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ITT Corporation (ITT)

Q4 2009 Earnings Call

February 3, 2010; 09:00 am ET


Steve Loranger - Chairman & Chief Executive Officer

Denise Ramos - Chief Financial Officer

Tom Scalera - Director of Investor Relations


John Inch - Merrill Lynch

Shannon O’Callaghan - Barclays

Jim Lucas - Janney Montgomery Scott

Jeff Sprague - Citigroup

Deane Dray - FBR Capital Markets

Terry Darling - Goldman Sachs

Nigel Coe - Deutsche Bank

Mike Schneider - Baird



Welcome to ITT Corporation’s fourth quarter 2009 investor review and earnings conference call. Today’s call is being recorded and will be available for replay beginning at 1:00 pm Eastern Standard Time. The dial-in number is 800-642-1687, and enter pin number 50323875. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. (Operator Instructions)

It is now my pleasure to turn the floor over to Tom Scalera, Director of ITT Investor Relations. Tom, you may begin.

Tom Scalera

Thank you, [Russ]. Good morning and welcome to ITT’s fourth quarter 2009 investor review. Presenting this morning are Chairman and CEO, Steve Loranger; and Chief Financial Officer, Denise Ramos. I’d like to highlight that this morning’s presentation, press release, and reconciliation of GAAP and non-GAAP financial measures can be found on our website at

As always please note that any remarks we may make about future expectations, plans and prospects, as well as other circumstances set out in our Safe Harbor Statement constitute forward-looking statements for purposes of the Safe Harbor Provision. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our fourth quarter of 2009 earnings press release and our filings with the SEC.

Now let me turn things over to Steve to begin the call.

Steve Loranger

Good morning and thank you all for joining us today. 2009 was a year of triumph for ITT. Into that extend for the hundreds of ITT employees, who regularly join us for this call, I want to personally thank all of you and your teams for an exceptional performance and contribution in 2009.

This was a year that our leadership and our 40,000 team members were challenged with volatile uncertainty, a year where swift decision were required in the absence of clarity, and a year where our customers were equally challenged and we’re not able to predict even what their needs were.

Given this situation, ITT employee chose to win, to steadfastly advance our strategy, to continue to advance in our customers’ vital growth area, and to invest in our own contribution to make the world better in safety, security, vitality, and in corporate citizenship. This unwavering commitment to our future was not without a price. It was a price we willingly paid to enable ITT to now take advantage of our current opportunities.

Winning in this new economy meant that we had not only be steady in our strategic investments, but to ensure that our future viability was sound with exceptional execution in overdriving cost reductions essentially establishing new breakeven point for the company and by preserving a liquidity and protecting our balance sheet.

This wasn’t easy, 2009 was strategic for many of us, but we’re now very energized, because we did it all exceeding our own expectations. What was most remarkable to me was that after all of our employees’ hard work, we achieved our highest level of employee engagement scores ever with marked increases in the midst of our most challenging test.

Not only did we finish with best in class business results, ITT was broadly recognized externally for our corporate responsibility and in the accolades. We were ranked No. 30 among the world’s best companies by Newsweek’s Green Ranking. We remained in the top 100 best corporate citizen by Corporate Responsibility magazine. We were listed among the top 50 for employee diversity with engineering and IT professionals.

We remained the top 10 military employer and again on the Dow Jones Sustainability Index, honored by the National Committee of U.S./China Relations for our sustainability work in China and a final for the U.S. Chamber of Commerce Corporate Stewardship Awards.

So, while this was our second best year ever in terms of business results, I believe it was our finest performance as a team. So I think it’s worth capturing and recognizing some of our employees’ terrific efforts in 2009, all of which has built on our strategic foundation and our speedy core as a company.

In 2009, we focused on managing our supply chain, ensuring our cost inputs were synchronized with reductions in volume and we drove cycle time reductions to ensure that volatile changes in the flow of goods were matched with the appropriate levels of working capital.

We performed extremely well operations. On top of that, we increased customer satisfaction, employee engagement as I mentioned and we accelerated our long term strategy. On customers, we aligned with customers need invested in new technologies and we consolidated Motion & Flow Control volume centers around some customer solutions.

The proof of these advances was evident in our impressive list of significant contract wins in 2009. These included CREW 3.3 Jamming program, the Japanese weather satellite, and Indian Irrigation project, as well as a very large Brazilian Oil & Gas project. A new program on one of the world’s largest desalination plants in south. Ford Taurus, Escape & Focus components in global India and China.

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