PART I [Description of Business](index=5&type=section&id=Item%201.%20Description%20of%20Business) ITT manufactures engineered components for transportation, industrial, and energy markets through three segments, with 2023 sales of $3.3 billion [Motion Technologies (MT)](index=9&type=section&id=Motion%20Technologies%20(MT)) The Motion Technologies segment manufactures brake pads, shock absorbers, and sealing technologies for automotive and rail, with Continental as a key customer - The MT segment manufactures brake pads, shims, shock absorbers, and sealing technologies for passenger cars, commercial vehicles, buses, and trains[53](index=53&type=chunk) - ITT Friction Technologies is a leader in developing copper-free brake pads specifically for electric vehicles (EVs) and has won multiple EV platform awards[54](index=54&type=chunk) - Sales to Continental, MT's largest customer, represented **16% of the segment's 2023 revenue**. This includes both direct supply agreements with automakers and a long-term agreement for aftermarket parts[63](index=63&type=chunk) [Industrial Process (IP)](index=10&type=section&id=Industrial%20Process%20(IP)) The Industrial Process segment provides industrial pumps, valves, and aftermarket services to energy, chemical, mining, and pharma markets - The IP segment manufactures industrial pumps, valves, and monitoring systems for industries like energy, chemical, mining, and pharmaceuticals[64](index=64&type=chunk) - Aftermarket solutions, including replacement parts, services, and plant optimization, accounted for **approximately 45% of IP's revenue in 2023**[67](index=67&type=chunk) - IP utilizes a global sales channel structure, with about one-third of its revenue coming from sales to independent distributors who service end-users[68](index=68&type=chunk) [Connect & Control Technologies (CCT)](index=11&type=section&id=Connect%20%26%20Control%20Technologies%20(CCT)) The Connect & Control Technologies segment designs and manufactures engineered connectors and specialized products for aerospace, defense, and industrial applications - CCT designs and manufactures highly-engineered connectors and specialized products for markets including aerospace, defense, industrial, transportation, medical, and energy[70](index=70&type=chunk) - The connector portfolio includes brands like Cannon, VEAM, and BIW Connector Systems, known for high-reliability solutions that withstand harsh environments[71](index=71&type=chunk) - Sales to distributors accounted for **approximately 30% of CCT's revenue in 2023**, reflecting long-lasting relationships with its distribution channels[76](index=76&type=chunk) [General Developments of the Business](index=14&type=section&id=General%20Developments%20of%20the%20Business) In 2023-2024, ITT completed strategic acquisitions (Micro-Mode, Svanehøj) and a divestiture (Matrix Composites) to optimize its segment portfolio 2023-2024 Acquisitions and Divestitures | Date | Type | Segment | Business | Description | | :--- | :--- | :--- | :--- | :--- | | May 2, 2023 | Acquisition | CCT | Micro-Mode Products, Inc. | Designer of RF connectors for defense and space. | | Dec 29, 2023 | Divestiture | CCT | Matrix Composites, Inc. | Manufacturer of precision composite components. | | Jan 19, 2024 | Acquisition | IP | Svanehøj Group A/S | Supplier of pumps for the marine sector. | 2023 Company Snapshot | Metric | Value ($) | | :--- | :--- | | Sales | $3.3 billion across ~125 countries | | Global Presence | 67% of revenue outside the U.S. | | Employees | Approx. 10,600 in 37 countries | - ITT operates through three primary segments: Motion Technologies (MT), a manufacturer of brake pads and shock absorbers; Industrial Process (IP), a manufacturer of industrial pumps and valves; and Connect & Control Technologies (CCT), a designer of harsh-environment connectors and flow control components[24](index=24&type=chunk)[25](index=25&type=chunk) - The company's strategy is centered on four priorities: customer centricity, operational excellence, effective capital deployment, and sustainability and innovation[27](index=27&type=chunk) - ITT has set a goal to reduce its global Scope 1 and 2 GHG emissions by **10% by the end of 2026**, compared to a 2021 baseline[36](index=36&type=chunk) - As of December 31, 2023, ITT had **approximately 10,600 employees** in **37 countries**, with **about 2,850 in the U.S.** **Approximately 20% of U.S. employees** are represented by unions[45](index=45&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) ITT faces risks from macroeconomic conditions, raw material volatility, acquisitions, labor shortages, cybersecurity, customer concentration, and regulatory compliance - Business and Operating Risks: The company is exposed to uncertain global economic conditions, raw material price volatility, risks from acquisitions, inability to hire or retain key personnel, failure to innovate, and cybersecurity breaches[91](index=91&type=chunk)[95](index=95&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[106](index=106&type=chunk) - Customer Concentration Risk: Sales to Continental, ITT's largest customer, were **approximately 7% of total revenue in 2023**. The loss of or a reduction in business with this customer could adversely impact financial results[112](index=112&type=chunk) - International Operations Risk: **Approximately 67% of total sales in 2023** were to customers outside the U.S., exposing the company to risks such as geopolitical instability, foreign exchange fluctuations, and tariffs[114](index=114&type=chunk) - Legal and Regulatory Risks: The company faces risks related to government contracting, changes in tax laws (including BEPS Pillar Two), environmental regulations, and compliance with anti-corruption laws like the FCPA[125](index=125&type=chunk)[127](index=127&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[136](index=136&type=chunk) [Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) ITT implements a cybersecurity risk management program based on NIST CSF, overseen by the Audit Committee, with no material incidents in 2023 - The company's cybersecurity risk management program is designed and assessed based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF)[138](index=138&type=chunk) - The Board of Directors' Audit Committee has oversight responsibility for cybersecurity and other information technology risks[141](index=141&type=chunk) - During 2023, there were no cybersecurity incidents that had a material effect on the Company[140](index=140&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) As of December 31, 2023, ITT owns or leases approximately 170 properties globally, with 66 material manufacturing locations Material Properties by Business Segment (as of Dec 31, 2023) | Segment | Owned Locations | Leased Locations | Total Locations | | :--- | :--- | :--- | :--- | | Motion Technologies | 13 | 9 | 22 | | Industrial Process | 11 | 22 | 33 | | Connect & Control Technologies | 5 | 6 | 11 | | **Total** | **29** | **37** | **66** | [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) ITT is involved in various legal proceedings incidental to its business, including environmental, intellectual property, and product liability matters - ITT is involved in legal proceedings incidental to its business, covering areas like environmental exposure, intellectual property, personal injury, and product liabilities[148](index=148&type=chunk) [Information About Our Executive Officers](index=26&type=section&id=Information%20About%20Our%20Executive%20Officers) This section lists the company's executive officers as of February 1, 2024, including their titles and professional biographies - The report provides a list and biographies of the company's executive officers as of February 1, 2024[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) [Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[152](index=152&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=28&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) ITT's common stock trades on the NYSE, with active share repurchase programs and strong five-year total return performance - The company has a **$500 million share repurchase program** from 2019 with **$78.8 million remaining** as of December 31, 2023[157](index=157&type=chunk) - In October 2023, the Board approved a new **$1 billion open-market share repurchase program**, which will begin after the 2019 plan is completed[158](index=158&type=chunk) - No open-market share repurchases were made during the quarter ended December 31, 2023[158](index=158&type=chunk) Comparison of Cumulative Five-Year Total Return | Investment | 12/31/2018 | 12/31/2023 | | :--- | :--- | :--- | | ITT Inc. | $100.00 | $261.68 | | S&P 400 Mid-Cap | $100.00 | $180.90 | | S&P 400 Capital Goods | $100.00 | $251.41 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, ITT achieved strong financial results with revenue growth, margin expansion, and improved operating cash flow, driven by sales volume and pricing 2023 Key Performance Indicators vs. 2022 | Metric | 2023 Value ($M) | YoY Change | | :--- | :--- | :--- | | Revenue | $3,283 M | +10% | | Operating Income | $528 M | +13% | | Operating Margin | 16.1% | +40 bp | | EPS | $4.97 | +13% | | Organic Revenue | $3,229 M | +8% | | Adjusted Operating Income | $555 M | +17% | | Adjusted Operating Margin | 16.9% | +100 bp | | Adjusted EPS | $5.21 | +17% | Revenue by Segment (2023 vs 2022) | Segment | 2023 Revenue ($M) | 2022 Revenue ($M) | Change | Organic Growth | | :--- | :--- | :--- | :--- | :--- | | Motion Technologies | 1,457.8 | 1,374.0 | +6.1% | +4.9% | | Industrial Process | 1,129.6 | 971.0 | +16.3% | +14.3% | | Connect & Control Technologies | 699.4 | 645.6 | +8.3% | +5.7% | | **Total Revenue** | **3,283.0** | **2,987.7** | **+9.9%** | **+8.1%** | Operating Income & Margin by Segment (2023 vs 2022) | Segment | 2023 Op. Income ($M) | 2023 Op. Margin | 2022 Op. Income ($M) | 2022 Op. Margin | | :--- | :--- | :--- | :--- | :--- | | Motion Technologies | 230.8 | 15.8% | 208.5 | 15.2% | | Industrial Process | 243.6 | 21.6% | 187.6 | 19.3% | | Connect & Control Technologies | 107.5 | 15.4% | 115.8 | 17.9% | | **Consolidated ITT** | **528.2** | **16.1%** | **468.0** | **15.7%** | - Net cash from operating activities increased by **$260.3 million** to **$538.0 million** in 2023, primarily due to favorable net working capital impacts, higher operating income, and lower incentive-based compensation payments[221](index=221&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) ITT maintains strong liquidity through cash flow, commercial paper, and a $700 million credit facility, with recent term loan for acquisition and upgraded credit ratings - Primary funding sources include cash flow from operations, a commercial paper program, and a **$700 million revolving credit agreement** maturing in August 2026[205](index=205&type=chunk)[207](index=207&type=chunk)[211](index=211&type=chunk) Commercial Paper Outstanding | As of December 31 | 2023 ($M) | 2022 ($M) | | :--- | :--- | :--- | | U.S. Program | 184.9 | 299.2 | | Euro Program | — | 149.1 | | **Total** | **184.9** | **448.3** | - In January 2024, an indirect subsidiary entered into a **€300 million term loan facility** to finance the acquisition of Svanehøj Group A/S[215](index=215&type=chunk)[216](index=216&type=chunk) - In December 2023, Fitch Ratings upgraded ITT's short-term ratings from **F2** to **F1**, reflecting a conservative capital structure and good financial flexibility[217](index=217&type=chunk) [Key Performance Indicators and Non-GAAP Measures](index=42&type=section&id=Key%20Performance%20Indicators%20and%20Non-GAAP%20Measures) This section defines and reconciles key non-GAAP measures, including organic revenue, adjusted operating income, and adjusted EPS, with 2023 performance details Reconciliation of Revenue to Organic Revenue (2023) | ($ in millions) | Total ITT | | :--- | :--- | | 2023 Revenue | $3,283.0 | | Acquisitions | ($30.5) | | Foreign currency translation | ($23.1) | | **2023 Organic revenue** | **$3,229.4** | | 2022 Revenue | $2,987.7 | | **Organic revenue growth** | **$241.7 (8.1%)** | Reconciliation of Operating Income to Adjusted Operating Income | ($ in millions) | 2023 | 2022 | | :--- | :--- | :--- | | Operating income | $528.2 | $468.0 | | Special Items Adjustments | $26.4 | $5.8 | | **Adjusted operating income** | **$554.6** | **$473.8** | | Operating margin | 16.1% | 15.7% | | **Adjusted operating margin** | **16.9%** | **15.9%** | Reconciliation of EPS to Adjusted EPS | Per Share | 2023 | 2022 | | :--- | :--- | :--- | | Reported EPS | $4.97 | $4.40 | | Adjustments | $0.24 | $0.04 | | **Adjusted EPS** | **$5.21** | **$4.44** | [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) ITT is exposed to market risks from foreign currency, interest rates, and commodity prices, with potential impacts on pre-tax earnings - A hypothetical **10% change** in foreign currency exchange rates would have impacted 2023 pre-tax earnings by **approximately $38 million**[271](index=271&type=chunk) - A hypothetical **100 basis point increase** in interest rates would result in **approximately $1.9 million** of additional annual interest expense based on current borrowing levels[274](index=274&type=chunk) - A hypothetical **10% change** in steel prices is estimated to impact pre-tax earnings by **approximately $8 to $10 million**[277](index=277&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the Index to Consolidated Financial Statements - Refers to the Index to Consolidated Financial Statements[278](index=278&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=49&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[279](index=279&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Management concluded that the Company's disclosure controls and procedures were effective as of December 31, 2023[282](index=282&type=chunk) - Management determined that the Company maintained effective internal control over financial reporting as of December 31, 2023. The assessment excluded Micro-Mode, acquired on May 2, 2023[287](index=287&type=chunk)[288](index=288&type=chunk) - No changes occurred in internal control over financial reporting during Q4 2023 that materially affected, or are reasonably likely to materially affect, internal controls[291](index=291&type=chunk) [Other Information](index=51&type=section&id=Item%209B.%20Other%20Information) This section includes disclosures on a legacy performance bond related to Bornemann GmbH and Rule 10b5-1 trading plans - A legacy performance bond of **€1.3 million** related to the 2012 acquisition of Bornemann remains outstanding for a former Iranian customer. Associated fees of **approximately €7 thousand** were paid in 2023[293](index=293&type=chunk) - During Q4 2023, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans[294](index=294&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=53&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the company's 2024 Proxy Statement[306](index=306&type=chunk) [Executive Compensation](index=53&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the company's 2024 Proxy Statement[311](index=311&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=53&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the company's 2024 Proxy Statement[312](index=312&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=53&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2024 Proxy Statement - Information is incorporated by reference from the company's 2024 Proxy Statement[313](index=313&type=chunk) [Principal Accounting Fees and Services](index=53&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the company's 2024 Proxy Statement[314](index=314&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=54&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the report, including financial statements and various exhibits - This section provides an index to the financial statements and a list of exhibits filed with the report[317](index=317&type=chunk) [Form 10-K Summary](index=54&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not Applicable[316](index=316&type=chunk) Financial Statements [Consolidated Statements of Operations](index=58&type=section&id=Consolidated%20Statements%20of%20Operations) For 2023, ITT reported increased revenue of $3,283.0 million, operating income of $528.2 million, and net income of $410.5 million, or $4.96 per diluted share Consolidated Statements of Operations Highlights (Year Ended Dec 31) | (in millions, except per share) | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | $3,283.0 | $2,987.7 | | Gross profit | $1,107.3 | $922.3 | | Operating income | $528.2 | $468.0 | | Net income attributable to ITT Inc. | $410.5 | $367.0 | | Diluted EPS | $4.96 | $4.38 | [Consolidated Balance Sheets](index=60&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, ITT reported total assets of $3,932.6 million, total liabilities of $1,393.5 million, and total shareholders' equity of $2,539.1 million Consolidated Balance Sheet Highlights (as of Dec 31) | (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $489.2 | $561.2 | | Total current assets | $1,857.7 | $1,836.8 | | Goodwill | $1,016.3 | $964.8 | | **Total assets** | **$3,932.6** | **$3,780.3** | | **Liabilities & Equity** | | | | Short-term borrowings | $187.7 | $451.0 | | Total current liabilities | $1,037.8 | $1,185.5 | | **Total liabilities** | **$1,393.5** | **$1,522.9** | | **Total shareholders' equity** | **$2,539.1** | **$2,257.4** | [Consolidated Statements of Cash Flows](index=61&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For 2023, net cash from operating activities was $538.0 million, with $181.0 million used in investing and $432.3 million in financing activities Consolidated Statements of Cash Flows Highlights (Year Ended Dec 31) | (in millions) | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash – Operating activities | $538.0 | $277.7 | | Net Cash – Investing activities | ($181.0) | ($255.1) | | Net Cash – Financing activities | ($432.3) | ($83.3) | | Net change in cash and cash equivalents | ($72.0) | ($86.4) | | Cash and cash equivalents – end of year | $489.9 | $561.9 |

22 Reconciliation of GAAP vs Adjusted EPS Guidance - Full Year 2024 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------------------------------------------|-------|---------------------|-------|---------------------|-------|---------------------|-------|---------------------|-------|------------------------------------|-------|----------------| | Net Cash - Operating Activities Less: Capital expenditures 39.1 30.2 107. ...

Financial Performance - Net income for Q3 2023 was $111.8 million, an increase of 8.3% compared to $103.2 million in Q3 2022[19] - Comprehensive income attributable to ITT Inc. for Q3 2023 was $81.2 million, up from $69.2 million in the same quarter last year, reflecting a growth of 17.9%[19] - For the nine months ended September 30, 2023, net income reached $321.4 million, a significant increase of 26.9% from $253.3 million in the prior year[19] - Total comprehensive income for the nine months ended September 30, 2023, was $286.9 million, compared to $137.1 million for the same period in 2022, indicating a substantial increase of 109.5%[19] - For Q3 2023, ITT Inc. reported total revenue of $822.1 million, a 9.1% increase from $753.6 million in Q3 2022[43] - For the nine months ended September 30, 2023, total revenue was $2,453.9 million, a 10.9% increase from $2,213.1 million in the same period of 2022[43] - The nine-month operating income was $409.4 million, up 29.1% from $317.1 million in the prior year, with an operating margin of 16.7% compared to 14.3%[43] Segment Performance - Motion Technologies segment revenue increased to $359.5 million in Q3 2023 from $342.2 million in Q3 2022, with an operating income of $59.4 million and an operating margin of 16.5%[43] - Industrial Process segment revenue rose to $279.8 million in Q3 2023 from $248.5 million in Q3 2022, with operating income increasing to $64.7 million and an operating margin of 23.1%[43] - Connect & Control Technologies segment revenue grew to $184.0 million in Q3 2023 from $163.2 million in Q3 2022, with operating income of $33.2 million and an operating margin of 18.0%[43] Assets and Liabilities - As of September 30, 2023, total assets increased to $3,802.3 million from $3,780.3 million as of December 31, 2022, reflecting a growth of 0.6%[21] - Total current liabilities decreased to $1,044.0 million from $1,185.5 million, a reduction of 11.9%[21] - The total shareholders' equity as of September 30, 2023, was $2,419.2 million, up from $2,257.4 million at the end of 2022, indicating a growth of 7.2%[21] - The total debt and finance leases decreased to $251.9 million as of September 30, 2023, from $458.7 million as of December 31, 2022, a significant reduction of about 45%[81] - Commercial paper outstanding decreased to $242.7 million as of September 30, 2023, from $448.3 million as of December 31, 2022, a decline of approximately 46%[83] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2023, was $367.6 million, significantly higher than $115.2 million in the prior year[23] - The company reported a net cash outflow from investing activities of $142.0 million for the nine months ended September 30, 2023, compared to an outflow of $244.8 million in the same period of 2022[23] - Capital expenditures for the nine months ended September 30, 2023, were $68.5 million, slightly lower than $73.7 million in the same period of 2022[23] Shareholder Returns - Dividends paid increased to $71.9 million in 2023 from $66.1 million in 2022, reflecting an increase of 11.0%[23] - The company repurchased and retired 0.7 million shares of common stock for $60.5 million during the nine months ended September 30, 2023, compared to 3.0 million shares for $245.3 million in the same period of 2022[93] - An indefinite term $1,000 million open-market share repurchase program was approved on October 4, 2023, to commence after the completion of the existing $500 million program[94] Challenges and Risks - ITT Inc. is facing challenges such as supply chain disruptions and raw material shortages, which could impact future performance[13] - The company is actively managing risks related to foreign currency fluctuations and their potential impact on revenues[13] - The company anticipates continued growth driven by strategic plans and market expansion initiatives, although specific numerical guidance was not provided[10] Tax and Subsidies - The effective tax rate for Q3 2023 was 21.1%, up from 13.7% in Q3 2022, primarily due to prior year benefits from a valuation allowance reversal[51] - The company recognized a benefit of $6.3 million related to energy subsidies for the nine months ended September 30, 2023, which was recorded within Costs of revenue[64] Acquisitions - ITT Inc. completed the acquisition of Micro-Mode Products, Inc. for a purchase price of $79.3 million on May 2, 2023, with results reported in the Connect & Control Technologies segment[29] - The company signed an agreement to acquire Svanehøj Group A/S for approximately $395 million, expected to close in the first quarter of 2024[117] Employee Compensation - Total share-based compensation expense for the three months ended September 30, 2023, was $5.4 million, an increase from $5.0 million in the same period of 2022[91] - The company had no open-market share repurchases during Q3 2023, contrasting with repurchases of 0.1 million shares for $4.4 million in Q3 2022[93]

Organic revenue growth +12% Q2 SUMMARY RESULTS Share Count, Interest, Tax Rate - FX hedge benefit in prior year Adjusted segment operating margin Operational margins subtotal 19.9% KEY PERFORMANCE INDICATORS & NON-GAAP MEASURES Special items include, but are not limited to, restructuring costs, acquisition-related expenses, and other unusual or infrequent items. 16 #A Represents expected revenue growth of 8%, reflecting the mid-point of the 7% to 9% range. 4 (+50 bps) Headwinds Price / Cost FX Strategic Ini ...

Emmanuel Caprais And then if you look at our rail platform, KONI and Axtone, we see many opportunities, both from a pricing standpoint and also a productivity standpoint. So here in pricing, we have just scratched the surface, but there's still much more to go after. And because this is the longer cycle business, we're not seeing all the impacts of pricing yet in our P&L. So we're going to continue to drive this. And with further margin expansion from KONI, Axtone as well as from Friction, we expect really ...

2022 Performance Highlights - Organic orders grew by +12%[9], marking the 7th consecutive quarter of double-digit growth[9] - Organic revenue increased by +17%[9] - Adjusted EPS grew by +22%[9] - The ending backlog reached approximately $1.1 billion[9] - Connectors saw CCT growth of +13%, while aerospace components experienced growth of +26%[4] Q4 2022 Financial Results - Q4 2022 revenue was $775 million, compared to $685 million in Q4 2021[30] - Adjusted EPS for Q4 2022 was $1.29, compared to $1.06 in Q4 2021[34] - The company experienced a +660 bps price impact on margins in Q4[24] Full Year 2022 Financial Results - Full year 2022 revenue reached $2.988 billion, compared to $2.765 billion in 2021[113] - Adjusted EPS for the full year 2022 was $4.44, compared to $4.05 in 2021[115] - The company achieved +12% organic revenue growth[102] 2023 Outlook - The company anticipates revenue growth of 7% to 9%, with 6% to 8% being organic[84] - Adjusted EPS is projected to be between $4.55 and $4.95, representing a +2% to +11% growth[84] - Free cash flow is expected to be between $350 million and $400 million, with a margin of +11% to +12%[84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from_____ to _____ Commission File No. 001-05672 ITT INC. Incorporated in the State of Indiana 81-1197930 (State or Other Jurisdiction of Incorporation or Organization) ...

Financial Data and Key Metrics Changes - ITT reported a revenue growth of over 17%, driven by double-digit growth across all business segments [37][134] - The company achieved a record segment margin in Q4, overcoming approximately $50 million in cost inflation [35][138] - Adjusted EPS growth is expected to be 7% at the midpoint for 2023, with a strong focus on improving cash flow generation [13][142] Business Line Data and Key Metrics Changes - Industrial Process (IP) saw organic revenue growth of 27%, with project bookings increasing over 70% [4][37] - Connect and Control Technologies (CCT) grew sales by 16%, supported by strong demand in aerospace components [134][128] - Motion Technologies (MT) experienced a decline in margins to 14.7%, impacted by higher material and labor costs [137][100] Market Data and Key Metrics Changes - The rail business grew 10% organically, with orders up 35%, particularly strong in Europe [7] - The automotive market is expected to be flat to low single digits in 2023, with a slowdown anticipated in Europe during the second half [11][56] - Demand for EV connectors grew significantly, with orders reaching almost $40 million in 2022 [130] Company Strategy and Development Direction - The company is focusing on value-based pricing strategies and improving supply chain effectiveness to drive long-term value creation [9][43] - ITT is investing in new product development and innovation, particularly in electrification and clean energy projects [10][14] - The company aims to achieve a 30% global market share in the EV space by 2026, leveraging its competitive advantages [86][121] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2023, expecting strong performance in the first half but anticipating a slowdown in the second half due to economic conditions [57][142] - The company is committed to maintaining pricing discipline while navigating ongoing cost inflation and supply chain challenges [52][100] - Management highlighted the importance of execution and market share gains as key differentiators for future growth [44][144] Other Important Information - ITT announced a 10% increase in dividends and repurchased over $250 million of shares, reducing the share count by 3% [36] - The company is experiencing strong cash flow generation, with a free cash flow margin of 17% in Q4, the best performance of the year [35][129] - ITT's effective purchase multiple has decreased to 8-9x, down from approximately 12x at the time of acquisition [36] Q&A Session Summary Question: What are the expectations for price versus cost inflation in 2023? - Management indicated that while they were slightly price positive in Q3 and Q4 of 2022, they expect to maintain that in 2023 despite some headwinds from commodity costs [46] Question: Can you provide specific examples of growth in IP projects? - Management highlighted significant orders in energy projects, including initiatives in Nigeria, Angola, and Malaysia, indicating strong international growth [22] Question: What is the outlook for margins in Motion Technologies? - Management expects MT to return to high teens margins in the long term, although it may take longer than other segments due to current challenges [70] Question: How does the company view competition in the EV space? - Management acknowledged increased competition but emphasized their ability to differentiate and maintain market share through innovation and customer focus [64][86] Question: What are the expectations for the global economy's impact on business? - Management anticipates a significant deceleration in the global economy in the second half of 2023, affecting various segments [57][101]

Financial Data and Key Metrics Changes - ITT reported a 21% increase in EPS, marking the highest quarterly earnings on record for the company [8] - Organic revenue grew by 15%, driven by strong pricing and higher sales volumes across all businesses [10][24] - Operating margin improved to 16.9%, reflecting a 140 basis points increase despite over 700 basis points headwind from cost inflation [26] Business Line Data and Key Metrics Changes - Industrial Process (IP) saw an 11% organic orders growth, with margins expanding by 550 basis points year-over-year [9][11] - Connect & Control Technologies (CCT) achieved 12% organic orders growth, with a margin expansion of over 100 basis points year-over-year [10][32] - Motion Technologies (MT) reported a 22% organic growth in friction revenue, although aftermarket growth slowed to 1% due to high distributor inventory [24][30] Market Data and Key Metrics Changes - Demand remained strong across most end markets, with notable growth in commercial aerospace and defense [9][24] - North American auto production is expected to improve, while Europe may remain at low levels due to ongoing challenges [38] - The strengthening of the USD negatively impacted sales by approximately 800 basis points, equating to a $0.04 EPS impact [25] Company Strategy and Development Direction - ITT is focusing on value-based pricing strategies and operational improvements to enhance profitability [10][12] - The company is investing in sustainability initiatives, including solar energy projects and a commitment to reducing greenhouse gas emissions [20][23] - ITT aims to maintain agility in adjusting its cost structure in response to economic uncertainties and supply chain disruptions [22] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential economic slowdowns and ongoing supply chain challenges [37][41] - The aerospace recovery is expected to continue, with strong order rates in CCT [39][85] - The company anticipates a high teens organic sales growth in Q4, driven by IP and CCT [35] Other Important Information - ITT's backlog exceeded $1 billion, providing a solid foundation for future growth [33] - The company is actively managing working capital to improve free cash flow generation, which has been below expectations [27][97] Q&A Session Summary Question: Commentary on industrial connectors and market deterioration - Management noted that while industrial connectors grew, there was a softening in purely industrial connectors, indicating a potential economic slowdown [44] Question: Challenges in pricing acceptance - Management indicated that ITT achieved price-cost neutrality for the first time in Q3, with expectations for improvement in Q4 [46] Question: Margin progression in Motion Technologies - Management acknowledged continued pressure from commodities and a negative mix impact on margins, with expectations for improvement in 2023 [50][51] Question: Pump market share and project delays - Management reported strong growth in short-cycle orders but noted delays in project sign-offs, particularly in Europe [60] Question: CapEx expectations and EV platform risks - Management expects a stronger Q4 for capital investments while remaining cautious about potential recession impacts [70] Question: Interest rates and working capital strategy - Management is focused on improving cash performance and managing inventory effectively to mitigate the impact of rising interest rates [97]

ITT Inc. (NYSE:ITT) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Mark Macaluso - VP, IR Luca Savi - CEO and President Emmanuel Caprais - CFO Conference Call Participants Mike Halloran - Baird Jeff Hammond - KeyBanc Adam Farley - Stifel Vlad Bystricky - Citigroup Damian Karas - UBS Joe Giordano - Cowen Sabrina Abrams - Bank of America Matt Summerville - D.A. Davidson Operator Welcome to ITT's 2022 Second Quarter Conference Call. Today is Thursday, August 4th, 2022. Today's ...