ITT Reports Strong 2012 Results, Solid 2013 Guidance

  ITT Reports Strong 2012 Results, Solid 2013 Guidance

2012 Full-Year Highlights from Continuing Operations

  *Revenue up 7 percent to $2.2 billion with organic revenue up 8 percent
  *GAAP earnings totaled $1.16 per share
  *Adjusted earnings of $1.68 per share reflect strong operational
    performance; results include $0.02 negative impact from Bornemann
    acquisition
  *Cash from operating activities totaled $247 million; adjusted free cash
    flow conversion was 172 percent

2013 Outlook

  *10 percent total revenue growth
  *10 percent growth in adjusted earnings per share at the mid-point of 2013
    guidance
  *10 percent dividend increase to $0.10 per share
  *Up to $75 million of additional share repurchases

Business Wire

WHITE PLAINS, N.Y. -- February 27, 2013

ITT Corporation (NYSE: ITT) today reported its 2012 full-year and
fourth-quarter financial performance, including solid gains in revenue and
adjusted earnings per share from continuing operations.

The company had 2012 annual revenue of $2.2 billion, reflecting 7 percent
overall growth and 8 percent organic growth (defined as total revenue
excluding foreign exchange, acquisition and divestiture impacts) compared with
the prior year. Revenue results included 13 percent growth in North America
and 12 percent growth in emerging markets. In 2012, solid gains and strength
in core markets including oil and gas, chemical, mining and automotive offset
weakness in the connectors market.

On a GAAP basis, 2012 earnings from continuing operations totaled $1.16 per
share, compared with a loss of $6.22 per share in the prior year that was
driven by impacts associated with the spin-offs of ITT’s former defense and
water businesses. Adjusted earnings from continuing operations, which excludes
special items, increased to $1.68 per share. Before the impact of the
Bornemann acquisition, adjusted earnings would have been $1.70 per share,
reflecting the company’s strong operational performance, which offset
incremental post-spin recurring costs and unfavorable foreign exchange.
Special items primarily included costs related to the company’s separation
plan, restructuring initiatives and Bornemann Pumps items, as well as
asbestos-related costs and tax items.

In the fourth quarter, revenue was up 9 percent to $554 million with organic
revenue up 7 percent compared to the prior year. GAAP earnings from continuing
operations totaled $0.24 per share. Adjusted earnings for the quarter were up
to $0.37 per share, reflecting impacts from strategic portfolio actions and a
higher-than-anticipated 35 percent effective tax rate. Before the impact of
Bornemann, adjusted earnings would have been $0.39 per share.

“Over the past year as a truly global diversified industrial company, ITT
delivered on our commitments and leveraged our sharper focus to propel the
swift and consistent execution of our strategies to drive profitable growth
and value creation. Our outstanding team achieved a number of successes
including delivering double-digit growth in North America and emerging
markets, completing the acquisition of Bornemann Pumps and continuing to
strengthen our relationships with customers to grow our market share in
several key end markets,” said Denise Ramos, chief executive officer and
president.

“As we look forward to 2013, we’ll continue to build on the strong foundation
we developed in 2012 and continue to make progress against our key growth
drivers. While we expect the global economic environment to remain uncertain,
we will leverage the advantages we gain from our balanced and diversified
portfolio and continue our focus on consistent execution and disciplined
capital deployment to drive value creation for customers, employees and
shareowners.”

ITT also announced that in 2013 it will continue to return capital to
shareowners by executing up to $75 million of additional share repurchases and
increasing its dividend by 10 percent to 10 cents per share. The ITT Board of
Directors has approved the cash dividend for the first quarter of 2013, which
will be payable on April 1, 2013, to shareowners of record on March 15, 2013.

2012 Full-Year and Fourth-Quarter Business Segment Results

All full-year and quarterly results are compared with the respective
prior-year period

Industrial Process designs and manufactures industrial pumps and valves for
the oil and gas, chemical, mining and industrial markets.

  *Full-year total revenue was up 25 percent to $956 million and organic
    revenue was up 20 percent driven by volume growth across all geographic
    regions and end-markets, with significant strength coming from North
    America oil and gas and general industry, global chemical and mining, and
    the successful integration of Blakers Pump Engineers.
  *Fourth-quarter 2012 total revenue increased 22 percent to $257 million and
    organic revenue was up 15 percent as a result of growth in North America
    in all markets and significant growth in global oil and gas and chemical
    markets.
  *For the full year, adjusted segment operating income was up 15 percent to
    $109 million driven by increased sales volume and net operating
    productivity, offset by incremental post-spin recurring costs. For the
    fourth quarter, adjusted operating income for the segment was up 15
    percent to $25 million, as net operating productivity more than offset a
    higher large-project mix and the operational impact of the Bornemann Pumps
    acquisition.

Motion Technologies designs and manufactures braking technologies and shock
absorbers for the automotive and rail markets.

  *Full-year total revenue for Motion Technologies was down 1 percent to $626
    million due to unfavorable foreign currency translation. However, organic
    revenue was up 6 percent led by market share gains in China and the United
    States, as well as modest growth in Europe despite difficult European
    automotive industry conditions.
  *2012 fourth-quarter total revenue increased 3 percent to $140 million
    while organic revenue increased 7 percent due to market share gains in
    global automotive and market growth in the United States and China.
  *For 2012, adjusted segment operating income was $85 million, down 1
    percent from the previous year. Results reflected net operating
    productivity and volume increases offset by unfavorable foreign currency
    impacts of $9 million and expenses incurred in the start-up of a new
    production and research facility in Wuxi, China. Fourth-quarter adjusted
    operating income was $17 million, a 6 percent decrease as improved volumes
    and productivity were offset by reduced aftermarket, unfavorable foreign
    currency impacts of $2 million and expenses incurred in the start-up of a
    new production and research facility in Wuxi, China.

Interconnect Solutions designs and manufactures connectors and interconnects
for the aerospace, industrial and transportation markets.

  *Full-year 2012 total revenues declined 10 percent to $376 million while
    organic revenues decreased 8 percent due to declining share in the
    communication and transportation markets combined with overall connector
    industry weakness in 2012.
  *Fourth-quarter 2012 total revenue for Interconnect Solutions declined 8
    percent to $92 million with organic revenue declining 7 percent. In the
    quarter, increases in general industrial connectors and oil and gas
    connectors were more than offset by overall connector market decreases as
    well as declines in communication, aerospace and defense connectors.
  *Full-year adjusted operating income was $15 million, down 63 percent
    compared with 2011 as benefits from current year restructuring actions
    were more than offset by lower volumes, unfavorable impacts from sales mix
    and a prior-year gain on the sale of a product line. Adjusted operating
    income for the fourth quarter was $6 million, a 21 percent decline, as
    favorable impacts from restructuring actions taken in 2012 were offset by
    lower volumes and an unfavorable sales mix.

Control Technologies designs and manufactures products including fuel
management, actuation, and noise and energy absorption components for the
aerospace and industrial markets.

  *Full-year total and organic revenue for Control Technologies was down 3
    percent to $277 million. However, excluding the impact of a large
    prior-year rail project, revenue was up 3 percent as strength in aerospace
    offset weakness in the defense market.
  *Fourth-quarter 2012 total and organic revenue were flat at $68 million, as
    increases in commercial aerospace were offset by declines in defense, the
    impact of the prior-year rail project and general weakness in the European
    industrial market.
  *Full-year adjusted segment operating income was up 2 percent to $59
    million due primarily to productivity and pricing initiatives offset by
    unfavorable changes in sales mix. Fourth-quarter adjusted operating income
    was up 30 percent to $16 million as the result of solid pricing and net
    operating productivity.
  *In the fourth quarter of 2012, ITT successfully divested its shape-cutting
    product lines and recognized a $9 million gain. This divestiture is
    reported in discontinued operations for all reporting periods.

2013 Preliminary Guidance

The company announced 2013 guidance including a 10 percent mid-point increase
in adjusted earnings per share from continuing operations, with a range of
$1.80 to $1.90 per share. This range reflects a $0.02 negative impact from the
recent currency devaluation in Venezuela.

Total revenue is expected to grow 9 to 11 percent driven by growth in the oil
and gas, chemical and industrial markets, share gains in the global automotive
market, the impact of the Bornemann Pumps acquisition and emerging market
growth, partially offset by weakness in the mining and defense end markets.
The company expects emerging market growth will be approximately 15 percent.

ITT also expects solid adjusted segment operating margin growth of 50 basis
points due to benefits from restructuring and productivity actions that will
more than offset acquisition impacts.

The company expects to increase adjusted EPS from continuing operations by
improving productivity and integrating the Bornemann Pumps acquisition, while
funding key investments to enhance global capabilities for the oil and gas
market and driving Lean transformation activities across its facilities.

Investor Call Today

ITT's senior management will host a conference call for investors today at 9
a.m. EST 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.

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. Founded in 1920, 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 2012 revenues of
$2.2 billion. For more information, visit www.itt.com.

Safe Harbor Statement

Certain material presented herein includes 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
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. Whenever used, words such as "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "target" and other terms of similar
meaning are intended 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.
Factors that could cause results to differ materially from those anticipated
include, but are not limited to: Uncertainties with respect to our estimation
of asbestos liability exposures, third-party recoveries and net cash flow;
economic, political and social conditions in the countries in which we conduct
our businesses; changes in U.S. or International sales and operations;
contingencies related to actual or alleged environmental contamination, claims
and concerns; decline in consumer spending; sales and revenues mix and pricing
levels; availability of adequate labor, commodities, supplies and raw
materials; interest and foreign currency exchange rate fluctuations and
changes in local government regulations; competition, industry capacity and
production rates; ability of third parties, including our commercial partners,
counterparties, financial institutions and insurers, to comply with their
commitments to us; our ability to borrow and availability of liquidity
sufficient to meet our needs; changes in the value of goodwill or intangible
assets; our ability to achieve stated synergies or cost savings from
acquisitions or divestitures; the number of personal injury claims filed
against the companies or the degree of liability; our ability to effect
restructuring and cost reduction programs and realize savings from such
actions; changes in our effective tax rate as a result in changes in the
geographic earnings mix, tax examinations or disputes, tax authority rulings
or changes in applicable tax laws; government regulations and compliance
therewith, including Dodd-Frank legislation involving such issues as conflict
minerals; changes in technology; intellectual property matters; governmental
investigations; potential future employee benefit plan contributions and other
employment and pension matters; susceptibility to market fluctuations and
costs as a result of becoming a smaller, more focused company after the
spin-off; changes in generally accepted accounting principles; and other
factors set forth in our Annual Report on Form 10−K for the fiscal year ended
December 31, 2011 and our other filings with the Securities and Exchange
Commission.

The Company undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.


ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENTS
(In millions, except per share)
(Unaudited)
                                                            
                            Three Months Ended         Twelve Months Ended
                            December 31,               December 31,
                            2012        2011           2012        2011
                                                                   
Revenue                     $ 554.3     $ 509.9        $ 2,227.8   $ 2,085.6
                                                                   
Costs of revenue              380.9       357.1          1,547.6     1,440.6
Selling, general and          112.6       85.7           388.1       325.2
administrative expenses
Research and                  14.9        15.6           62.7        63.5
development expenses
Asbestos-related costs,       15.8        9.6            50.9        100.4
net
Transformation costs          1.1         311.9          13.0        396.1
Restructuring and asset      7.9       3.2          14.0       4.7     
impairment charges, net
Total costs and               533.2       783.1          2,076.3     2,330.5
expenses
                                                                   
Operating income (loss)       21.1        (273.2 )       151.5       (244.9  )
Interest and
non-operating (income)       2.4       4.9          2.4        71.0    
expenses, net
Income (loss) from
continuing operations
before
Income tax (benefit)          18.7        (278.1 )       149.1       (315.9  )
expense
Income tax (benefit)         (3.4  )    268.5        39.6       260.6   
expense
Income (loss) from            22.1        (546.6 )       109.5       (576.5  )
continuing operations
Income from
discontinued                 10.3      17.6         15.9       447.0   
operations, net of tax
Net Income (loss)           $ 32.4     $ (529.0 )     $ 125.4     $ (129.5  )
                                                                   
Earnings (Loss) Per
Share
Basic EPS
Continuing operations       $ 0.24      $ (5.87  )     $ 1.18      $ (6.22   )
Discontinuing                0.11      0.19         0.17       4.82    
operations
Net income (loss)           $ 0.35      $ (5.68  )     $ 1.35      $ (1.40   )
                                                                   
Diluted EPS
Continuing operations       $ 0.24      $ (5.87  )     $ 1.16      $ (6.22   )
Discontinuing                0.11      0.19         0.17       4.82    
operations
Net income (loss)           $ 0.35      $ (5.68  )     $ 1.33      $ (1.40   )
                                                                   
Average common shares -       92.3        93.1           93.0        92.8
basic
Average common shares -       93.5        93.1           94.1        92.8
diluted
                                                                   


ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
(Unaudited)
                                                           
                                                 For Year Ended
                                                 December 31,
                                                 2012            2011
Assets
Current Assets:
Cash and cash equivalents                        $   544.5     $   689.8
Receivables, net                                       440.3           390.5
Inventories, net                                       304.2           248.1
Other current assets                                251.4        433.3
Total current assets                                   1,540.4         1,761.7
                                                                 
Plant, property and equipment, net                     373.1           321.4
Goodwill                                               651.4           497.5
Other intangible assets, net                           123.3           76.6
Asbestos-related assets                                525.3           821.3
Other non-current assets                            172.6        193.0
Total assets                                        3,386.1      3,671.5
                                                                 
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable                                       347.0           361.1
Accrued liabilities                                 458.3        472.9
Total current liabilities                              805.3           834.0
                                                                 
Asbestos-related liabilities                           1,255.0         1,529.1
Postretirement benefits                                330.3           315.4
Other non-current liabilities                       292.3        298.2
Total liabilities                                      2,682.9         2,976.7
                                                                 
Shareholders' equity                                703.2        694.8
Total liabilities and shareholders'              $   3,386.1   $   3,671.5
equity
                                                                 


ITT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                                                              
                                                     Twelve Months Ended
                                                     December 31,
                                                     2012         2011
                                                                  
Operating Activities
Net income                                           $ 125.4      $ (129.5   )
Less: (Loss) income from discontinued operations      15.9       447.0    
Income (loss) from continuing operations               109.5        (576.5   )
                                                                  
Adjustments to income (loss) from continuing
operations:
Depreciation and amortization                          71.1         71.3
Stock-based compensation                               12.4         11.5
Asbestos-related costs, net                            50.9         100.4
Transformation costs                                   13.0         396.1
Deferred income taxes                                  34.1         302.4
Asbestos-related payments, net                         (20.1  )     (22.0    )
Transformation-related payments                        (47.3  )     (355.0   )
Contributions to postretirement plans                  (71.0  )     (30.8    )
Change in receivables                                  (17.7  )     (71.0    )
Change in inventories                                  (8.7   )     (37.0    )
Change in accounts payable                             (4.3   )     3.3
Change in accrued expenses                             (10.1  )     34.8
Change in accrued income taxes                         84.1         (97.5    )
Other, net                                            51.2       (52.4    )
Net Cash - Operating Activities                       247.1      (322.4   )
                                                                  
Investing Activities
Capital expenditures                                   (83.8  )     (102.3   )
Acquisitions, net of cash acquired                     (193.2 )     (15.6    )
Proceeds from sale of discontinued operations          39.5         10.4
and other assets
Purchases of investments                               (38.2  )     -
Other, net                                            1.0        1.0      
Net Cash — Investing Activities                       (274.7 )    (106.5   )
                                                                  
Financing Activities
Short-term debt, net                                   (24.8  )     3.5
Long-term debt, net                                    0.3          (1,318.7 )
Proceeds from issuance of common stock                 58.0         60.0
Repurchase of common stock                             (116.8 )     (6.6     )
Tax benefit from share-based compensation              6.4          7.2
Dividends paid                                         (34.2  )     (193.0   )
Contributions from Exelis and Xylem, net               -            1,671.0
Distributions of Exelis and Xylem, net                 -            699.9
Other, net                                            3.1        (1.0     )
Net Cash — Financing Activities                       (108.0 )    922.3    
                                                                  
Exchange rate effects on cash and cash                (4.0   )    (9.4     )
equivalents
                                                                  
Cash from (used for) discontinued operations:
Operating Activities                                   (3.2   )     561.2
Investing Activities                                   (0.1   )     (467.3   )
Financing Activities                                   (2.4   )     (527.1   )
Exchange rate effects on cash and cash                -          6.7      
equivalents
Net Cash – Discontinued Operations                    (5.7   )    (426.5   )
                                                                  
Net change in cash and cash equivalents                (145.3 )     57.5
Cash and cash equivalents — beginning of year         689.8      1,032.3  
Cash and cash equivalents — end of period              544.5        1,089.8
Less: Cash and Cash Equivalents distributed to        -          (400.0   )
Exelis and Xylem
Cash and Cash Equivalents of Continuing              $ 544.5     $ 689.8    
Operations - End of Period
                                                                  

               Key Performance Indicators and Non-GAAPMeasures

Management reviews key performance indicators including revenue, segment
operating income and margins, earnings per share, orders growth, and backlog,
among others. 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, dividends,
acquisitions and share repurchases. These metrics, however, are not measures
of financial performance under 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
this Reg. G reconciliation.

Organic Revenues and Organic Orders are defined as revenues and orders,
excluding the impact of foreign currency fluctuations and contributions from
acquisitions and divestitures made during the current year. Divestitures
include sales of insignificant 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 assumes no change in
exchange rates from the prior period.

Adjusted Segment Operating Income is defined as operating income, adjusted to
exclude costs incurred in connection with the acquisition of Bornemann Pumps,
the Transformation, restructuring charges and spin-related repositioning
charges; and Adjusted Segment Operating Margin is defined as adjusted segment
operating income divided by total revenue. Spin-related repositioning charges
are expenses to reposition the post-transformation organization to its full
operating structure primarily consisting of transition services agreement exit
costs, advisory fees and other redesign actions related to the new company
structure.

Adjusted Pro Forma Income from Continuing Operations and Adjusted Pro Forma
EPS from Continuing Operations are defined as income from continuing
operations and income from continuing operations per diluted share, adjusted
to exclude special items and include pro forma adjustments. Special items may
include, but are not limited to, asbestos-related costs, transformation costs,
repositioning costs, restructuring costs and asset impairment charges, income
tax settlements or adjustments, and other unusual and infrequent non-operating
items. Special items represent significant charges or credits that impact
current results, but may not be related to the Company’s ongoing operations
and performance. Pro Forma adjustments in 2011 reflect the elimination of
interest expense as if repayment of $1,250M of long term debt occurred January
1, 2011 and elimination of interest income as if $400M of aggregate cash was
distributed to the spun-off companies on January 1, 2011.

Adjusted Free Cash Flow is defined as net cash provided by operating
activities less capital expenditures, cash payments for transformation costs,
repositioning costs, net asbestos cash flows and other significant items that
impact current results which management believes are not related to our
ongoing operations and performance. Due to other financial obligations and
commitments, the entire free cash flow may not be available for discretionary
purposes.


ITT Corporation Non-GAAP Reconciliation
Reported vs. Organic Revenue / Order Growth
Fourth Quarter 2012 & 2011
                                                                         
($ 000's)
                                                                                 
                                                                    
             (As Reported - GAAP)              (As Adjusted - Organic)
                                                                                 
                     (A)     (B)               (C)            (D)      (E) =     (F) =
                                                                       B+C+D     E / A
                                               
                                                                               
                                               Acquisition    FX       
                             Change   %        /              Impact             %
             3M      3M               Change   Divestitures            Change    Change
             2012    2011    2012                             3M
                             vs.      2012     3M 2012        2012     Adj. 12   Adj.
                             2011     vs.                              vs. 11    12 vs.
                                      2011                                       11
                                                                                 
Revenues
                                                                                      
ITT
Corporation  554.3   509.9   44.4     8.7  %   (14.6    )     4.9      34.7      6.8  %
-
Consolidated
                                                                                 
Industrial   256.5   210.2   46.3     22.0 %   (14.6    )     (1.2 )   30.5      14.5 %
Process
Motion       139.8   135.4   4.4      3.2  %   0.0            5.2      9.6       7.1  %
Technologies
Interconnect 92.1    99.7    (7.6 )   -7.6 %   0.0            0.9      (6.7  )   -6.7 %
Solutions
Control      67.9    68.1    (0.2 )   -0.3 %   0.0            0.1      (0.1  )   -0.1 %
Technologies
                                                                                 
Orders
                                                                                 
Total
Segment      539.2   534.9   4.3      0.8  %   (8.9     )     5.0      0.4       0.1  %
Orders
                                                                                 
Industrial   234.6   235.2   (0.6 )   -0.3 %   (8.9     )     (0.9 )   (10.4 )   -4.4 %
Process
Motion       141.5   149.4   (7.9 )   -5.3 %   0.0            5.0      (2.9  )   -1.9 %
Technologies
Interconnect 92.5    95.0    (2.5 )   -2.6 %   0.0            0.8      (1.7  )   -1.8 %
Solutions
Control      72.2    56.7    15.5     27.3 %   0.0            0.1      15.6      27.5 %
Technologies
                                                                                 
Note:
Excludes
intercompany
eliminations
Immaterial
differences
due to
rounding
                                                                                 

                                                                                 
ITT Corporation Non-GAAP Reconciliation
Reported vs. Organic Revenue / Order Growth
Full Year 2012 & 2011
                                                                                           
($ 000's)
                                                                                           
                                                                              
                 (As Reported - GAAP)                    (As Adjusted - Organic)
                                                                                           
                           (A)       (B)                 (C)            (D)      (E) =     (F) =
                                                                                 B+C+D     E / A
                                                         
                                                       Acquisition                       
                                                         /              FX       
                 12M       12M       Change    %                        Impact             %
                 2012      2011      2012      Change    Divestitures            Change    Change
                                     vs.       2012                     12M      Adj. 12   Adj.
                                     2011      vs.       12M 2012       2012     vs. 11    12 vs.
                                               2011                                        11
                                                                                           
Revenues
                                                                                           
ITT
Corporation      2,227.8   2,085.6   142.2     6.8   %   (37.2    )     58.9     163.9     7.9  %
-
Consolidated
                                                                                           
Industrial       955.8     766.7     189.1     24.7  %   (39.4    )     5.4      155.1     20.2 %
Process
Motion           626.2     634.4     (8.2  )   -1.3  %   0.0            46.5     38.3      6.0  %
Technologies
Interconnect     375.7     417.8     (42.1 )   -10.1 %   2.2            7.1      (32.8 )   -7.9 %
Solutions
Control          277.1     285.5     (8.4  )   -2.9  %   0.0            0.1      (8.3  )   -2.9 %
Technologies
                                                                                           
Orders
                                                                                           
Total
Segment          2,241.8   2,240.4   1.4       0.1   %   (32.5    )     57.1     26.0      1.2  %
Orders
                                                                                           
Industrial       954.9     916.7     38.2      4.2   %   (34.7    )     5.3      8.8       1.0  %
Process
Motion           626.3     642.2     (15.9 )   -2.5  %   0.0            45.3     29.4      4.6  %
Technologies
Interconnect     383.9     413.9     (30.0 )   -7.2  %   2.2            7.0      (20.8 )   -5.0 %
Solutions
Control          283.8     287.7     (3.9  )   -1.4  %   0.0            (0.1 )   (4.0  )   -1.4 %
Technologies
                                                                                           
Note:
Excludes
intercompany
eliminations
Immaterial
differences
due to
rounding
                                                                                           


ITT Corporation
Reported vs Adjusted Segment Operating Income & OI Margin
Fourth Quarter of 2012 & 2011
                                                                                                                                                  
($ 000's)
                                                                                                                                                                        
                           3M 2012      3M 2012      3M 2012            3M 2012      3M 2011      3M 2011      3M 2011            3M 2011      % Change      % Change
                                                                                                                                               As            As
                                                                                                                                               Reported      Adjusted
                                                                                                                                               12            12
                           As           Special      Restructuring      As           As           Special      Restructuring      As           vs. 11        vs. 11
                           Reported     Items                           Adjusted     Reported     Items                           Adjusted
                                                                                                                                                                        
Revenue:
Industrial                 256.5                                        256.5        210.2                                        210.2        22.0%         22.0%
Process
Motion                     139.8                                        139.8        135.4                                        135.4        3.2%          3.2%
Technologies
Interconnect               92.1                                         92.1         99.7                                         99.7         -7.6%         -7.6%
Solutions
Control                    67.9                                         67.9         68.1                                         68.1         -0.3%         -0.3%
Technologies
Intersegment               (2.0   )                                     (2.0   )     (3.5   )                                     (3.5   )     -42.9%        -42.9%
eliminations
Total                      554.3                                       554.3       509.9                                       509.9       8.7%          8.7%
Revenue
                                                                                                                                                                        
Operating
Margin:
Industrial                 7.5    %     200       BP -               BP 9.5    %     9.0    %     100       BP 10              BP 10.1   %     (150)      BP (60)       BP
Process
Motion                     12.2   %     -         BP 20              BP 12.4   %     13.5   %     -         BP -               BP 13.5   %     (130)      BP (110)      BP
Technologies
Interconnect               0.4    %     30        BP 580             BP 6.5    %     4.0    %     50        BP 300             BP 7.5    %     (360)      BP (100)      BP
Solutions
Control                    24.1   %     -         BP -               BP 24.1   %     16.9   %     150       BP -               BP 18.4   %     720        BP 570        BP
Technologies
Total
Operating                  9.6    %     90        BP 100             BP 11.5   %     10.2   %     90        BP 60              BP 11.7   %     (60)       BP (20)       BP
Segments
                                                                                                                                                                        
                                                                                                                                                                        
Income:
Industrial                 19.2         5.1          0.2                24.5         18.9         2.3          0.1                21.3         1.6%          15.0%
Process
Motion                     17.0         0.0          0.2                17.2         18.2         0.1          0.0                18.3         -6.6%         -6.0%
Technologies
Interconnect               0.4          0.2          5.3                5.9          4.0          0.4          3.1                7.5          -90.0%        -21.3%
Solutions
Control                    16.3        0.0          0.0                16.3        11.5        1.0          0.0                12.5        41.7%         30.4%
Technologies
Total
Segment                    52.9        5.3          5.7                63.9        52.6        3.8          3.2                59.6        0.6%          7.2%
Operating
Income
                                                                                                                                                                        
Note: Immaterial differences due to
rounding.
                                                                                                                                                                        
Special items may include, but are not limited to, costs associated with the Bornemann Pumps acquisition, transformation and repositioning costs, restructuring costs and
other unusual and infrequent non-operating items.



ITT Corporation
Reported vs Adjusted Segment Operating Income & OI Margin
Full Year of 2012 & 2011
                                                                                                                                                      
($ 000's)
                                                                                                                                                                            
                                                                                                                                                                            
                           12M 2012      12M          12M 2012           12M 2012      12M 2011      12M          12M 2011           12M 2011      % Change      % Change
                                         2012                                                        2011
                                                                                                                                                   As            As
                                                                                                                                                   Reported      Adjusted
                                                                                                                                                   12            12
                           As            Special      Restructuring      As            As            Special      Restructuring      As            vs. 11        vs. 11
                           Reported      Items                           Adjusted      Reported      Items                           Adjusted
                                                                                                                                                                            
Revenue:
Industrial                 955.8                                         955.8         766.7                                         766.7         24.7%         24.7%
Process
Motion                     626.2                                         626.2         634.4                                         634.4         -1.3%         -1.3%
Technologies
Interconnect               375.7                                         375.7         417.8                                         417.8         -10.1%        -10.1%
Solutions
Control                    277.1                                         277.1         285.5                                         285.5         -2.9%         -2.9%
Technologies
Intersegment               (7.0    )                                     (7.0    )     (18.8   )                                     (18.8   )     -62.8%        -62.8%
eliminations
Total                      2,227.8                                      2,227.8      2,085.6                                      2,085.6      6.8%          6.8%
Revenue
                                                                                                                                                                            
Operating
Margin:
Industrial                 10.4    %     90        BP 10              BP 11.4    %     11.9    %     30        BP -               BP 12.2    %     (150)      BP (80)       BP
Process
Motion                     13.3    %     -         BP 30              BP 13.6    %     13.4    %     20        BP -               BP 13.6    %     (10)       BP -          BP
Technologies
Interconnect               1.8     %     20        BP 200             BP 4.0     %     9.0     %     20        BP 70              BP 9.9     %     (720)      BP (590)      BP
Solutions
Control                    21.0    %     -         BP 30              BP 21.3    %     19.3    %     40        BP 50              BP 20.2    %     170        BP 110        BP
Technologies
Total
Operating                  11.1    %     50        BP 40              BP 12.0    %     12.8    %     40        BP 20              BP 13.4    %     (170)      BP (140)      BP
Segments
                                                                                                                                                                            
                                                                                                                                                                            
Income:
Industrial                 99.3          9.1          0.2                108.6         91.5          2.6          0.4                94.5          8.5%          14.9%
Process
Motion                     83.1          0.0          2.2                85.3          85.3          0.6          0.0                85.9          -2.6%         -1.3%
Technologies
Interconnect               6.9           0.8          7.2                14.9          37.8          0.6          2.9                41.3          -81.7%        -62.7%
Solutions
Control                    58.3         0.0          0.8                59.1         55.2         1.0          1.4                57.6         5.6%          2.3%
Technologies
Total
Segment                    247.6        9.9          10.4               267.9        269.8        4.8          4.7                279.3        -8.2%         -4.4%
Operating
Income
                                                                                                                                                                            
                                                                                                                                                                            
Note: Immaterial differences due to
rounding.
                                                                                                                                                                            
Special items may include, but are not limited to, costs associated with the Bornemann Pumps acquisition, transformation and repositioning costs, restructuring costs and
other unusual and infrequent non-operating items.


                                                                                                                           
ITT Corporation Non-GAAP Reconciliation
Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS
Fourth Quarter of 2012 & 2011
(Unaudited)
($ Millions, except EPS and shares)
                                   
                                                                                                                                        
                                                                                                                           Change       Percent
                                                                                                                                 Change
                                                                                                                           2012 vs.
             Q4 2012      Non-GAAP         Q4 2012          Q4 2011      Non-GAAP         Pro Forma        Q4 2011         2011         2012 vs.
                                                                                                                                        2011
             As           Adjustments      As               As           Adjustments      Adjustments      As              As
             Reported                      Adjusted         Reported                                       Adjusted        Adjusted     As
                                                                                                                                        Adjusted
                                                                                                                                        
                                                                                                     
Segment
Operating    52.9        11.0         #A 63.9            52.6        7.0          #A -               59.6   
Income
                                                                                                                                        
                                                                                                                                        
Interest
Income       (0.6   )     -                (0.6   )         (6.6   )     -                3.0           #C (3.6   )
(Expense)
Other
Income       (1.8   )     -                (1.8   )         1.7          (2.0    )     #B -                (0.3   )
(Expense)
Gain on
sale of      -            -                -                             -                -                -
Assets
Corporate    (31.8  )     23.9         #B (7.9   )         (325.8 )     305.1        #B -               (20.7  )
(Expense)
                                                                                                     
Income
(Loss)
from         18.7        34.9            53.6            (278.1 )     310.1           3.0             35.0   
Continuing
Operations
before Tax
                                                                                                                                        
                                                                                                     
Income Tax
Benefit      3.4         (22.3   )     #D (18.9  )         (268.5 )     268.7        #D (1.1    )        (0.9   )
(Expense)
                                                                                                     
Income
(Loss)
from         22.1        12.6            34.7            (546.6 )     578.8           1.9             34.1   
Continuing
Operations
                                                                                                                                        
                                                                                                     
EPS from
Continuing   0.24        0.13            0.37            (5.87  )     6.15            0.02            0.36     #E   0.01         3%
Operations
                                                                                                                                        
                                                                                                                                        
Note: Amounts may not calculate due
to rounding.
                                                                                                                                        
#A - 2012 Segment operating income includes Transformation & Repositioning costs ($2.1M); Restructuring costs ($5.7M). Bornemann Pumps
acquisition costs, integration costs, and backlog amortization ($3.2M).
#A - 2011 Segment operating income includes Transformation costs ($3.8M) and Restructuring costs ($3.2M).
#B - 2012 Corporate operating expense includes Transformation income & Repositioning costs ($3.7M); Restructuring costs ($2.2M); Asbestos
related expense ($15.8M) and acquisition (Bornemann) expense ($2.2M).
#B - 2011 Other Income includes reversal of a legacy related reserve ($2.0M).
#B - 2011 Corporate operating expense includes Transformation costs ($308.0M); Asbestos provision ($9.6M); Restructuring costs ($0.1M); Release
of guarantee ($9.6M); Gain on Legal entity liquidation ($3.0M).
#C - Pro forma adjustment reflects elimination of interest expense as if repayment of $1,250M of long term debt occurred January 1 and
elimination of interest income as if $400M of aggregate cash was distributed to Exelis and Xylem on January 1
#D - 2012 Includes various tax-related special items including IRS audit settlement, return to provision true-up and tax basis balance sheet
adjustments.
#D - 2011 Includes effect of additional valuation allowance ($340.7M); Charge on undistributed foreign earnings ($69.3M); Benefit from change in
the state tax rates ($31.9M).
#E - Impact of $0.06 in 2011 of increasing share count due to adjusting loss from continuing operations to adjusted income from continuing
operations
Note: Immaterial differences due to rounding
                                                                                                                                        

                                                                                                                           
ITT Corporation Non-GAAP Reconciliation
Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS
Full Year 2012 & 2011
(Unaudited)
($ Millions, except EPS and shares)
            
                                                                                                                                           
                                                                                                                               Change       Percent
                                                                                                                                     Change
                                                                                                                               2012 vs.
               FY 2012      Non-GAAP         FY 2012          FY 2011      Non-GAAP         Pro Forma        FY 2011           2011         2012 vs.
                                                                                                                                            2011
               As           Adjustments      As               As           Adjustments      Adjustments      As                As
               Reported                      Adjusted         Reported                                       Adjusted          Adjusted     As
                                                                                                                                            Adjusted
                                                                                                                                            
                                                                                                       
Segment
Operating      247.6       20.3         #A 267.9           269.8       9.5          #A -               279.3  
Income
                                                                                                                                            
                                                                                                                                            
Interest
Income         2.7          (7.5    )     #B (4.8   )         (72.4  )     (2.0    )     #B 54.0          #E (20.4  )
(Expense)
Other
Income         (5.1   )     -                (5.1   )         (0.8   )     (2.0    )     #C -                (2.8   )
(Expense)
Gain on
sale of        -            -                -                2.2          -                -                2.2
Assets
Corporate      (96.1  )     66.5         #C (29.6  )         (514.7 )     479.1        #C -               (35.6  )
(Expense)
                                                                                                       
Income
(Loss)
from           149.1       79.3            228.4           (315.9 )     484.6           54.0            222.7  
Continuing
Operations
before Tax
                                                                                                                                            
                                                                                                       
Income Tax
Benefit        (39.6  )     (30.8   )     #D (70.4  )         (260.6 )     209.8        #D (20.0   )        (70.8  )
(Expense)
                                                                                                       
Income
(Loss)
from           109.5       48.5            158.0           (576.5 )     694.4           34.0            151.9  
Continuing
Operations
                                                                                                                                            
                                                                                                       
EPS from
Continuing     1.16        0.52            1.68            (6.22  )     7.42            0.36            1.62      #F    0.06         4%
Operations
                                                                                                                                            
                                                                                                                                            
Note: Amounts may not calculate due to
rounding.
                                                                                                                                            
#A - 2012 Segment operating income includes Transformation & Repositioning costs ($5.2M); Restructuring costs ($10.4M). Bornemann Pumps acquisition
costs, integration costs, and backlog amortization ($4.7M).
#A - 2011 Segment operating income includes Transformation costs ($4.8M) and Restructuring costs ($4.7M).
#B - Reduction in Interest expense related to closure of tax audits of ($7.5M) and ($2.0M) for 2012 and 2011, repectively.
#C - 2012 Corporate operating expense includes Transformation costs ($8.7M); Repositioning costs ($7.8); asbestos expense ($50.9M); Restructuring
expense ($3.6M); environmental income ($6.7M); and acquisition (Bornemann) expense ($2.2M)
#C - 2011 Other Income includes reversal of a legacy related reserve ($2.0M).
#C - 2011 Corporate operating expense includes Transformation costs ($391.3M); Annual asbestos remeasurement ($41.0M); Quarterly asbestos provision
($59.4M); Release of guarantee ($9.6M); Gain on Legal entity liquidation ($3.0M).
#D - 2012 Includes various tax-related special items including IRS audit settlement, return to provision true-up and tax basis balance sheet
adjustments.
#D - 2011 Includes effect of additional valuation allowance ($340.7M); Charge on undistributed foreign earnings ($69.3M); Benefit from change in the
state tax rates ($31.9M).
#E - Pro forma adjustment reflects elimination of interest expense as if repayment of $1,250M of long term debt occurred January 1 and elimination
of interest income as if $400M of aggregate cash was distributed to Exelis and Xylem on January 1
#F - Impact of $0.06 in 2011 of increasing share count due to adjusting loss from continuing operations to adjusted income from continuing
operations
Note: Immaterial differences due to rounding
                                                                                                                                            

                                                              
ITT Corporation Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Adjusted Free Cash Flow Conversion
Fourth Quarter 2012 & 2011

($ 000's)
                                                                      
                                                                      
                                                    12M 2012      12M 2011
                                                                      
  Net Cash - Operating Activities                       247.1         (322.4 )
                                                                      
  Capital Expenditures                                  83.8          102.3
                                                                      
  Free Cash Flow, including Transformation          163.3        (424.7     )
                                                                      
  Transformation Capex                                  3.8           17.7
                                                                      
  Repositioning Capex                                   1.5           -
                                                                      
  Transformation Cash Payments                          47.3          355.0
                                                                      
  Repositioning Cash Payments                           5.8           -
                                                                      
  Net Asbestos Cash Payments, Pre-Tax                   20.2          22.0
                                                                      
  Discretionary Pension Contributions, Net of       29.2         -          
  tax
                                                                      
  Adjusted Free Cash Flow                           271.1        (30.0      )
                                                                      
  Income from Continuing Operations                 109.5        (576.5     )
                                                                      
                                                                      
                                                                      
  Special Items (including Transformation &         48.5         728.4      
  Repositioning Costs)
                                                                      
  Income from Continuing Operations, Excluding
  Special Items                                     158.0        151.9      
                                                                             
  Adjusted Free Cash Flow Conversion                171.6     %   NA
                                                                      

Contact:

Investors:
Melissa Trombetta
+1-914-641-2030
melissa.trombetta@itt.com
or
Media:
Kathleen Bark, +1-914-641-2103
kathleen.bark@itt.com