-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V7iAZbCUNJOSTlZT1TjTEHoTV+Fo5+8dOAtbU180Zv7RICf+Hcc6F5FgWePl8cy3 or5YEdwql+CM/O7AVPOZzg== 0000950124-98-000112.txt : 19980112 0000950124-98-000112.hdr.sgml : 19980112 ACCESSION NUMBER: 0000950124-98-000112 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19980109 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITT CORP /NV/ CENTRAL INDEX KEY: 0001001149 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS, ROOMING HOUSE, CAMPS & OTHER LODGING PLACES [7000] IRS NUMBER: 880340591 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 001-13960 FILM NUMBER: 98503549 BUSINESS ADDRESS: STREET 1: 1330 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2122581000 MAIL ADDRESS: STREET 1: 1330 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: ITT DESTINATIONS INC DATE OF NAME CHANGE: 19950920 10-K/A 1 ANNUAL REPORT AMD #2 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 205490 ------------------------ FORM 10-K/A (AMENDMENT NO. 2) ANNUAL REPORT (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NO. 1-13960 ------------------------ ITT CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEVADA 88-0340591 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1330 AVENUE OF THE AMERICAS, NEW YORK, NY 10019-5490 (PRINCIPAL EXECUTIVE OFFICES) TELEPHONE NUMBER: (212) 258-1000 Securities registered pursuant to Section 12(b) of the Act, all of which are registered on The New York Stock Exchange, Inc.: Common Stock, no par value Series A Participating Cumulative Preferred Stock Purchase Rights 6 1/4% Notes Due November 15, 2000 6 3/4% Notes Due November 15, 2005 7 3/8% Debentures Due November 15, 2015 7 3/4% Debentures Due November 15, 2025 Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |x| No | | Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |x| The aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant on March 24, 1997, was approximately $7.0 billion. As of March 24, 1997, there were outstanding 116,429,113 shares of Common Stock, no par value, of the registrant. DOCUMENTS INCORPORATED BY REFERENCE None. The undersigned registrant, ITT Corporation ("ITT", which may also be referred to as "we" or "us"), hereby amends the following Items of its Annual Report on Form 10-K for the year ended December 31, 1996 as set forth in the pages attached hereto: Item 1. Business Item 3. Legal Proceedings ================================================================================ 2 PART I ITEM 1. BUSINESS The information contained in "Item 1. Business" of the Annual Report on Form 10-K for the year ended December 31, 1996, as amended by the Form 10-K/A dated April 30, 1997 of ITT (the "Form 10-K") is hereby supplemented by adding the following: OWNED AND LEASED HOTELS The following table illustrates, for owned and leased properties classified by geographic region and hotel type, the average number of years since purchase or major renovation, total revenues (in millions), average daily occupancy rate, average daily room rate, average revenue per available room ("REVPAR"), total number of rooms at period end and the total number of properties at period end. The amounts shown in the table reflect the U.S. dollar equivalent of all local currencies; in some cases, currency fluctuations may have an adverse effect on the comparison of any region or individual property for the periods presented.
NINE MONTHS NINE MONTHS ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 DEC. 31, 1996 DEC. 31, 1995(4) ------------------ ------------------ ------------- ---------------- NORTH AMERICA - LUXURY: Average number of years since 5 8 8 7 purchase or major renovation... Total revenues................... $151.4 $133.8 $193.3 $174.8 Average daily occupancy 78% 77% 75% 72% rate(1)........................ Average daily rate(2)............ $ 324 $ 304 $ 309 $ 280 REVPAR(3)........................ $ 247 $ 229 $ 231 $ 201 Number of rooms at period end.... 1,152 1,091 1,145 1,091 Number of properties at period 3 3 3 3 end............................ NORTH AMERICA - UPSCALE: Average number of years since 4 4 4 5 purchase or major renovation... Total revenues................... $379.3 $ 370 $520.7 $434.2 Average daily occupancy 75% 74% 72% 73% rate(1)........................ Average daily rate(2)............ $ 149 $ 134 $ 137 $ 120 REVPAR(3)........................ $ 110 $ 99 $ 99 $ 87 Number of rooms at period end.... 7,916 10,180 9,797 9,419 Number of properties at period 13 18 18 16 end............................ NORTH AMERICA - TOTAL: Average number of years since 5 5 5 5 purchase or major renovation... Total revenues................... $530.6 $503.8 $714.0 $609.0 Average daily occupancy 75% 75% 72% 73% rate(1)........................ Average daily rate(2)............ $ 169 $ 151 $ 155 $ 136 REVPAR(3)........................ $ 126 $ 111 $ 112 $ 99 Number of rooms at period end.... 9,070 11,271 10,942 10,510 Number of properties at period 16 21 21 19 end............................
2 3
NINE MONTHS NINE MONTHS ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 DEC. 31, 1996 DEC. 31, 1995(4) ------------------ ------------------ ------------- ---------------- EUROPE / CIGA - LUXURY: Average number of years since 3 2 2 1 purchase or major renovation... Total revenues................... $253.2 $253.2 $263.3 $251.9 Average daily occupancy rate 71% 68% 66% 65% (1)............................ Average daily rate(2)............ $ 234 $ 228 $ 225 $ 203 REVPAR(3)........................ $ 163 $ 154 $ 149 $ 131 Number of rooms at period end.... 4,085 4,205 3,188 3,290 Number of properties at period 18 18 17 17 end............................ EUROPE / CIGA - UPSCALE: Average number of years since 5 4 4 3 purchase or major renovation... Total revenues................... $151.1 $141.8 $218.5 $156.0 Average daily occupancy 75% 73% 72% 73% rate(1)........................ Average daily rate(2)............ $ 123 $ 125 $ 129 $ 123 REVPAR(3)........................ $ 91 $ 90 $ 93 $ 90 Number of rooms at period end.... 3,829 3,528 4,434 4,113 Number of properties at period 15 15 15 21 end............................ EUROPE / CIGA - TOTAL: Average number of years since 4 3 3 2 purchase or major renovation... Total revenues................... $404.3 $ 395 $481.8 $407.9 Average daily occupancy 73% 71% 69% 69% rate(1)........................ Average daily rate(2)............ $ 169 $ 174 $ 171 $ 160 REVPAR(3)........................ $ 122 $ 121 $ 119 $ 110 Number of rooms at period end.... 7,914 7,733 7,622 7,403 Number of properties at period 33 33 32 38 end............................ AFRICA / MIDDLE EAST - UPSCALE AND TOTAL: Average number of years since N/A(5) 16 16 15 purchase or major renovation... Total revenues................... -- $ 1.7 $ 2.5 $ 1.2 Average daily occupancy -- 65% 67% 58% rate(1)........................ Average daily rate(2)............ -- $ 11 $ 11 $ 11 REVPAR(3)........................ -- $ 7 $ 7 $ 7 Number of rooms at period end.... -- 164 164 164 Number of properties at period -- 2 2 2 end............................ LATIN AMERICA - LUXURY: Average number of years since 6 16 6 9 purchase or major renovation... Total revenues................... $ 25.5 $ 17.0 $ 25.9 $ 22.2 Average daily occupancy 64% 67% 63% 72% rate(1)........................ Average daily rate(2)............ $ 257 $ 245 $ 238 $ 196 REVPAR(3)........................ $ 160 $ 161 $ 150 $ 141 Number of rooms at period end.... 425 425 425 244 Number of properties at period 2 2 2 1 end............................
3 4
NINE MONTHS NINE MONTHS ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 DEC. 31, 1996 DEC. 31, 1995(4) ------------------ ------------------ ------------- ---------------- LATIN AMERICA - UPSCALE: Average number of years since 11 14 14 13 purchase or major renovation... Total revenues................... $133.5 $122.8 $172.3 $152.8 Average daily occupancy 73% 76% 69% 69% rate(1)........................ Average daily rate(2)............ $ 104 $ 99 $ 98 $ 96 REVPAR(3)........................ $ 75 $ 74 $ 67 $ 66 Number of rooms at period end.... 4,247 4,008 4,008 44,034 Number of properties at period 9 8 8 8 end............................ LATIN AMERICA - TOTAL: Average number of years since 10 13 13 12 purchase or major renovation... Total revenues................... $159.0 $139.9 $198.2 $175.0 Average daily occupancy 72% 76% 68% 69% rate(1)........................ Average daily rate(2)............ $ 117 $ 107 $ 106 $ 103 REVPAR(3)........................ $ 83 $ 80 $ 73 $ 71 Number of rooms at period end.... 4,672 4,433 4,433 4,278 Number of properties at period 11 10 10 9 end............................ ASIA PACIFIC - LUXURY: Average number of years since 2 1 1 1 purchase or major renovation... Total revenues................... $ 36.7 $ 33.6 $ 14.5 $ 33.8 Average daily occupancy 82% 80% 84% 74% rate(1)........................ Average daily rate(2)............ $ 168 $ 160 $ 173 $ 130 REVPAR(3)........................ $ 135 $ 125 $ 145 $ 97 Number of rooms at period end.... 559 559 559 -- Number of properties at period 1 1 1 -- end............................ ASIA PACIFIC - UPSCALE: Average number of years since 2 2 2 1 purchase or major renovation... Total revenues................... $ 24.2 N/A(5) $ 16.1 $ 17.2 Average daily occupancy 72% 77% 76% 76% rate(1)........................ Average daily rate(2)............ $ 146 $ 145 $ 142 $ 104 REVPAR(3)........................ $ 100 $ 109 $ 108 $ 79 Number of rooms at period end.... 561 567 567 391 Number of properties at period 2 2 2 -- end
4 5
NINE MONTHS NINE MONTHS ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 DEC. 31, 1996 DEC. 31, 1995(4) ------------------ ------------------ ------------- ---------------- ASIA PACIFIC - TOTAL: Average number of years since 1 1 1 0 purchase or major renovation... Total revenues................... $ 60.9 $ 39.9 $ 30.6 $ 51.0 Average daily occupancy 77% 79% 79% 75% rate(1)........................ Average daily rate(2)............ $ 158 $ 157 $ 154 $ 119 REVPAR(3)........................ $ 117 $ 122 $ 122 $ 89 Number of rooms at period end.... 1,120 1,126 1,126 391 Number of properties at period 3 3 3 -- end............................
- --------------- (1) Occupied rooms in the period divided by rooms available for sale in the same period. (2) Room revenues for the period divided by rooms occupied for the same period. (3) Revenue per available room ("REVPAR") was computed as room revenue divided by rooms available for sale. (4) Certain hotel property results for 1995 have been reclassified for an appropriate comparison with 1996. (5) There were no properties in this geographic region for the period presented. MANAGED AND JOINT VENTURE HOTELS Through subsidiaries ITT manages, usually under long-term agreements with the owner, a number of hotels throughout the world. The following table illustrates, for managed and joint venture properties, classified by geographic region, total revenues (in millions), average daily occupancy rate, average daily rate, average REVPAR, total number of rooms and the total number of properties. The amounts shown in the table reflect the U.S. dollar equivalent of all local currencies; in some cases, currency fluctuations may have an adverse effect on the comparison of any region or individual property for the periods presented.
NINE MONTHS NINE MONTHS ENDED ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 DEC. 31, 1996 DEC. 31, 1995(4) ------------------ ------------------ ------------- ---------------- NORTH AMERICA: Total revenues................... $1,034.1 $950.1 $1,231.0 $1,182.6 Average daily occupancy rate(1)........................ 76% 76% 72% 74% Average daily rate(2)............ $148 $139 $139 $126 REVPAR(3)........................ $111 $104 $101 $93 Number of rooms at period end.... 23,829 21,785 22,091 21,790 Number of properties at period end............................ 42 37 37 38 EUROPE / CIGA: Total revenues................... $274.9 $279.2 $444.9 $385.0 Average daily occupancy rate(1)........................ 70% 71% 69% 70% Average daily rate(2)............ $138 $142 $140 $134 REVPAR(3)........................ $95 $99 $97 $93 Number of rooms at period end.... 7,066 7,110 7,339 7,534 Number of properties at period end............................ 24 23 26 27 AFRICA / MIDDLE EAST: Total revenues................... $293.7 $268.7 $382.8 $354.5 Average daily occupancy rate(1)........................ 65% 62% 61% 59% Average daily rate(2)............ $89 $92 $91 $87 REVPAR(3)........................ $57 $56 $55 $51 Number of rooms at period end.... 9,787 8,999 9,244 8,923 Number of properties at period end............................ 36 33 34 33
5 6
NINE MONTHS YEAR ENDED YEAR ENDED NINE MONTHS ENDED ENDED DEC. 31, DEC. 31, SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 1996 1995(4) ------------------ ------------------ ------------ -------------- LATIN AMERICA: Total revenues........................... $24.9 $16.2 $21.0 $38.9 Average daily occupancy rate (1)......... 57% 69% 59% 67% Average daily rate (2)................... $87 $66 $66 $78 REVPAR (3)............................... $49 $45 $39 $52 Number of rooms at period end............ 1,272 890 1,084 890 Number of properties at period end....... 5 3 4 3 ASIA PACIFIC: Total revenues........................... $524.8 $540.0 $790.9 $737.8 Average daily occupancy rate (1)......... 69% 71% 68% 73% Average daily rate (2)................... $134 $139 $138 $134 REVPAR (3)............................... $90 $97 $93 $97 Number of rooms at period end............ 12,175 11,788 11,790 10,630 Number of properties at period end....... 37 34 34 33
- --------------- (1) Occupied rooms in the period divided by rooms available for sale in the same period. (2) Room revenues for the period divided by rooms occupied for the same period. (3) Revenue per available room ("REVPAR") was computed as room revenue divided by rooms available for sale. (4) Certain hotel property results for 1995 have been reclassified for an appropriate comparison with 1996. ITEM 3. LEGAL PROCEEDINGS The information contained in "Item 3. Legal Proceedings" of the Form 10-K is hereby amended by replacing it in its entirety with the following: On January 27, 1997, a complaint (the "Hilton Complaint") captioned Hilton Hotels Corporation and HLT Corporation v. ITT Corporation was filed against us in the U.S. District Court for the District of Nevada (the "Nevada Federal Court"). The Hilton Complaint requested the Nevada Federal Court, among other things: (i) to enjoin us from amending our by-laws "in any way that would impede the effective exercise of the stockholder franchise in connection with the 1997 annual meeting", from materially delaying our annual meeting, and from increasing the size of the Board "in order to preserve the position of incumbent directors", (ii) to require the Board to redeem our preferred stock purchase rights and to make inapplicable to the Hilton Transaction the Nevada Control Share Acquisition Statute and the Nevada Business Combination Statute and (iii) to declare that we do not have standing to institute an action under the Federal anti-trust laws to block or impede the Hilton Transaction and that, in any event, the consummation of the Hilton Transaction would not violate such laws. On January 27, 1997, Hilton and HLT filed a motion in the Nevada Federal Court for a preliminary injunction (the "Hilton Preliminary Injunction Motion") seeking to enjoin us (i) from increasing the size of the Board or, alternatively, requiring us to give Hilton the opportunity to supplement the individuals it nominates for the Board and (ii) from amending our by-laws "to impede in any way the effective exercise of the stockholder franchise in connection with electing directors" at the 1997 annual meeting. Following a hearing on the preliminary injunction on March 5, 1997, the Nevada Federal Court issued an order denying the Hilton Preliminary Injunction Motion. On February 12, 1997, we filed an answer and counterclaims to the Hilton Complaint denying all material allegations of the Hilton Complaint. The counterclaims seek injunctive relief prohibiting Hilton from proceeding with the Hilton Offer which is tainted by Hilton's misappropriation and misuse of our confidential information and other relief to prevent Hilton from benefitting from access to our confidential information. These counterclaims also seek injunctive relief, in the event the Hilton Offer is not enjoined, requiring Hilton to correct material inadequacies in the Schedule 14D-1 filed by Hilton with the Securities and Exchange Commission by disclosing and filing the information required under the Federal securities laws. 6 7 On February 26, 1997, Hilton filed a motion for a preliminary injunction in the Nevada Federal Court seeking to require us to hold our annual meeting in May 1997. On March 13, 1997, we filed a memorandum in opposition to Hilton's motion. On March 25, 1997, Hilton filed a reply memorandum. On April 21, 1997, the Nevada Federal Court issued an order denying Hilton's motion for a preliminary injunction. Hilton appealed the denial of its motion to the United States Court of Appeals for the Ninth Circuit. On June 19, 1997, the appeals court issued an order affirming the Nevada Federal Court's denial of Hilton's motion. On February 13, 1997, we filed a motion in the Nevada Federal Court for an injunction (the "Counsel Motion") requiring Hilton to discharge Latham & Watkins as its counsel. The Counsel Motion sought (i) an order requiring Hilton to dismiss Latham & Watkins as its counsel in connection with the Hilton Offer or, in the alternative, (ii) a preliminary injunction enjoining Hilton from seeking Latham & Watkins' counsel until the court can review the merits of the Counsel Motion. On March 12, 1997, the Nevada Federal Court issued an order denying the Counsel Motion. On June 12, 1997, Hilton filed a first amended and supplemental complaint (the "First Amended and Supplemental Hilton Complaint") in the Nevada U.S. Federal Court. In addition to the relief sought in the Hilton Complaint, the First Amended and Supplemental Hilton Complaint asked the court, among other things, (i) to enjoin ITT from further delaying our annual meeting, (ii) to require ITT to conduct an auction of ITT, (iii) to enjoin ITT from selling any assets without conducting an auction in which Hilton may participate and without stockholder approval, (iv) to require ITT to rescind its transaction with FelCor, (v) to invalidate the change of control provisions in management agreements with FelCor and (vi) to enjoin ITT from entering into any other agreement containing change of control provisions and (vii) to enjoin the Board from taking actions aimed at entrenching themselves in office. On July 2, 1997, we filed a motion to dismiss certain counts included in the First Amended and Supplemental Hilton Complaint or, in the alternative, for partial summary judgment in the Nevada Federal Court. On September 10, 1997, the court denied in part and granted in part our motion. On July 16, 1997, we filed a complaint in the Nevada Federal Court seeking, among other relief, a declaratory judgment that Hilton cannot show that, in approving the Comprehensive Plan, the Board acted outside its powers or failed to exercise its powers in good faith with a view to the interests of ITT. We also filed a motion with the court seeking a speedy hearing on our claims. On August 5, 1997, Hilton filed in the Nevada Federal Court answers and counterclaims to our complaint, claiming, among other things, that the Board has breached its fiduciary duties and that ITT made material misstatements and omissions. On August 25, 1997, Hilton filed a motion in the Nevada Federal Court for injunctive and preliminary relief seeking, among other things, to enjoin us from proceeding with the Comprehensive Plan. On September 9, 1997, we filed a memorandum in opposition to Hilton's motion. On September 22, 1997, Hilton filed a reply memorandum in response to ITT's memorandum in opposition. On September 29, 1997, the Nevada Federal Court ruled that we could not consummate the Comprehensive Plan before holding an annual meeting of stockholders where Hilton had an opportunity to nominate a slate of directors. On November 3, 1997, Hilton filed a complaint with the Nevada Federal Court against ITT, certain members of the Board, Starwood Lodging Corporation ("Starwood Corporation"), Starwood Lodging Trust ("Starwood Trust") and Chess Acquisition Corp. ("Chess") seeking monetary damages from the ITT directors, to rescind the Agreement and Plan of Merger date as of October 19, 1997 among Starwood Corporation, Starwood Trust, Chess and ITT (the "Merger Agreement"), to enjoin implementation of the Merger Agreement, to invalidate proxies voted in favor of the ITT directors at our 1997 annual meeting of stockholders and a declaration that the ITT directors are not entitled to indemnification or exculpation from liability under our charter and by-laws. Following the Hilton Offer, a total of eight purported class action suits were filed on behalf of individual plaintiffs against ITT and the Board in state court in Nevada. These complaints were filed in or transferred to the District Court, Clark County Nevada (the "Nevada State Court") and were captioned as follows (with their initial filing date in parentheses): Cohen v. ITT Corp. N.V., et al. (January 28, 1997); Kostick v. Araskog, et al. (January 28, 1997); Bernstein, et al. v. ITT Corp. N.V., et al. (January 28, 1997); Feuerstein, et al. v. ITT Corp. 7 8 N.V., et al. (January 28, 1997); Marks, et al. v. Araskog, et al. (January 28, 1997); Huntley v. ITT Corporation, et al. (January 28, 1997); Steiner v. Araskog, et al. (January 28, 1997); and Cohen v. Araskog, et al (January 29, 1997). On June 3, 1997, these actions were consolidated under the caption Fuerstein, et al. v. ITT Corporation, et al. and stayed by stipulation of the parties. Five purported class action suits were also filed on behalf of individual plaintiffs against ITT and the Board in the Nevada Federal Court. The complaints were captioned as follows (with their initial filing date in parentheses): Collins v. Anderson, et al. (January 28, 1997); Taub, et al. v. Araskog, et al. (January 29, 1997); Kanarek v. Araskog, et al. (February 5, 1997); Halebian v. Araskog, et al. (February 14, 1997); and Cohen, et al. v. Araskog, et al. (February 4, 1997). On March 10, 1997, the cases were consolidated under the caption In re ITT Corporation Securities Litigation. On September 10, 1997, the plaintiffs in that action filed and amended class action complaint and on November 5, 1997, they filed a second amended class action complaint. The first and the second amended class action complaints repeated the allegations made by Hilton in its complaints and counterclaims filed shortly before the filing of these amended class action complaints. The second amended class action complaint was never served on the defendants named therein. On October 10, 1997, a class action complaint captioned Belman v. Araskog, et al. was filed in the Nevada Federal Court. It was never served on the defendants named therein. In addition, four purported class action suits were filed on behalf of individual plaintiffs against ITT and the Board in the Supreme Court of the State of New York. The complaints were captioned as follows (with their initial filing date in parentheses): Siegel v. Araskog, et al. (January 28, 1997); Waltzman v. Anderson., et al. (January 28, 1997); Hack v. ITT Corporation, et al. (January 28, 1997); and Rand v. ITT Corporation, et al. (January 28, 1997). On April 15, 1997, the New York actions were consolidated and dismissed without prejudice to replead. The complaints allege, among other things, that the defendants have breached their fiduciary duties to ITT's stockholders by failing to maximize stockholder value. The complaints initially sought, among other things, to compel the defendants to carry out their fiduciary duties and to cooperate with any person having a bona fide interest in proposing a transaction with ITT which would maximize stockholder value. There have been no other material developments in any of the foregoing actions. In October 1996, a jury sitting in the California Superior Court, San Diego County, returned a verdict in Eldredge, et al. v. ITT Educational Services, et al. against both ITT and ITT Educational. The plaintiffs in Eldredge, seven 1995 graduates of ITT Educational's school in San Diego, alleged, among other things, misrepresentation and violations of a provision of the California Education Code. In the aggregate, the plaintiffs were awarded approximately $0.2 million in compensatory damages and $6.6 million in punitive damages, consisting of $2.6 million against ITT Educational and $4.0 million against ITT. As a result of post trial motions decided in December 1996 and January 1997, the verdict against ITT was set aside and ITT Educational was assessed in excess of $0.9 million in counsel fees, so that the judgment, as entered against only ITT Educational, is in the approximate amount of $3.8 million. All parties have appealed. We believe that it is probable that the judgment against ITT Educational will ultimately be reversed, in whole or substantial part, and that the decision setting aside the verdict against ITT will be affirmed; however, there can be no assurance that these outcomes will occur. Various purported class action suits have been filed against ITT and ITT Educational in California alleging similar claims to those alleged in Eldridge. In addition to the suits described above, there are various lawsuits pending against us and our subsidiaries, some of which involve claims for substantial amounts. However, the ultimate liability with respect to these lawsuits is not considered material in relation to our consolidated financial condition. 8 9 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. ITT CORPORATION By /s/ JON F. DANSKI ------------------------------------ Jon F. Danski Senior Vice President and Controller January 9, 1998 -----END PRIVACY-ENHANCED MESSAGE-----