelated to the
Company's ongoing operations and performance. Adjusted segment operating
margin is defined as adjusted segment operating income divided by total
revenue. We believe that adjusted segment operating income is useful to
investors and other users of our financial statements in evaluating
ongoing operating profitability, as well as in evaluating operating
performance in relation to our competitors.
Adjusted Income from Continuing Operations, Adjusted EPS and Adjusted
EPS Guidance are defined as income from continuing operations
attributable to ITT Inc. and income from continuing operations
attributable to ITT Inc. per diluted share, adjusted to exclude special
items that include, but are not limited to, asbestos-related costs,
restructuring costs, realignment costs, certain asset impairment
charges, certain acquisition-related expenses, income tax settlements or
adjustments, and other unusual and infrequent non-operating items.
Special items represent significant charges or credits, on an after-tax
basis, that impact current results, which management views as unrelated
to the Company's ongoing operations and performance. We believe that
adjusted income from continuing operations is useful to investors and
other users of our financial statements in evaluating ongoing operating
profitability, as well as in evaluating operating performance in
relation to our competitors.
Adjusted Free Cash Flow is defined as net cash provided by
operating activities less capital expenditures, adjusted for cash
payments for restructuring costs, realignment actions, net asbestos cash
flows and other significant items that impact current results which
management views as unrelated to the Company's ongoing operations and
performance. Due to other financial obligations and commitments,
including asbestos, the entire free cash flow may not be available for
discretionary purposes. We believe that adjusted free cash flow provides
useful information to investors as it provides insight into the primary
cash flow metric used by management to monitor and evaluate cash flows
generated by our operations.
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Organic Revenue / Order Growth
|
Fourth Quarter 2016 & 2015
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Reported - GAAP)
|
|
|
|
(As Adjusted - Organic)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
|
(B)
|
|
|
|
|
|
|
(C)
|
|
|
(D)
|
|
|
(E) = B-C-D
|
|
|
(F) = E / A
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
% Change
|
|
|
|
Acquisition / Divestitures
|
|
|
FX Impact
|
|
|
Change
|
|
|
% Change
|
|
|
|
|
3M 2016
|
|
|
3M 2015
|
|
|
2016 vs. 2015
|
|
|
2016 vs. 2015
|
|
|
|
3M 2016
|
|
|
3M 2016
|
|
|
Adj. 2016 vs. 2015
|
|
|
Adj. 2016 vs. 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. - Consolidated
|
|
|
|
588.4
|
|
|
666.8
|
|
|
(78.4
|
)
|
|
|
(11.8
|
%)
|
|
|
|
-
|
|
|
(9.3
|
)
|
|
|
(69.1
|
)
|
|
|
(10.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
212.1
|
|
|
300.1
|
|
|
(88.0
|
)
|
|
|
(29.3
|
%)
|
|
|
|
-
|
|
|
(4.7
|
)
|
|
|
(83.3
|
)
|
|
|
(27.8
|
%)
|
Motion Technologies
|
|
|
|
228.1
|
|
|
211.7
|
|
|
16.4
|
|
|
|
7.7
|
%
|
|
|
|
-
|
|
|
(4.6
|
)
|
|
|
21.0
|
|
|
|
9.9
|
%
|
Interconnect Solutions
|
|
|
|
79.8
|
|
|
85.1
|
|
|
(5.3
|
)
|
|
|
(6.2
|
%)
|
|
|
|
-
|
|
|
0.1
|
|
|
|
(5.4
|
)
|
|
|
(6.3
|
%)
|
Control Technologies
|
|
|
|
69.8
|
|
|
71.1
|
|
|
(1.3
|
)
|
|
|
(1.8
|
%)
|
|
|
|
-
|
|
|
-
|
|
|
|
(1.3
|
)
|
|
|
(1.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Orders
|
|
|
|
572.0
|
|
|
606.3
|
|
|
(34.3
|
)
|
|
|
(5.7
|
%)
|
|
|
|
-
|
|
|
(8.1
|
)
|
|
|
(26.2
|
)
|
|
|
(4.3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
191.7
|
|
|
233.7
|
|
|
(42.0
|
)
|
|
|
(18.0
|
%)
|
|
|
|
-
|
|
|
(3.4
|
)
|
|
|
(38.6
|
)
|
|
|
(16.5
|
%)
|
Motion Technologies
|
|
|
|
235.0
|
|
|
218.7
|
|
|
16.3
|
|
|
|
7.5
|
%
|
|
|
|
-
|
|
|
(4.7
|
)
|
|
|
21.0
|
|
|
|
9.6
|
%
|
Interconnect Solutions
|
|
|
|
86.2
|
|
|
74.7
|
|
|
11.5
|
|
|
|
15.4
|
%
|
|
|
|
-
|
|
|
0.1
|
|
|
|
11.4
|
|
|
|
15.3
|
%
|
Control Technologies
|
|
|
|
60.6
|
|
|
80.2
|
|
|
(19.6
|
)
|
|
|
(24.4
|
%)
|
|
|
|
-
|
|
|
-
|
|
|
|
(19.6
|
)
|
|
|
(24.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Excludes intercompany eliminations
|
Immaterial differences due to rounding
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Organic Revenue / Order Growth
|
Full Year 2016 & 2015
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(As Reported - GAAP)
|
|
|
|
(As Adjusted - Organic)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A)
|
|
|
(B)
|
|
|
|
|
|
|
(C)
|
|
|
(D)
|
|
|
(E) = B-C-D
|
|
|
(F) = E / A
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
% Change
|
|
|
|
Acquisition / Divestitures
|
|
|
FX Impact
|
|
|
Change
|
|
|
% Change
|
|
|
|
|
12M 2016
|
|
|
12M 2015
|
|
|
2016 vs. 2015
|
|
|
2016 vs. 2015
|
|
|
|
12M 2016
|
|
|
12M 2016
|
|
|
Adj. 2016 vs. 2015
|
|
|
Adj. 2016 vs. 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. - Consolidated
|
|
|
|
2,405.4
|
|
|
2,485.6
|
|
|
(80.2
|
)
|
|
|
(3.2
|
%)
|
|
|
|
131.8
|
|
|
(31.5
|
)
|
|
|
(180.5
|
)
|
|
|
(7.3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
830.1
|
|
|
1,113.8
|
|
|
(283.7
|
)
|
|
|
(25.5
|
%)
|
|
|
|
-
|
|
|
(28.7
|
)
|
|
|
(255.0
|
)
|
|
|
(22.9
|
%)
|
Motion Technologies
|
|
|
|
983.4
|
|
|
767.2
|
|
|
216.2
|
|
|
|
28.2
|
%
|
|
|
|
126.4
|
|
|
(4.7
|
)
|
|
|
94.5
|
|
|
|
12.3
|
%
|
Interconnect Solutions
|
|
|
|
309.6
|
|
|
328.1
|
|
|
(18.5
|
)
|
|
|
(5.6
|
%)
|
|
|
|
-
|
|
|
1.5
|
|
|
|
(20.0
|
)
|
|
|
(6.1
|
%)
|
Control Technologies
|
|
|
|
287.0
|
|
|
281.2
|
|
|
5.8
|
|
|
|
2.1
|
%
|
|
|
|
5.4
|
|
|
0.5
|
|
|
|
(0.1
|
)
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Orders
|
|
|
|
2,374.8
|
|
|
2,330.6
|
|
|
44.2
|
|
|
|
1.9
|
%
|
|
|
|
135.6
|
|
|
(26.5
|
)
|
|
|
(64.9
|
)
|
|
|
(2.8
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
779.1
|
|
|
936.7
|
|
|
(157.6
|
)
|
|
|
(16.8
|
%)
|
|
|
|
-
|
|
|
(23.6
|
)
|
|
|
(134.0
|
)
|
|
|
(14.3
|
%)
|
Motion Technologies
|
|
|
|
998.4
|
|
|
780.0
|
|
|
218.4
|
|
|
|
28.0
|
%
|
|
|
|
126.8
|
|
|
(4.5
|
)
|
|
|
96.1
|
|
|
|
12.3
|
%
|
Interconnect Solutions
|
|
|
|
309.5
|
|
|
324.3
|
|
|
(14.8
|
)
|
|
|
(4.6
|
%)
|
|
|
|
-
|
|
|
1.3
|
|
|
|
(16.1
|
)
|
|
|
(5.0
|
%)
|
Control Technologies
|
|
|
|
292.9
|
|
|
294.3
|
|
|
(1.4
|
)
|
|
|
(0.5
|
%)
|
|
|
|
8.8
|
|
|
0.4
|
|
|
|
(10.6
|
)
|
|
|
(3.6
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Excludes intercompany eliminations
|
Immaterial differences due to rounding
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs Adjusted Segment Operating Income & Operating Margin
|
Fourth Quarter 2016 & 2015
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3M 2016
|
|
|
3M 2016
|
|
|
3M 2016
|
|
|
3M 2015
|
|
|
3M 2015
|
|
|
3M 2015
|
|
|
% Change
|
|
|
% Change
|
|
|
|
|
|
|
As Reported
|
|
|
Special Items
|
|
|
As Adjusted
|
|
|
As Reported
|
|
|
Special Items
|
|
|
As Adjusted
|
|
|
As Reported 2016 vs. 2015
|
|
|
As Adjusted 2016 vs. 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
212.1
|
|
|
|
|
|
212.1
|
|
|
300.1
|
|
|
|
|
|
300.1
|
|
|
(29.3%)
|
|
|
(29.3%)
|
|
|
Motion Technologies
|
|
|
|
228.1
|
|
|
|
|
|
228.1
|
|
|
211.7
|
|
|
|
|
|
211.7
|
|
|
7.7%
|
|
|
7.7%
|
|
|
Interconnect Solutions
|
|
|
|
79.8
|
|
|
|
|
|
79.8
|
|
|
85.1
|
|
|
|
|
|
85.1
|
|
|
(6.2%)
|
|
|
(6.2%)
|
|
|
Control Technologies
|
|
|
|
69.8
|
|
|
|
|
|
69.8
|
|
|
71.1
|
|
|
|
|
|
71.1
|
|
|
(1.8%)
|
|
|
(1.8%)
|
|
|
Intersegment eliminations
|
|
|
|
(1.4)
|
|
|
|
|
|
(1.4)
|
|
|
(1.2)
|
|
|
|
|
|
(1.2)
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
|
|
588.4
|
|
|
|
|
|
588.4
|
|
|
666.8
|
|
|
|
|
|
666.8
|
|
|
(11.8%)
|
|
|
(11.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
6.6%
|
|
|
180
|
|
BP
|
8.4%
|
|
|
15.1%
|
|
|
(180)
|
|
BP
|
13.3%
|
|
|
(850)
|
|
BP
|
(490)
|
|
BP
|
Motion Technologies
|
|
|
|
11.7%
|
|
|
60
|
|
BP
|
12.3%
|
|
|
7.3%
|
|
|
520
|
|
BP
|
12.5%
|
|
|
440
|
|
BP
|
(20)
|
|
BP
|
Interconnect Solutions
|
|
|
|
8.1%
|
|
|
20
|
|
BP
|
8.3%
|
|
|
5.4%
|
|
|
20
|
|
BP
|
5.6%
|
|
|
270
|
|
BP
|
270
|
|
BP
|
Control Technologies
|
|
|
|
17.3%
|
|
|
230
|
|
BP
|
19.6%
|
|
|
2.7%
|
|
|
810
|
|
BP
|
10.8%
|
|
|
1,460
|
|
BP
|
880
|
|
BP
|
Total Operating Segments
|
|
|
|
10.0%
|
|
|
130
|
|
BP
|
11.3%
|
|
|
10.1%
|
|
|
170
|
|
BP
|
11.8%
|
|
|
(10)
|
|
BP
|
(50)
|
|
BP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
13.9
|
|
|
4.0
|
|
|
17.9
|
|
|
45.3
|
|
|
(5.5)
|
|
|
39.8
|
|
|
(69.3%)
|
|
|
(55.0%)
|
|
|
Motion Technologies
|
|
|
|
26.6
|
|
|
1.5
|
|
|
28.1
|
|
|
15.4
|
|
|
11.0
|
|
|
26.4
|
|
|
72.7%
|
|
|
6.4%
|
|
|
Interconnect Solutions
|
|
|
|
6.5
|
|
|
0.1
|
|
|
6.6
|
|
|
4.6
|
|
|
0.2
|
|
|
4.8
|
|
|
41.3%
|
|
|
37.5%
|
|
|
Control Technologies
|
|
|
|
12.1
|
|
|
1.6
|
|
|
13.7
|
|
|
1.9
|
|
|
5.8
|
|
|
7.7
|
|
|
536.8%
|
|
|
77.9%
|
|
|
Total Segment Operating Income
|
|
|
|
59.1
|
|
|
7.2
|
|
|
66.3
|
|
|
67.2
|
|
|
11.5
|
|
|
78.7
|
|
|
(12.1%)
|
|
|
(15.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Immaterial differences due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special items include, but are not limited to, restructuring and
realignment costs, certain asset impairment charges,
acquisition-related expenses,
|
and other unusual or infrequent operating items.
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs Adjusted Segment Operating Income & Operating Margin
|
Full Year 2016 & 2015
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12M 2016
|
|
|
12M 2016
|
|
|
12M 2016
|
|
|
12M 2015
|
|
|
12M 2015
|
|
|
12M 2015
|
|
|
% Change
|
|
|
% Change
|
|
|
|
|
|
|
As Reported
|
|
|
Special Items
|
|
|
As Adjusted
|
|
|
As Reported
|
|
|
Special Items
|
|
|
As Adjusted
|
|
|
As Reported 2016 vs. 2015
|
|
|
As Adjusted 2016 vs. 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
830.1
|
|
|
|
|
|
830.1
|
|
|
1,113.8
|
|
|
|
|
|
1,113.8
|
|
|
(25.5%)
|
|
|
(25.5%)
|
|
|
Motion Technologies
|
|
|
|
983.4
|
|
|
|
|
|
983.4
|
|
|
767.2
|
|
|
|
|
|
767.2
|
|
|
28.2%
|
|
|
28.2%
|
|
|
Interconnect Solutions
|
|
|
|
309.6
|
|
|
|
|
|
309.6
|
|
|
328.1
|
|
|
|
|
|
328.1
|
|
|
(5.6%)
|
|
|
(5.6%)
|
|
|
Control Technologies
|
|
|
|
287.0
|
|
|
|
|
|
287.0
|
|
|
281.2
|
|
|
|
|
|
281.2
|
|
|
2.1%
|
|
|
2.1%
|
|
|
Intersegment eliminations
|
|
|
|
(4.7)
|
|
|
|
|
|
(4.7)
|
|
|
(4.7)
|
|
|
|
|
|
(4.7)
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
|
|
2,405.4
|
|
|
|
|
|
2,405.4
|
|
|
2,485.6
|
|
|
|
|
|
2,485.6
|
|
|
(3.2%)
|
|
|
(3.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
4.0%
|
|
|
340
|
|
BP
|
7.4%
|
|
|
12.7%
|
|
|
40
|
|
BP
|
13.1%
|
|
|
(870)
|
|
BP
|
(570)
|
|
BP
|
Motion Technologies
|
|
|
|
17.4%
|
|
|
70
|
|
BP
|
18.1%
|
|
|
16.5%
|
|
|
170
|
|
BP
|
18.2%
|
|
|
90
|
|
BP
|
(10)
|
|
BP
|
Interconnect Solutions
|
|
|
|
6.2%
|
|
|
-
|
|
BP
|
6.2%
|
|
|
3.7%
|
|
|
210
|
|
BP
|
5.8%
|
|
|
250
|
|
BP
|
40
|
|
BP
|
Control Technologies
|
|
|
|
16.1%
|
|
|
250
|
|
BP
|
18.6%
|
|
|
15.1%
|
|
|
260
|
|
BP
|
17.7%
|
|
|
100
|
|
BP
|
90
|
|
BP
|
Total Operating Segments
|
|
|
|
11.2%
|
|
|
180
|
|
BP
|
13.0%
|
|
|
13.0%
|
|
|
130
|
|
BP
|
14.3%
|
|
|
(180)
|
|
BP
|
(130)
|
|
BP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Process
|
|
|
|
33.5
|
|
|
28.0
|
|
|
61.5
|
|
|
141.2
|
|
|
4.7
|
|
|
145.9
|
|
|
(76.3%)
|
|
|
(57.8%)
|
|
|
Motion Technologies
|
|
|
|
171.4
|
|
|
6.7
|
|
|
178.1
|
|
|
126.4
|
|
|
13.1
|
|
|
139.5
|
|
|
35.6%
|
|
|
27.7%
|
|
|
Interconnect Solutions
|
|
|
|
19.1
|
|
|
0.1
|
|
|
19.2
|
|
|
12.2
|
|
|
6.7
|
|
|
18.9
|
|
|
56.6%
|
|
|
1.6%
|
|
|
Control Technologies
|
|
|
|
46.1
|
|
|
7.4
|
|
|
53.5
|
|
|
42.4
|
|
|
7.5
|
|
|
49.9
|
|
|
8.7%
|
|
|
7.2%
|
|
|
Total Segment Operating Income
|
|
|
|
270.1
|
|
|
42.2
|
|
|
312.3
|
|
|
322.2
|
|
|
32.0
|
|
|
354.2
|
|
|
(16.2%)
|
|
|
(11.8%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Immaterial differences due to rounding.
|
|
Special items include, but are not limited to, restructuring and
realignment costs, certain asset impairment charges,
acquisition-related expenses,
|
and other unusual or infrequent operating items.
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Adjusted Income from Continuing Operations &
Adjusted EPS
|
Fourth Quarter 2016 & 2015
|
(In Millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2016
|
|
|
Non-GAAP
|
|
|
Q4 2016
|
|
|
|
Q4 2015
|
|
|
Non-GAAP
|
|
|
Q4 2015
|
|
|
2016 vs. 2015
|
|
|
2016 vs. 2015
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income
|
59.1
|
|
|
7.2
|
|
#A
|
66.3
|
|
|
|
67.2
|
|
|
11.5
|
|
#A
|
78.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate (Expense)
|
(35.5)
|
|
|
27.2
|
|
#B
|
(8.3)
|
|
|
|
(13.4)
|
|
|
6.3
|
|
#B
|
(7.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
23.6
|
|
|
34.4
|
|
|
58.0
|
|
|
|
53.8
|
|
|
17.8
|
|
|
71.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense)
|
1.3
|
|
|
(0.5)
|
|
#C
|
0.8
|
|
|
|
0.2
|
|
|
(1.0)
|
|
#C
|
(0.8)
|
|
|
|
|
|
|
Other Income (Expense)
|
(0.3)
|
|
|
-
|
|
|
(0.3)
|
|
|
|
(0.5)
|
|
|
-
|
|
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations before Tax
|
24.6
|
|
|
33.9
|
|
|
58.5
|
|
|
|
53.5
|
|
|
16.8
|
|
|
70.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense)
|
(0.7)
|
|
|
(14.9)
|
|
#D
|
(15.6)
|
|
|
|
(17.1)
|
|
|
(0.7)
|
|
#D
|
(17.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
23.9
|
|
|
19.0
|
|
|
42.9
|
|
|
|
36.4
|
|
|
16.1
|
|
|
52.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Non Controlling Interest
|
0.3
|
|
|
-
|
|
|
0.3
|
|
|
|
(0.2)
|
|
|
-
|
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc.
|
23.6
|
|
|
19.0
|
|
|
42.6
|
|
|
|
36.6
|
|
|
16.1
|
|
|
52.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from Continuing Operations
|
0.27
|
|
|
0.21
|
|
|
0.48
|
|
|
|
0.40
|
|
|
0.18
|
|
|
0.58
|
|
|
(0.10)
|
|
|
(17.2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not calculate due to rounding.
|
|
#A - 2016 includes restructuring and realignment costs ($2.3M);
acquisition related costs ($1.5M) and pension settlement costs
($3.4M).
|
#A - 2015 includes restructuring and realignment costs ($7.0M),
and net acquisition related costs ($4.5M).
|
|
#B - 2016 includes restructuring costs ($1.3M), certain costs
associated with sale of excess property ($1.9M), pension settlement
costs ($9.3M) and asbestos related expense ($14.7M).
|
#B - 2015 includes income of ($3.2M) related to an environmental
insurance receivable offset by ($1.2M) franchise tax audit and net
asbestos related expense of ($8.3M).
|
Note: ($8.3M) net asbestos related expense includes adjustment to
maintain 10 year accrual ($16.0M), and ($7.7M) favorable settlement
agreement.
|
|
#C - Interest income for a change in uncertain tax position for
both 2016 & 2015.
|
|
#D - 2016 includes various tax-related special items, including net
tax benefit on valuation allowance changes, tax true-ups, and
changes in uncertain tax positions ($0.7M),
|
net tax benefit of foreign earnings ($1.3M), in addition to the tax
benefit of other operating special items ($12.2M).
|
#D - 2015 includes various tax-related special items including tax
expense related to change in valuation allowance ($7.2M) and tax on
undistributed foreign earnings ($3.4M), offset
|
by the tax benefit of other operating special items ($9.9M).
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Reported vs. Adjusted Income from Continuing Operations &
Adjusted EPS
|
Full Year 2016 & 2015
|
(In Millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent Change
|
|
12M 2016
|
|
|
Non-GAAP
|
|
|
12M 2016
|
|
|
|
12M 2015
|
|
|
Non-GAAP
|
|
|
12M 2015
|
|
|
2016 vs. 2015
|
|
|
2016 vs. 2015
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
As Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income
|
270.1
|
|
|
42.2
|
|
#A
|
312.3
|
|
|
|
322.2
|
|
|
32.0
|
|
#A
|
354.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate (Expense)
|
(11.2)
|
|
|
(11.7)
|
|
#B
|
(22.9)
|
|
|
|
57.9
|
|
|
(93.0)
|
|
#B
|
(35.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
258.9
|
|
|
30.5
|
|
|
289.4
|
|
|
|
380.1
|
|
|
(61.0)
|
|
|
319.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Income (Expense)
|
0.8
|
|
|
(3.4)
|
|
#C
|
(2.6)
|
|
|
|
2.5
|
|
|
(5.2)
|
|
#C
|
(2.7)
|
|
|
|
|
|
|
Other Income (Expense)
|
(1.3)
|
|
|
-
|
|
|
(1.3)
|
|
|
|
(0.3)
|
|
|
(1.6)
|
|
#D
|
(1.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations before Tax
|
258.4
|
|
|
27.1
|
|
|
285.5
|
|
|
|
382.3
|
|
|
(67.8)
|
|
|
314.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Expense)
|
(76.0)
|
|
|
(0.9)
|
|
#E
|
(76.9)
|
|
|
|
(70.1)
|
|
|
(12.9)
|
|
#E
|
(83.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
182.4
|
|
|
26.2
|
|
|
208.6
|
|
|
|
312.2
|
|
|
(80.7)
|
|
|
231.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Non Controlling Interest
|
0.5
|
|
|
-
|
|
|
0.5
|
|
|
|
(0.2)
|
|
|
-
|
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc.
|
181.9
|
|
|
26.2
|
|
|
208.1
|
|
|
|
312.4
|
|
|
(80.7)
|
|
|
231.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS from Continuing Operations
|
2.02
|
|
|
0.30
|
|
|
2.32
|
|
|
|
3.44
|
|
|
(0.89)
|
|
|
2.55
|
|
|
(0.23)
|
|
|
(9.0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not calculate due to rounding.
|
|
#A - 2016 includes restructuring and realignment costs ($28.9M);
acquisition related costs ($5.8M); impairment of trade name ($4.1M)
and pension settlement costs ($3.4M).
|
#A - 2015 includes restructuring and realignment costs ($26.2M), net
acquistion related costs ($7.8M), and contract loss in Venezuela
($2.0M).
|
|
#B - 2016 includes restructuring costs ($1.8M), certain costs
associated primarily with sale of excess property ($2.8M), pension
settlement costs ($9.3M); asbestos related income ($25.6M).
|
Note: ($25.6M) net asbestos related income includes adjustment to
maintain 10 year accrual ($59.0M), remeasurement income ($81.8M) and
insurance settlements ($2.8M).
|
#B - 2015 income includes repositioning and restructuring costs
($0.4M), franchise tax audit ($1.2M) offset by income of ($3.2M)
related to an environmental insurance receivable and net asbestos
related income of ($91.4M).
|
Note: ($91.4M) net asbestos related income includes ($100.7M) for
favorable defense counsel realignment and ($44.8M) for the annual
measurement,
|
($8.9M) for a favorable settlement agreement and ($63.0M) asbestos
related expense.
|
|
#C - Interest income for a change in uncertain tax position for
both 2016 & 2015.
|
|
#D - 2015 Other income related to recognition of receivable entitled
under the Tax Matters Agreement.
|
|
#E - 2016 includes various tax-related special items including tax
expense of foreign earnings ($24.7M), tax benefit for changes in
uncertain tax positions and
|
tax true-ups ($18.5M), in addition to the tax benefit of other
operating special items ($6.8M).
|
#E - 2015 includes various tax-related special items including tax
benefit related to change in uncertain tax positions ($15.1M), audit
settlements ($7.0M), release of valuation allowance ($7.3M), tax
benefit
|
resulting from decrease in tax liability for undistributed foreign
earnings ($7.4M), offset by the tax expense of other operating
special items ($24.3M).
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
Net Cash - Operating Activities vs. Adjusted Free Cash Flow
Conversion
|
Full Year 2016 & 2015
|
(In Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12M 2016
|
|
|
|
|
12M 2015
|
|
|
|
|
|
|
|
|
|
|
Net Cash - Operating Activities
|
|
|
|
240.7
|
|
|
|
|
229.7
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
|
|
|
111.4
|
|
|
|
|
86.7
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
|
|
|
|
129.3
|
|
|
|
|
143.0
|
|
|
|
|
|
|
|
|
|
|
Realignment Related Cash Payments, including Capex
|
|
|
|
4.5
|
|
|
|
|
2.9
|
|
Restructuring Cash Payments
|
|
|
|
30.3
|
|
|
|
|
24.4
|
|
Asbestos Cash Payments, net
|
|
|
|
31.5
|
|
|
|
|
24.6
|
|
Discretionary Pension Contributions, net of tax
|
|
|
|
4.9
|
|
|
|
|
4.7
|
|
Adjusted Free Cash Flow
|
|
|
|
200.5
|
|
|
|
|
199.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc.
|
|
|
|
181.9
|
|
|
|
|
312.4
|
|
|
|
|
|
|
|
|
|
|
Special Items
|
|
|
|
26.2
|
|
|
|
|
(80.7
|
)
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations - ITT Inc., Excluding
|
|
|
|
|
|
|
|
|
Special Items
|
|
|
|
208.1
|
|
|
|
|
231.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow Conversion
|
|
|
|
96.3
|
%
|
|
|
|
86.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
ITT Inc. Non-GAAP Reconciliation
|
GAAP vs. Adjusted EPS Guidance
|
Full Year 2017
|
|
|
|
|
|
2017 Full-Year Guidance
|
|
Low
|
|
High
|
|
|
|
|
EPS from Continuing Operations - GAAP
|
$
|
1.45
|
|
$
|
1.75
|
|
|
|
|
Estimated Asbestos Related Costs, Net of Tax
|
|
0.41
|
|
|
0.41
|
|
|
|
|
|
$
|
1.86
|
|
$
|
2.16
|
|
|
|
|
Estimated Restructuring, Realignment and Other Costs, Net of Tax
|
|
0.25
|
|
|
0.25
|
|
|
|
|
Acquisition Related Costs, Net of Tax
|
|
0.07
|
|
|
0.07
|
|
|
|
|
|
|
|
|
EPS from Continuing Operations - Adjusted
|
$
|
2.18
|
|
$
|
2.48
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170214005424/en/
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