ITT Corporation Announces Plan to Separate into Three Independent Publicly Traded Companies
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o Water-related businesses to be spun off as a standalone water technology company
o Defense segment to be spun off as a standalone, diversified defense technology and
information solutions company
o ITT Corporation to continue as a standalone, highly engineered industrial company
WHITE PLAINS, N.Y., January 12, 2011 - ITT Corporation (NYSE: ITT) today announced that
its board of directors has unanimously approved a plan to separate the company's businesses into
three distinct, publicly traded companies. Under the plan, ITT would execute tax-free spinoffs to
shareholders of its water-related businesses and its Defense & Information Solutions segment.
Following completion of the transaction, ITT will continue to trade on the New York Stock
Exchange as an industrial company that supplies highly engineered solutions in the aerospace,
transportation, energy and industrial markets. Under the plan, ITT shareholders will own shares in
all three corporations following the completion of the transaction.
ITT senior management and its board of directors believe that these three businesses are wellpositioned
to create significant value for shareholders as standalone companies. ITT expects to
finalize and execute the plan before the end of the year.
"For nearly a century, ITT has been known for transformative strategies that create value for
customers and shareowners," said Steve Loranger, chairman, president and chief executive officer
of ITT. "In recent years, we have nurtured and grown our unique portfolio of businesses, which
are now poised to emerge as three strong and focused standalone companies, with leading
products and market positions, highly skilled employees and tremendous value-generating
potential for shareowners. In today's business environment, we believe this strategy is the best
approach to unlock this value and position the three businesses to grow and serve customers as
focused global companies. Each new company will be more nimble and able to build stronger,
more intimate customer relationships to accelerate mutual success."
Loranger continued, "We believe each of these future companies will be strategically well
positioned for growth, nicely capitalized, with global capabilities, outstanding operating track
records and world-class leadership. In addition, we believe the transformation plan will provide
more focused opportunities for our employees, who will be instrumental in the future success of all
three companies."
Three Focused Businesses with Outstanding Growth Potential
A leading manufacturer of highly engineered industrial products and high-tech solutions:
Following completion of the spinoff, ITT Corporation will continue to be a diversified
global manufacturer of highly engineered industrial products and high-tech solutions. Its
global platform will include ITT's current Industrial Process business, as well as its Motion
Technologies, Interconnect Solutions and Control Technologies businesses. ITT
Corporation will have leading market positions across an extensive portfolio of advanced
technology industrial pumps, valves and control systems serving the oil and gas, mining,
chemical, power generation, and pulp and paper markets. It will also have leadership
positions in highly engineered products such as specialized and harsh-environment
connectors, aerospace valves, actuators and components, as well as shock absorbers, brake
pads and other energy absorption solutions. It is expected to have a revenue profile that is
globally balanced. Its emerging-market growth prospects are outstanding, with nearly 60
percent of revenues coming from international operations and emerging markets.
Pro forma 2011 revenue for the future ITT Corporation is estimated at $2.1 billion.
A global water technology leader:
Following completion of the spinoff, a highly attractive, standalone water technology
corporation with a new corporate brand name will be formed through the combination of
three of ITT's current businesses: Residential & Commercial Water, Flow Control and
Water & Wastewater (including biological, filtration and disinfection treatment and
analytics). These businesses are already known for solid operating results, leading market
positions and strong product brand awareness, positioning the new water technology
company for significant growth. This company will be a global leader, with the broadest
suite of innovative equipment, systems and applications. The portfolio will span the
transport, testing and treatment of water -- focusing on the residential, commercial,
municipal, agricultural, construction, building services, dewatering, beverage and leisure
marine markets, as well as analytical instrumentation for water and wastewater,
environmental, medical and beverage applications. The company is expected to benefit
from an already strong installed base, driving attractive aftermarket opportunities, as well
as a diverse global footprint with approximately 55 percent of revenues coming from
international markets and strong emerging market growth prospects.
Pro forma 2011 revenue for the future water technology business is estimated at $3.6
billion.
A highly engineered defense technology and information solutions provider:
Following completion of the spinoff, the existing Defense & Information Solutions
segment will be renamed and rebranded as a new standalone company that is an industryleading
provider of innovative technologies and operational services to meet the enduring
requirements of the global military, government and commercial customers. The
company's products and services will include premier technologies such as next generation
night vision, integrated electronic warfare, networked communications, force protection,
radar, global intelligence, surveillance and reconnaissance systems, composite structures,
space-based satellite imaging, weather and climate monitoring, and navigation and imaging
systems, as well as maintenance, engineering and professional services. The business will
continue to focus on growth beyond the core Department of Defense customer, with nearly
30 percent of revenues already coming from adjacent markets, such as air traffic
management, information and cyber security as well as strong international growth
prospects.
Pro forma 2011 revenue for the new defense and information solutions business is
estimated at $5.8 billion.
Each of the future companies is expected to have a capital structure, balance sheet and financial
policies consistent with investment grade credit metrics. As it prepares for the transaction, ITT
will continue to follow financial policies that are consistent with its current investment grade credit
ratings.
Experienced Team Poised to Lead Extraordinary Corporations
Effective upon the completion of the transaction, the new ITT Corporation will be led by ITT's
current Chief Financial Officer, Denise Ramos, who will serve as its future chief executive officer.
Its chairman of the board will be Frank MacInnis, currently a director of ITT Corporation and the
chairman and former chief executive officer of EMCOR Group, Inc. The water technology
businesses will become a new company to be led by Gretchen McClain, currently president of ITT
Fluid and Motion Control, who will serve as its future chief executive officer. Its executive
chairman of the board will be Steve Loranger, currently chairman, president and chief executive
officer of ITT Corporation. The Defense & Information Solutions business will become a new
company to be led by David Melcher, currently president of ITT Defense & Information
Solutions, serving as its future chief executive officer. Its chairman of the board will be Ralph
Hake, currently a director of ITT Corporation and previously the chairman and chief executive
officer of Maytag Corporation.
"I'm confident that Denise, Gretchen and Dave have the best experience to lead these new
companies as CEOs and will create exciting opportunities for their shareholders, employees and
customers. While we move forward with the development of the transformation plan, these three
world-class leaders will continue to partner with me and the rest of our leadership team in
continuing to deliver strong performance as one portfolio until the transaction is completed,"
Loranger said. "As the future executive chairman of the new water technology company, I look
forward to partnering with Gretchen and playing a vibrant and important role in its growth well
into the future."
Each corporation will have its own independent board of directors, and each of ITT's current
board members has committed to serve on one or more of the boards of these companies. Upon
completion of the transaction, each company is expected to be listed on the New York Stock
Exchange.
ITT's current board of directors is unanimously confident that Frank MacInnis, Steve Loranger
and Ralph Hake will bring valuable experience leading public companies and expertise in
corporate governance as chairmen of these new boards.
Investors:
Thomas Scalera
+1 914-641-2030
thomas.scalera@itt.com
Media:
Jenny Schiavone
+1 914-641-2160
jennifer.schiavone@itt.com
