ITT Reports 2016 Second-Quarter Results

ITT Inc. (NYSE:ITT) today reported 2016 second-quarter financial results
that reflect the benefits of a diversified portfolio and effective
capital deployment in today’s challenging economic environment, as the
impacts of continued weakness in the oil and gas and mining markets were
partially offset by significant growth across our transportation
businesses and the benefits of recent acquisitions.

“Over the past two years, ITT has consistently faced a challenging
macroeconomic environment that has created persistent weakness in key
end markets including oil and gas, mining and general industrial. During
this time, we have proactively addressed these headwinds by leveraging
our balanced and diverse portfolio to drive growth in more robust
markets, improve productivity, proactively restructure to optimize our
businesses, and deploy capital to position ITT for the long-term,” said
ITT CEO and President Denise Ramos.

“The same was true in the second quarter as solid growth and share gains
by our automotive brake pad business and the benefits from the Wolverine
acquisition offset the impact of project activity demand and delayed
customer maintenance at our Industrial Process business. And from an
operational perspective, each of our four businesses delivered strong
productivity gains, while our Industrial Process and Interconnect
Solutions businesses also advanced the proactive resets of their
operational structures.

“In the second quarter, we also continued to drive benefits from
disciplined capital deployment as our Wolverine acquisition delivered
strong results ahead of schedule while providing new opportunities for
long-term transportation platform growth. The development of our North
American automotive brake pad facility and related new platform wins are
also progressing nicely ahead of schedule. And, as it relates to returns
to shareholders, we executed $20 million of share repurchases in the
second quarter, and are announcing up to an additional $50 million of
discretionary repurchases that are expected by the end of the year,
primarily depending on the actionability of acquisitions.”

2016 Second-Quarter Results

On a GAAP basis, revenue was flat at $626 million due to strong
transportation growth, including the incremental benefits from our
Wolverine acquisition, which offset project declines in global oil and
gas and mining markets, softness in the chemical and industrial markets,
and unfavorable foreign exchange. GAAP segment operating income
decreased 20 percent to $72 million due to higher restructuring and
realignment costs, as well as a trade name impairment. GAAP EPS
decreased to $0.36 due to a significant prior-year asbestos-related
benefit, higher restructuring and realignment costs, and tax items.

On an adjusted basis, organic revenue (defined as total revenue
excluding foreign exchange, acquisition and divestiture impacts)
declined 6 percent due to weakness across global flow markets that was
partially offset by strong growth in global transportation markets.
Adjusted segment operating income declined 4 percent to $92 million
reflecting productivity and restructuring benefits that were offset by
negative impacts from lower high-margin, aftermarket volumes; increased
strategic investments; and pricing pressure in Motion Technologies and
Industrial Process. Adjusted EPS decreased 3 percent to $0.67 reflecting
lower adjusted segment operating income and a higher effective tax rate
that were partially offset by lower corporate costs.

For a reconciliation of GAAP to non-GAAP results and guidance, please click
here.

2016 Second-Quarter Business Segment Results
All
quarterly results are compared with the respective prior-year periods.

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

• Total revenue decreased 26 percent to $214 million, with organic
  revenue down 22 percent. Both measures reflect the impact of weakness
  in the oil and gas and mining markets on our project pumps and
  aftermarket businesses, which was partially offset by improvements in
  short-cycle baseline pumps and valves. Total revenue also includes the
  impact of unfavorable foreign exchange.
• GAAP operating income decreased 85 percent to $6 million, and adjusted
  segment operating income decreased 41 percent to $24 million. Both
  measures reflect lower volumes across key end markets, which were
  partially offset by the benefits of productivity and restructuring
  actions. GAAP operating income also includes higher restructuring
  costs and a trade name impairment recorded in the second quarter
  related to weakness in the oil and gas market.

Motion Technologies designs and manufactures braking
technologies, shock absorbers and specialized sealing solutions for the
automotive and rail markets.

• Total revenue increased 41 percent to $260 million, and organic
  revenue increased 15 percent. Both measures reflect significant share
  gains and market growth in global automotive brake pads in both the
  OEM and aftermarket due to OEM market share gains in each of our key
  geographies of Europe, China and North America; strong aftermarket
  activity; and automotive market growth. Total revenue also includes
  incremental revenue from the 2015 acquisition of Wolverine Advanced
  Materials and the impact of favorable foreign exchange.
• GAAP operating income increased 32 percent to $49 million, and
  adjusted segment operating income increased 35 percent to $50 million.
  Both increases reflect higher volume, benefits from productivity
  actions and favorable impacts from the acquisition of Wolverine
  Advanced Materials, which were partially offset by unfavorable impacts
  from pricing pressures.

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

• Total revenue decreased 5 percent to $79 million, and organic revenue
  declined 6 percent. Both decreases reflect weakness in the global oil
  and gas market that was partially offset by gains in the aerospace and
  defense market. Total revenue includes the modest impact of
  favorable foreign currency exchange.
• GAAP operating income increased to $5 million and adjusted segment
  operating income decreased 2 percent to $5 million. Both measures
  reflect the benefits of improved operations and productivity and
  restructuring actions, which were offset by the unfavorable impacts of
  volume, mix and pricing. GAAP operating income benefited from lower
  restructuring costs compared to the prior year.

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

• Total revenue was flat at $75 million and organic revenue increased 2
  percent, reflecting growth in aerospace and defense, which was offset
  by softness in global industrial markets driven by energy market
  dynamics. Total revenue growth was unfavorably impacted by prior-year
  revenue from a divested industrial product line.
• GAAP operating income decreased 2 percent to $12 million and adjusted
  segment operating income increased 4 percent to $13 million,
  reflecting the benefits of favorable productivity and restructuring
  actions. GAAP operating income also includes realignment costs related
  to the recent Hartzell acquisition.

2016 Guidance

The company is lowering its previously announced full-year 2016 GAAP and
organic revenue guidance. GAAP revenue is now expected to be down 3
percent to down 5 percent, and organic revenue is expected to be down 7
percent to down 9 percent, primarily due to negative impacts from weaker
than expected aftermarket activities and lower project revenues due to
customer delays at Industrial Process, partially offset by incremental
growth in automotive due to greater visibility in the aftermarket.

The company is also lowering its GAAP and adjusted EPS guidance
primarily due to its revised volume expectations for the second half of
the year at Industrial Process. As a result, the company now expects the
GAAP EPS guidance range to be $1.40 to $1.62 and the adjusted EPS
guidance range to be $2.34 to $2.46 with a mid-point of $2.40.

Investor Call Today

ITT's senior management will host a conference call for investors today
at 9 a.m. ET 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/investors
and will be available on the website from two hours after the webcast
until Thursday, Aug. 18, 2016, at midnight.

All references to EPS are defined as diluted earnings per share from
continuing operations.

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 2015 revenues of $2.5
billion. For more information, visit www.itt.com.

Safe Harbor Statement

This release contains “forward-looking statements” intended to qualify
for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995 (the “Act”). No forward-looking statement
can be guaranteed, and actual results may differ materially from those
projected. All forward-looking statements included in this release are
based on information available to us on the date hereof, and we
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. The forward-looking statements are not historical facts, but
rather are based on current expectations, estimates, assumptions and
projections about the business and future financial results of the
industry in which we operate, and other legal, regulatory and economic
developments. 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.

We use words such as “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “believe,” “target,” “future,” “may,” “will,” “could,”
“should,” “potential,” “continue,” “guidance” and other similar
expressions 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.

Forward-looking statements in this release should be evaluated together
with the risks and uncertainties that affect our business, particularly
those mentioned in the Risk Factors section of the Company's Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents
filed from time to time with the Securities and Exchange Commission.

ITT INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED INCOME STATEMENTS
(In millions, except per share)
(Unaudited)
			Three Months									Six Months
For the Periods Ended June 30			2016				2015					2016			2015
Revenue			$	626.2			$	628.2				$	1,235.3		$	1,216.9
Costs of revenue				420.6				414.3					834.4			804.0
Gross Profit				205.6				213.9					400.9			412.9
General and administrative expenses				74.0				66.5					143.0			126.6
Sales and marketing expenses				46.0				48.8					89.3			96.1
Research and development expenses				21.1				18.9					40.3			37.2
Asbestos-related costs (benefit), net				15.0				(84.8	)				27.8			(69.4	)
Operating Income				49.5				164.5					100.5			222.4
Interest and non-operating (income) expenses, net				(0.5	)			0.3					1.2			1.5
Income from continuing operations before income tax expense				50.0				164.2					99.3			220.9
Income tax expense				17.5				23.5					29.2			41.6
Income from continuing operations				32.5				140.7					70.1			179.3
Income from discontinued operations, net of tax				0.5				1.7					0.2			5.1
Net Income				33.0				142.4					70.3			184.4
Less: Income attributable to noncontrolling interests				0.2				0.1					0.1			-
Net Income attributable to ITT Inc.			$	32.8			$	142.3				$	70.2		$	184.4
Amounts attributable to ITT Inc.:
Income from continuing operations, net of tax			$	32.3			$	140.6				$	70.0		$	179.3
Income from discontinued operations, net of tax				0.5				1.7					0.2			5.1
Net Income			$	32.8			$	142.3				$	70.2		$	184.4
Earnings (loss) per share attributable to ITT Inc.:
Basic:
Continuing operations			$	0.36			$	1.57				$	0.78		$	1.99
Discontinued operations				-				0.02					-			0.06
Net income			$	0.36			$	1.59				$	0.78		$	2.05
Diluted:
Continuing operations			$	0.36			$	1.56				$	0.78		$	1.97
Discontinued operations				-				0.02					-			0.06
Net income			$	0.36			$	1.58				$	0.78		$	2.03
Weighted average common shares - basic				89.8				89.3					89.7			90.0
Weighted average common shares - diluted				90.4				90.2					90.4			91.0

ITT INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
				June 30,				December 31,
				2016				2015
				(Unaudited)
Assets
Current Assets:
Cash and cash equivalents				$	433.3			$	415.7
Receivables, net					625.1				584.9
Inventories, net					299.3				292.7
Other current assets					170.1				204.4
Total current assets					1,527.8				1,497.7
Plant, property and equipment, net					437.9				443.5
Goodwill					788.3				778.3
Other intangible assets, net					171.8				187.2
Asbestos-related assets					316.4				337.5
Deferred income taxes					326.2				326.1
Other non-current assets					181.9				153.3
Total non-current assets					2,222.5				2,225.9
Total assets				$	3,750.3			$	3,723.6
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term loans and current maturities of long-term debt				$	219.0			$	245.7
Accounts payable					310.0				314.7
Accrued liabilities					387.3				392.7
Total current liabilities					916.3				953.1
Asbestos-related liabilities					950.6				954.8
Postretirement benefits					257.3				260.4
Other non-current liabilities					209.3				189.9
Total non-current liabilities					1,417.2				1,405.1
Total liabilities				$	2,333.5			$	2,358.2
Total ITT Inc. shareholders' equity					1,415.2				1,362.1
Noncontrolling interests					1.6				3.3
Total shareholders' equity					1,416.8				1,365.4
Total liabilities and shareholders' equity				$	3,750.3			$	3,723.6

ITT INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
For the Six Months Ended June 30				2016					2015
Operating Activities
Net income				$	70.3				$	184.4
Less: Income from discontinued operations					0.2					5.1
Less: Income attributable to noncontrolling interests					0.1					-
Income from continuing operations attributable to ITT Inc.					70.0					179.3
Adjustments to income from continuing operations:
Depreciation and amortization					51.1					41.9
Stock-based compensation					5.9					6.9
Asbestos-related costs (benefit), net					27.8					(69.4	)
Asbestos-related payments, net					(11.5	)				(6.5	)
Changes in assets and liabilities:
Change in receivables					(45.6	)				(71.8	)
Change in inventories					(3.7	)				2.0
Change in accounts payable					(4.3	)				4.5
Change in accrued expenses					(28.1	)				(19.6	)
Change in accrued and deferred income taxes					9.7					30.4
Other, net					0.3					(8.2	)
Net Cash - Operating Activities					71.6					89.5
Investing Activities
Capital expenditures					(46.1	)				(46.0	)
Acquisitions, net of cash acquired					(0.2	)				(53.5	)
Purchases of investments					(60.6	)				(73.0	)
Maturities of investments					108.7					20.6
Proceeds from sale of businesses and other assets					1.2					8.9
Proceeds from insurance recovery					-					2.5
Other, net					0.2					0.3
Net Cash - Investing Activities					3.2					(140.2	)
Financing Activities
Commercial paper, net borrowings					23.5					68.7
Short-term revolving loans, borrowings					27.7					-
Short-term revolving loans, repayments					(78.3	)				-
Long-term debt, repayments					(0.6	)				(1.9	)
Repurchase of common stock					(27.5	)				(83.7	)
Proceeds from issuance of common stock					8.8					5.3
Dividends Paid					(22.5	)				(11.0	)
Excess tax benefit from equity compensation activity					3.4					3.0
Other, net					(2.3	)				-
Net Cash - Financing Activities					(67.8	)				(19.6	)
Exchange rate effects on cash and cash equivalents					4.0					(14.0	)
Net Cash – Discontinued operations					6.6					(2.3	)
Net change in cash and cash equivalents					17.6					(86.6	)
Cash and cash equivalents - beginning of year					415.7					584.0
Cash and cash equivalents - end of period				$	433.3				$	497.4

Key Performance Indicators and Non-GAAP Measures
Management reviews a variety of key performance indicators including revenue, segment operating income and margins, earnings per share, order 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 acquisitions, dividends 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 our reconciliation tables.
Organic Revenues and Organic Orders are defined as revenues and orders, excluding the impacts of foreign currency fluctuations, acquisitions and divestitures. Divestitures include sales of 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 is estimated using a fixed exchange rate for both the current and prior periods. Management believes that reporting organic revenue and organic orders provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers.
Adjusted Operating Income, Adjusted Segment Operating Income and Adjusted Segment Operating Margin are defined as total operating income and segment operating income, adjusted to exclude special items that include, but are not limited to, restructuring and realignment costs, certain asset impairment charges, repositioning costs, certain acquisitions-related expenses, and other unusual or infrequent operating items. Special items represent significant charges or credits that impact the current results, which management views as unrelated to the Company's ongoing operations and performance. Adjusted segment operating margin is defined as adjusted segment operating income divided by total revenue. We believe that adjusted segment operating income is useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Income from Continuing Operations, Adjusted EPS and Adjusted EPS Guidance are defined as income from continuing operations attributable to ITT Inc. and income from continuing operations attributable to ITT Inc. per diluted share, adjusted to exclude special items that include, but are not limited to, asbestos-related costs, repositioning costs, restructuring and realignment costs, certain asset impairment charges, certain acquisition-related expenses, income tax settlements or adjustments, and other unusual and infrequent non-operating items. Special items represent significant charges or credits, on an after-tax basis, that impact current results, which management views as unrelated to the Company's ongoing operations and performance. We believe that adjusted income from continuing operations is useful to investors and other users of our financial statements in evaluating ongoing operating profitability, as well as in evaluating operating performance in relation to our competitors.
Adjusted Free Cash Flow is defined as net cash provided by operating activities less capital expenditures, adjusted for cash payments for restructuring and realignment actions, repositioning costs, net asbestos cash flows and other significant items that impact current results which management views as unrelated to the Company's ongoing operations and performance. Due to other financial obligations and commitments, including asbestos, the entire free cash flow may not be available for discretionary purposes. We believe that adjusted free cash flow provides useful information to investors as it provides insight into the primary cash flow metric used by management to monitor and evaluate cash flows generated by our operations.

ITT Inc. Non-GAAP Reconciliation
Reported vs. Organic Revenue / Order Growth
Second Quarter 2016 & 2015
(In Millions)
			(As Reported - GAAP)											(As Adjusted - Organic)
					(A)		(B)							(C)			(D)			(E) = B-C-D			(F) = E / A
							Change			% Change				Acquisition / Divestitures			FX Impact			Change			% Change
			3M 2016		3M 2015		2016 vs. 2015			2016 vs. 2015				3M 2016			3M 2016			Adj. 2016 vs. 2015			Adj. 2016 vs. 2015
Revenues
ITT Inc. - Consolidated			626.2		628.2		(2.0	)		(0.3	%)			42.9			(5.4	)		(39.5	)		(6.3	%)
Industrial Process			214.2		287.5		(73.3	)		(25.5	%)			-			(9.2	)		(64.1	)		(22.3	%)
Motion Technologies			259.6		184.4		75.2			40.8	%			44.3			2.8			28.1			15.2	%
Interconnect Solutions			78.8		82.7		(3.9	)		(4.7	%)			-			0.8			(4.7	)		(5.7	%)
Control Technologies			74.8		74.5		0.3			0.4	%			(1.4	)		0.2			1.5			2.0	%
Orders
Total Segment Orders			605.9		586.2		19.7			3.4	%			42.1			(2.6	)		(19.8	)		(3.4	%)
Industrial Process			199.7		232.1		(32.4	)		(14.0	%)			-			(6.8	)		(25.6	)		(11.0	%)
Motion Technologies			261.2		185.7		75.5			40.7	%			44.6			2.9			28.0			15.1	%
Interconnect Solutions			73.1		83.1		(10.0	)		(12.0	%)			-			0.9			(10.9	)		(13.1	%)
Control Technologies			72.8		86.3		(13.5	)		(15.6	%)			(2.5	)		0.2			(11.2	)		(13.0	%)
Note: Excludes intercompany eliminations
Immaterial differences due to rounding

ITT Inc. Non-GAAP Reconciliation
Reported vs Adjusted Segment Operating Income & Operating Margin
Second Quarter 2016 & 2015
(In Millions)
				3M 2016			3M 2016				3M 2016			3M 2015			3M 2015				3M 2015			% Change				% Change
				As Reported			Special Items				As Adjusted			As Reported			Special Items				As Adjusted			As Reported 2016 vs. 2015				As Adjusted 2016 vs. 2015
Revenue:
Industrial Process				214.2							214.2			287.5							287.5			(25.5	%)			(25.5	%)
Motion Technologies				259.6							259.6			184.4							184.4			40.8	%			40.8	%
Interconnect Solutions				78.8							78.8			82.7							82.7			(4.7	%)			(4.7	%)
Control Technologies				74.8							74.8			74.5							74.5			0.4	%			0.4	%
Intersegment eliminations				(1.2	)						(1.2	)		(0.9	)						(0.9	)
Total Revenue				626.2							626.2			628.2							628.2			(0.3	%)			(0.3	%)
Operating Margin:
Industrial Process				2.9	%		840		BP		11.3	%		14.4	%		(20	)	BP		14.2	%		(1,150	)	BP		(290	)	BP
Motion Technologies				18.8	%		50		BP		19.3	%		20.1	%		-		BP		20.1	%		(130	)	BP		(80	)	BP
Interconnect Solutions				6.1	%		-		BP		6.1	%		(1.0	%)		690		BP		5.9	%		710		BP		20		BP
Control Technologies				16.0	%		160		BP		17.6	%		16.4	%		60		BP		17.0	%		(40	)	BP		60		BP
Total Operating Segments				11.5	%		320		BP		14.7	%		14.3	%		90		BP		15.2	%		(280	)	BP		(50	)	BP
Income (loss):
Industrial Process				6.3			17.9				24.2			41.5			(0.6	)			40.9			(84.8	%)			(40.8	%)
Motion Technologies				48.9			1.1				50.0			37.0			-				37.0			32.2	%			35.1	%
Interconnect Solutions				4.8			-				4.8			(0.8	)		5.7				4.9			na				(2.0	%)
Control Technologies				12.0			1.2				13.2			12.2			0.5				12.7			(1.6	%)			3.9	%
Total Segment Operating Income				72.0			20.2				92.2			89.9			5.6				95.5			(19.9	%)			(3.5	%)

Note: Immaterial differences due to rounding.

Special items include, but are not limited to, restructuring and realignment costs, certain asset impairment charges, acquisition-related expenses, and other unusual or infrequent operating items.

ITT Inc. Non-GAAP Reconciliation
Reported vs. Adjusted Income from Continuing Operations & Adjusted EPS
Second Quarter 2016 & 2015
(In Millions, except per share amounts)
																					Percent Change
				Q2 2016		Non-GAAP				Q2 2016		Q2 2015		Non-GAAP			Q2 2015		2016 vs. 2015		2016 vs. 2015
				As Reported		Adjustments				As Adjusted		As Reported		Adjustments			As Adjusted		As Adjusted		As Adjusted
Segment Operating Income				72.0		20.2		#A		92.2		89.9		5.6		#A	95.5
Corporate (Expense)				(22.5)		15.8		#B		(6.7)		74.6		(84.6)		#B	(10.0)
Operating Income				49.5		36.0				85.5		164.5		(79.0)			85.5
Interest Income (Expense)				0.8		(2.4)		#C		(1.6)		-		(0.8)		#C	(0.8)
Other Income (Expense)				(0.3)		-				(0.3)		(0.3)		-			(0.3)
Income from Continuing Operations before Tax				50.0		33.6				83.6		164.2		(79.8)			84.4
Income Tax (Expense)				(17.5)		(5.7)		#D		(23.2)		(23.5)		1.4		#D	(22.1)
Income from Continuing Operations				32.5		27.9				60.4		140.7		(78.4)			62.3
Less: Non Controlling Interest				0.2		-				0.2		0.1		-			0.1
Income from Continuing Operations - ITT Inc.				32.3		27.9				60.2		140.6		(78.4)			62.2
EPS from Continuing Operations				0.36		0.31				0.67		1.56		(0.87)			0.69		(0.02)		(2.9%)

Note: Amounts may not calculate due to rounding.

#A - 2016 includes restructuring and realignment costs ($14.8M); acquisition related costs ($1.3M) and impairment of trade name ($4.1M).

#A - 2015 includes restructuring and realignment costs ($6.8M), Hartzell backlog amortization ($0.5M), and a reversal of prior year contract loss ($1.7M).

#B - 2016 includes restructuring and realignment costs of ($0.8M); asbestos related costs ($15.0M).

#B - 2015 includes repositioning and restructuring costs ($0.2M) and asbestos related income of ($84.8M).

Note: ($84.8M) net asbestos related income includes ($100.7M) for defense strategy benefit and ($15.9M) asbestos related expense.

#C - Interest income for a change in uncertain tax position for both 2016 & 2015.

#D - 2016 includes various tax-related special items, including tax expense on distribution of foreign earnings ($1.4M), valuation allowance changes ($1.5M), and tax rate change in Italy ($2.2M), and a tax benefit on uncertain tax positions ($1.7M), in addition to the tax impact of other operating special items.

#D - 2015 includes various tax-related special items including changes in tax on undistributed foreign earnings ($18.7M), uncertain tax positions ($4.0M), in addition to the tax impact of other operating special items.

ITT Inc. Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Adjusted Free Cash Flow Conversion
Second Quarter 2016 & 2015
(In Millions)
					6M 2016				6M 2015
Net Cash - Operating Activities					71.6				89.5
Capital Expenditures					46.1				46.0
Free Cash Flow					25.5				43.5
Realignment Related Cash Payments, including Capex					2.2				2.6
Restructuring Cash Payments					15.5				13.1
Asbestos Cash Payments, net					11.5				6.5
Adjusted Free Cash Flow					54.7				65.7
Income from Continuing Operations - ITT Inc.					70.0				179.3
Special Items					43.5				(57.2)
Income from Continuing Operations - ITT Inc., Excluding
Special Items					113.5				122.1
Adjusted Free Cash Flow Conversion					48.2%				53.8%

ITT Inc. Non-GAAP Reconciliation
GAAP vs. Adjusted EPS Guidance
Full Year 2016
				2016 Full-Year Guidance
				Low					High
EPS from Continuing Operations - GAAP				$	1.40				$	1.62
Estimated Asbestos Costs to Maintain 10-Year Accrual, Net of Tax					0.45					0.42
				$	1.85				$	2.04
Estimated Restructuring, Realignment and Other Costs, Net of Tax					0.48					0.41
Acquisition Related Costs, Net of Tax					0.05					0.05
Other Special Tax Items					(0.04	)				(0.04	)
EPS from Continuing Operations - Adjusted				$	2.34				$	2.46

View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005390/en/

Source: Business Wire
(August 4, 2016 - 6:45 AM EDT)

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