-----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, Jhf7XGDYcwZAwey/+o0puzhNUeDxOEvHxVF+MtkgtKWIl9NyEf+TOtGctIf4xj7C S5urENjejyYnYjlX1SFmqQ== 0000891092-04-001824.txt : 20040422 0000891092-04-001824.hdr.sgml : 20040422 20040422085249 ACCESSION NUMBER: 0000891092-04-001824 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040422 ITEM INFORMATION: ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITT INDUSTRIES INC CENTRAL INDEX KEY: 0000216228 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 135158950 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05672 FILM NUMBER: 04746843 BUSINESS ADDRESS: STREET 1: FOUR W RED OAK LANE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 9146412058 MAIL ADDRESS: STREET 1: FOUR W RED OAK LANE CITY: WHITE PLAINS STATE: NY ZIP: 10604 FORMER COMPANY: FORMER CONFORMED NAME: ITT CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL TELEPHONE & TELEGRAPH CORP DATE OF NAME CHANGE: 19840321 8-K 1 e17577_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): April 22, 2004 ITT INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Indiana 1-5627 13-5158950 - --------------- ------------ ------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) organization) 4 West Red Oak Lane White Plains, New York 10604 ---------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (914) 641-2000 (Former name or former address if changed since last report) ITEM 9 and ITEM 12. Regulation FD Disclosure and Results of Operations and Financial Condition The following information is furnished pursuant to Item 9 "Regulation FD Disclosure" and Item 12 "Results of Operations and Financial Condition." This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. On April 22, 2004, ITT Industries, Inc. issued a press release providing its financial results for the first quarter of 2004 and updating its previously announced full year 2004 guidance. A copy of this press release is attached and incorporated by reference herein as Exhibit 99.1. Exhibit Index (99.1) Press release dated April 22, 2004 issued by ITT Industries, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ITT INDUSTRIES, INC. By: /s/ Kathleen S. Stolar -------------------------- Kathleen S. Stolar Its: Vice President, Secretary and Associate General Counsel Date: April 22, 2004 EX-99.1 3 e17577ex99_1.txt PRESS RELEASE Exhibit 99.1 ITT Industries Reports First Quarter EPS of $0.94, Raises FY 2004 Guidance * Q1 earnings before benefit of special items $0.92, up 11 percent over comparable $0.83 * Q1 revenue up 17 percent to $1.5 billion; strong organic growth of 10 percent * Long-term growth opportunities continue for Defense, Water/Wastewater, Electronic Components * Positive outlook leads company to raise FY EPS guidance from $4.15-4.25 to $4.40-4.50 WHITE PLAINS, April 22 /PRNewswire-FirstCall/ -- ITT Industries, Inc. (NYSE: ITT) today announced first quarter 2004 net income of $88.9 million, up $2.2 million including the net benefit of special items. Diluted earnings per share (EPS) for the quarter, including the net benefit of special items, was $0.94, up $0.02 per share from reported EPS in the first quarter 2003. During the first quarter 2004, the company realized a $0.05 per share benefit from several tax items, which was partially offset by other special items, primarily restructuring costs, of ($0.03) per share. The net effect of these special items was a $0.02 increase in reported EPS for the first quarter. Adjusting results to exclude the benefit of these special items, earnings for the first quarter 2004 were $0.92, up 11 percent over the comparable adjusted figure of $0.83 for the same period in 2003. "The first quarter was a very good one for us, with strong earnings and double digit organic revenue growth, as we continue to expand our higher margin, high-growth business segments, and continuously improve our operating performance across the company," said Lou Giuliano, Chairman, President and Chief Executive Officer of ITT Industries. "We are accelerating organic top- line and earnings growth, led by our Defense, Water/Wastewater and Electronic Components businesses. We have supported this strategy through new product development and finding better ways to serve our customers, supplemented with strategic acquisitions that create value and improve market strength in our existing businesses. A good example of this is our acquisition of WEDECO, which has significantly enhanced our presence and product offering in the global water treatment market." "Based on our recent assessment of business conditions in all of our segments and the strong first quarter performance, we have raised our earnings target for the year to a range of $4.40-$4.50, up 14-17 percent over adjusted 2003 EPS. Our previous range for 2004 was $4.15-4.25. We now estimate that full-year 2004 revenues will range from $6.4 to $6.6 billion, up 14-18 percent from last year, and are raising our full-year 2004 cash forecast by $25 million." First Quarter Financial Highlights * First quarter 2004 revenues rose 17 percent to $1.5 billion, helped by revenue increases in all four business segments, acquisitions and positive impact of foreign currency translation. Excluding foreign exchange and acquisitions, first quarter revenue grew 10 percent. * Higher revenues and continued process improvements combined to increase net income $2.2 million or 3 percent to $88.9 million or $0.94 per share. Excluding the net benefit of special items of $0.02 per share, earnings for the first quarter 2004 were $0.92, up 11 percent over the comparable adjusted figure of $0.83 for the first quarter 2003. * Segment operating income in the quarter grew 14 percent over the first quarter 2003 to $146.6 million on higher revenue and operational improvements. * In February, the company announced its intention to buy the Remote Sensing Systems (RSS) business of Eastman Kodak for $725 million in cash, complimenting its own space imaging business. Once completed, the acquisition of RSS, combined with ITT's existing space imaging business, will form a new Space Systems division in the Defense Electronics & Services segment, which is expected to generate $600 million in annualized revenue. * The company's first quarter 2004 cash usage from operations was $116 million, which includes a previously announced $100 million voluntary pre-funding of the U.S. Salaried Pension Plan. Adjusted for capital expenditures of $29 million and the pension pre-funding, the company's free cash flow usage was $45 million. First Quarter Segment Highlights Fluid Technology * First quarter 2004 Fluid Technology revenues were $574.9 million, up $71.3 million or 14 percent from the first quarter 2003. Revenue growth was driven by organic growth in water treatment and in the industrial pump group, recent acquisitions and the positive impact of foreign currency translation. Segment operating income was $52.9 million. After adjusting for the effects of restructuring costs, operating income was relatively flat compared to the first quarter 2003, at $55.9 million. Operating margin declined 150 basis points primarily due to start-up costs of acquisitions and foreign currency translation/transaction. * In January, the company completed its acquisition of German-based WEDECO Water Technologies, a world leading provider of ultra-violet and ozone oxidation water treatment systems, and Shanghai-based Hengtong giving ITT the disinfection technology and global reach needed to grow its dynamic wastewater treatment business. Water treatment, which includes biological treatment, filtration, desalinization and disinfection, is the fastest growing segment within the water/wastewater business. * The industrial process pump business saw organic revenue growth of 13 percent, a reflection of progress on its strategy to develop its international business. Growth was particularly strong in the petrochemical market. Defense Electronics & Services * Defense Electronics & Services revenues for the first quarter were $506.5 million, up $115.1 million or 29 percent, due to increased sales at nearly all of the segment's businesses, particularly Night Vision, Aerospace Communication and Systems. Operating income rose $14.3 million or 42 percent to $48.7 million, and operating margin rose 80 basis points on increased sales of higher margin products. The Defense backlog now stands at $3.16 billion, up 5 percent over the first quarter of 2003. * The company is working to develop the next generation technology in space, night vision and communication markets. Initial test results for Night Vision's goggles that combine infrared and light intensification technology are encouraging, boding well for the company's potential participation in the next generation Night Vision program, which is expected to be a $1 billion program over six years. * The Systems division continues to register strong growth through new engineering and technical support contracts for a variety of defense and space agencies. Demand in this area is particularly strong as the Department of Defense looks to contractors to provide critical tasks required to accommodate the global deployment of troops. Motion & Flow Control * Motion & Flow Control revenues for the first quarter were $274.0 million, up $15.9 million or 6 percent on higher volume in motion and leisure marine, and the positive impact of foreign currency translation. Operating income was up $1.1 million to $39.1 million, while operating margin declined 40 basis points. * The businesses within Motion & Flow Control continue to expand, taking existing products and modifying them for new end markets. The company's friction materials unit, a leading provider to the auto market, has begun supplying friction materials for the heavy truck market. Though the truck market for friction materials is in its early stages, the company believes it will provide the opportunity for double digit revenue growth. * The spa-whirlpool business has grown significantly in the last year thanks to new products, the benefits of improved operational performance and strategic outsourcing. Its new Magna whirlpool pump, designed in collaboration with ITT's Goulds unit, provides added pressure and could generate close to $10 million in incremental revenue in the next few years. Electronic Components * Electronic Components revenues rose $17 million or 12 percent to $161.8 million, in line with expectations and reflecting a modest improvement in several of the key markets such as mobile handsets. Organic revenue was up 5 percent in the quarter. First quarter orders were up 34 percent to $192.9 million, with a book to bill ratio of 1.19. Operating income rose $5.7 million to $5.9 million with a corresponding increase in operating margin. Excluding the effects of restructuring, operating income declined $1.8 million to $7.2 million, and operating margin declined 180 basis points from the first quarter 2003. Sequentially, first quarter margin improved 140 basis points. * New customer satisfaction initiatives and new products are driving the growth in the company's connectors and switches for mobile telephones, with multiple new platform wins and higher content per phone. While global handset sales are expected to grow 10 percent this year, we expect our businesses in this market to grow revenues by 25 percent. * Electronic Components continues to take its products to new end markets. Its mechatronic joystick control switches have captured the interest of heavy equipment manufacturers such as Caterpillar. New business with Caterpillar alone in this area is expected to triple to $20 million per year by 2006. About ITT Industries ITT Industries, Inc. (www.itt.com) supplies advanced technology products and services in key markets including: electronic interconnects and switches; defense communication, opto-electronics, information technology and services; fluid and water management and other specialty products. Headquartered in White Plains, NY, the company generated $5.63 billion in 2003 sales. In addition to the New York Stock Exchange, ITT Industries stock is traded on the Midwest, Pacific, Paris and Frankfurt exchanges. Certain material presented herein consists of forward-looking statements which involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in, or implied from, such forward-looking statements. Such factors include general economic conditions, foreign currency exchange rates, competition and other factors all as more thoroughly set forth in Item 1. Business and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements in the ITT Industries, Inc. Form 10-K Annual Report for the fiscal year ended December 31, 2003, and other of its filings with the Securities and Exchange Commission. NOTE: ITT Industries believes that investors' understanding of the company's operating performance is enhanced by the use of certain non-GAAP financial measures, including adjusted GAAP net income and adjusted GAAP EPS, which Management considers useful in providing insight into operating performance, as it excludes the impact of special items that cannot be expected to recur on a quarterly basis. Management also believes that investors can better analyze the company's revenue growth by utilizing an organic revenue growth measure that excludes the effect of foreign exchange translation and the effect of recent acquisitions. In addition, Management considers the use of free cash flow to be an important indication of the company's ability to make acquisitions, fund pension obligations, buy back outstanding shares and service debt. Free cash flow, adjusted net income, adjusted EPS and organic revenue are not financial measures under GAAP, should not be considered as substitutes for cash from operating activities, EPS, net income or revenue as defined by GAAP, and may not be comparable to similarly titled measures reported by other companies. A reconciliation to the GAAP equivalents of these non-GAAP measures is set forth in the attached unaudited financial information. ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED INCOME STATEMENTS (In millions, except per share) (Unaudited) Three Months Ended March 31, 2004 2003 Sales and revenues $1,515.9 $1,296.4 Costs of sales and revenues 1,007.1 846.4 Selling, general and administrative expenses 230.2 200.3 Research, development and engineering expenses 144.9 129.6 Restructuring and asset impairment charges 4.7 10.4 Total costs and expenses 1,386.9 1,186.7 Operating income 129.0 109.7 Interest expense (income), net 1.1 (15.1) Miscellaneous expense 3.6 0.7 Income from continuing operations before income taxes 124.3 124.1 Income tax expense 36.2 37.4 Income from continuing operations 88.1 86.7 Income from discontinued operations, including tax expense of $0.4 0.8 - Net income $88.9 $86.7 Earnings Per Share: Income from continuing operations: Basic $0.95 $0.94 Diluted $0.93 $0.92 Discontinued operations: Basic $0.01 $- Diluted $0.01 $- Net income: Basic $0.96 $0.94 Diluted $0.94 $0.92 Average Common Shares - Basic 92.3 91.8 Average Common Shares - Diluted 94.5 93.7 ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In millions) March 31, December 31, 2004 2003 (Unaudited) Assets Current Assets: Cash and cash equivalents $199.1 $414.2 Receivables, net 1,161.0 974.6 Inventories, net 618.4 578.5 Deferred income taxes 68.1 68.2 Other current assets 86.0 70.0 Total current assets 2,132.6 2,105.5 Plant, property and equipment, net 869.9 893.3 Deferred income taxes 374.7 373.3 Goodwill, net 1,845.6 1,629.1 Other intangible assets, net 79.4 74.8 Other assets 969.1 861.6 Total assets $6,271.3 $5,937.6 Liabilities and Shareholders' Equity Current Liabilities: Accounts payable $689.5 $635.3 Accrued expenses 612.4 653.4 Accrued taxes 276.3 251.9 Notes payable and current maturities of long-term debt 414.6 141.5 Other current liabilities 4.6 4.5 Total current liabilities 1,997.4 1,686.6 Pension and postretirement benefits 1,399.5 1,403.8 Long-term debt 471.6 460.9 Other liabilities 535.7 538.6 Total liabilities 4,404.2 4,089.9 Shareholders' equity 1,847.7 1,867.1 Total liabilities and shareholders' equity $6,271.3 $5,937.6 ITT INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Three Months Ended March 31, 2004 2003 Operating Activities Net income $88.9 $86.7 Income from discontinued operations (0.8) - Income from continuing operations 88.1 86.7 Adjustments to income from continuing operations: Depreciation and amortization 48.9 45.8 Restructuring and asset impairment charges 4.7 10.4 Payments for restructuring (9.5) (5.1) Change in receivables (158.3) (99.7) Change in inventories 2.6 (9.1) Change in accounts payable and accrued expenses (4.2) (48.2) Change in accrued and deferred taxes 21.6 17.9 Change in other current and non- current assets (115.4) (209.5) Change in other non-current liabilities 0.4 (14.0) Other, net 5.6 9.1 Net Cash - operating activities (115.5) (215.7) Investing Activities Additions to plant, property and equipment (29.0) (21.8) Acquisitions, net of cash acquired (243.0) (35.1) Proceeds from sale of assets and businesses 2.6 7.8 Other, net 0.3 - Net Cash - investing activities (269.1) (49.1) Financing Activities Short-term debt, net 251.2 246.5 Long-term debt repaid (35.5) (0.6) Long-term debt issued - 0.2 Repurchase of common stock (39.6) (2.0) Proceeds from issuance of common stock 17.3 2.5 Dividends paid (14.8) (13.8) Other, net - 0.1 Net Cash - financing activities 178.6 232.9 Exchange Rate Effects on Cash and Cash Equivalents (8.9) 2.4 Net Cash - Discontinued Operations (0.2) 0.9 Net change in cash and cash equivalents (215.1) (28.6) Cash and cash equivalents - beginning of year 414.2 202.2 Cash and Cash Equivalents - End of Year $199.1 $173.6 ITT Industries Non-GAAP Press Release Reconciliation Reported vs. Adjusted Net Income & EPS First Quarter of 2004 & 2003 ($ Millions, except EPS and shares) Change 2004 Q1 Q1 Q1 Q1 Q1 Q1 vs. 2004 2004 2004 2003 2003 2003 2003 As As As As As Reported Adjust- Adjust- Report- Adjust- Adjust- Adjust- ments ed ed ments ed ed Segment Operating Income 146.6 4.5 #A 151.1 128.9 9.3 #H 138.2 Interest Income (Expense) (1.1) (4.2)#B (5.3) 15.1 (22.1)#I (7.0) Other Income (Expense) (3.6) 1.3 #C (2.3) (0.7) - (0.7) Corporate (Expense) (17.6) 0.2 #D (17.4) (19.2) 1.1 #J (18.1) Income from Continuing Operations before Tax 124.3 1.8 126.1 124.1 (11.7) 112.4 Income Tax Items (2.3)#E (2.3) (1.0)#K (1.0) Income Tax Expense (36.2) (0.6)#F (36.8) (37.4) 3.6 #L (33.8) Total Tax Expense (36.2) (2.9) (39.1) (37.4) 2.6 (34.8) Income from Continuing Operations 88.1 (1.1) 87.0 86.7 (9.1) 77.6 Income from Discontinued Operations 0.8 (0.8)#G 0.0 0.0 0.0 0.0 Net Income 88.9 (1.9) 87.0 86.7 (9.1) 77.6 9.4 Diluted EPS 0.94 (0.02) 0.92 0.92 (0.09) 0.83 $0.09 #A - Remove Segment Restructuring Expense of $4.5M #B - Remove Interest Income - Tax Settlement ($4.2M) #C - Remove Bond Discount Loss on Redemption of Bonds $1.3M #D - Remove HQ Restructuring Expense of $0.2M #E - Remove Effect of Several Tax Items ($2.3M) #F - Tax Effect of Adjustments #A, #B, #C and #D #G - Remove D.O. Income ($0.8M) #H - Remove Segment Restructuring Expense of $9.3M #I - Remove Interest Income From Tax Audit Settlement ($22.1M) #J - Remove HQ Restructuring Expense of $1.1M #K - Remove Tax Audit Settlement $1.0M #L - Tax Effect of Adjustments #H and #J ITT Industries Non-GAAP Press Release Reconciliation Reported vs. Organic Revenue Growth First Quarter 2004 & 2003 ($ Millions) (As Reported - GAAP) % Sales & Sales & Change Change Revenues Revenues 2004 2004 vs. vs. 3M 2004 3M 2003 2003 2003 ITT Industries - Consolidated 1,515.9 1,296.4 219.5 17% Electronic Components 161.8 144.8 17.0 12% Industrial Products Group 90.2 79.4 10.8 14% (As Adjusted - Organic) Acquisi- tion FX Adj. Change %Change Sales & Contrib- Contrib Sales & Sales & Adj. Adj. Revenues ution ution Revenues Revenues 04 04 3M 2004 3M 2004 3M 2004 3M 2004 3M 2003 vs. 03 vs. 03 ITT Industries - Consolidated 1,515.9 (24.5) (62.9) 1,428.5 1,296.4 132.1 10% Electronic Components 161.8 0.0 (10.1) 151.7 144.8 6.9 5% Industrial Products Group 90.2 0.0 (0.5) 89.7 79.4 10.3 13% ITT Industries Non-GAAP Press Release Reconciliation Reported vs. Adjusted Net Income & EPS Full Year of 2004 & 2003 Full Year 2004 EPS** Full Year Lower Limit Upper Limit 2003 EPS** As Reported* 4.42 4.52 4.29 Adjustments Restructuring 0.03 0.03 0.22 Interest (0.03) (0.03) (0.16) Tax Settlement (0.02) (0.02) (0.35) Other - Debt Repayment 0.01 0.01 Discontinued Operations (0.01) (0.01) (0.14) Adjusted Net Income 4.40 4.50 3.86 % Increase 14% 17% *Amount represents projected figures for full year 2004 ** Represents diluted EPS ITT Industries Non-GAAP Press Release Reconciliation Cash From Operating Activities vs. Free Cash Flow First Quarter 2004 & 2003 ($ Millions) 3M 04 3M 03 Income from Continuing Ops 88.1 86.7 Depreciation 44.0 40.9 Amortization 4.9 4.9 Working Capital (119.4) (84.6) Pension Pre-funding (100.0) (200.0) Other (33.1) (63.6) Cash from Operations (115.5) (215.7) Capital Expenditures (29.0) (21.8) Pension Pre-funding 100.0 200.0 Free Cash Flow (44.5) (37.5) FY Free Cash Flow Range FY 04 FY 04 Cash from Operations 485.0 535.0 Capital Expenditures (160.0) (160.0) Pension Pre-funding 100.0 100.0 Free Cash Flow 425.0 475.0 ITT Industries Non-GAAP Press Release Reconciliation First Quarter 2004 & 2003 Reported vs. Adjusted EPS Q1 2004 Q1 2003 Actual Actual Diluted Earnings Per Share - GAAP $0.94 $0.92 Other Adjustments* (0.05) (0.17) Restructuring 0.03 0.08 Adjusted Earnings Per Share - NON- GAAP $0.92 $0.83 *Please refer to "Reported vs. Adjusted Net Income & EPS First Quarter of 2004 & 2003" for details on Other Adjustments ITT Industries Non-GAAP Press Release Reconciliation Segment Operating Income & OI Margin Adjusted for Restructuring First Quarter of 2004 & 2003 ($ Millions) Q1 2004 Q1 2003 % Q1 2004 Adjust for As As Change As 2004 Reported Reported 04 vs. Reported Restruc- 03 turing Sales and Revenues: Electronic Components 161.8 144.8 161.8 Defense Electronics & Services 506.5 391.4 506.5 Fluid Technology 574.9 503.6 574.9 Operating Margin: Electronic Components 3.6% 0.1% 3.6% Defense Electronics & Services 9.6% 8.8% 9.6% Fluid Technology 9.2% 11.2% 9.2% Income: Electronic Components 5.9 0.2 2850.0% 5.9 1.3 Defense Electronics & Services 48.7 34.4 41.6% 48.7 0.0 Fluid Technology 52.9 56.3 -6.0% 52.9 3.0 ($ Millions) Q1 2004 Q1 2003 Adjust for Q1 2003 % As As 2003 As Change Adjusted Reported Restruc- Adjusted Adj. 04 turing vs. 03 Sales and Revenues: Electronic Components 161.8 144.8 144.8 Defense Electronics & Services 506.5 391.4 391.4 Fluid Technology 574.9 503.6 503.6 Operating Margin: Electronic Components 4.4% 0.1% 6.2% Defense Electronics & Services 9.6% 8.8% 8.8% Fluid Technology 9.7% 11.2% 11.2% Income: Electronic Components 7.2 0.2 8.8 9.0 -20.0% Defense Electronics & Services 48.7 34.4 0.0 34.4 41.6% Fluid Technology 55.9 56.3 0.0 56.3 -0.7% ITT Industries Non-GAAP Press Release Reconciliation Segment Operating Income & OI Margin Adjusted for Restructuring First Quarter of 2004 & Fourth Quarter of 2003 ($ Millions) Q1 2004 Q4 2003 % Q1 2004 Adjust for As As Change As 2004 Reported Reported 04 vs. Reported Restruc- 03 turing Electronic Components Sales and Revenues 161.8 158.0 161.8 Operating Margin 3.6% 4.1% 3.6% Income 5.9 6.4 -7.8% 5.9 1.3 ($ Millions) Adjust for Q1 2004 Q4 2003 2003 Q4 2003 % As As As Change Adjusted Reported Restruc- Adjusted Adj. 04 turing vs. 03 Electronic Components Sales and Revenues 161.8 158.0 158.0 Operating Margin 4.4% 4.1% 3.0% Income 7.2 6.4 (1.7) 4.7 53.2% SOURCE ITT Industries, Inc. -0- 04/22/2004 /CONTACT: Tom Glover, ITT Industries, Inc., +1-914-641-2160, tom.glover@itt.com/ /Web site: http://www.itt.com / (ITT) CO: ITT Industries, Inc. 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