PLAINS, N.Y., October 5, 2011 — ITT Corporation (NYSE: ITT) today announced
that its board of directors has approved the distribution to its shareholders
of all the outstanding shares of Exelis Inc., its Defense and Information
Solutions business, which will also be known as ITT Exelis, and Xylem Inc., its
Water Technology and Services business, which will result in three distinct,
publicly traded companies. Each ITT
shareholder of record as of the close of business on October 17, 2011, the
record date for the distribution, will receive on the distribution date one
share of ITT Exelis common stock and one share of Xylem common stock for each
share of ITT common stock held as of the record date. The ITT Board also approved a 1:2 reverse stock split for
ITT, which will become effective after market close on October 31, 2011, the
distribution date for the spinoffs.
Loranger, chairman, president and chief executive officer of ITT said, “By
operating as three independent companies, we believe the new ITT, Xylem and ITT
Exelis will each be able to leverage our shared history of innovation while
being better positioned to capitalize on new opportunities in their respective
markets. We believe this
transaction will allow all three companies to drive growth and deliver significant
value to all of our shareholders.
I would like to thank our dedicated employees who have worked hard to
make this important transaction a reality. We look forward to completing the final steps in this
process and embarking on new and exciting chapters for the new ITT, Xylem and ITT
also announced that it has received a private letter ruling from the Internal
Revenue Service that ITT’s separation of the assets and liabilities
constituting each of the ITT Exelis business, the Xylem business and the new
ITT business, as well as the planned distribution of the shares of ITT Exelis
and Xylem common stock to ITT shareholders, will qualify as a tax-free
transaction for U.S. federal income tax purposes.
three companies plan to webcast investor events on October 13, 2011 and October
14, 2011. Additional details on these
webcasts will be provided in a separate announcement.
Exelis and Xylem Common Stock Distributions
ITT board of directors has approved the distribution of all of the issued and
outstanding shares of ITT Exelis and Xylem common stock on October 31, 2011 (the
“distribution date”) to ITT shareholders of record as of the close of business
on October 17, 2011 (the “record date”). In connection with this distribution, each ITT shareholder
will receive one common share of ITT Exelis and one common share of Xylem for each
share of common stock of ITT held at the close of business on the record
date. Upon such distribution, ITT
shareholders will own 100% of the common shares of ITT Exelis and Xylem.
currently has approximately 185 million shares outstanding. Based on the one-for-one distribution
ratio for each spinoff, approximately 185 million shares of ITT Exelis common
stock and approximately 185 million shares of Xylem common stock will be
distributed to ITT shareholders.
Stock Split of ITT Shares
ITT board of directors also approved a 1:2 reverse stock split for the new ITT,
which will become effective following the market close on October 31, 2011, the
distribution date. Under the
reverse stock split, every two common shares of ITT will be converted into one common
share of ITT. As a result, ITT will
have approximately 92.5 million common shares outstanding after the reverse
stock split. No action is required
by ITT shareholders in connection with the reverse stock split. No fractional shares of ITT common stock
will be distributed to ITT’s shareholders in connection with the reverse stock
split. Instead, ITT’s transfer
agent will aggregate all fractional shares and sell them as soon as practicable
after the reverse stock split at the then-prevailing prices on the open market.
After the transfer agent’s
completion of such sale, such shareholders will receive a cash payment in an
amount equal to their respective pro rata shares of the total net proceeds of
that sale. Receipt of cash instead
of fractional shares will not be tax free.
of ITT, Xylem and ITT Exelis Shares
the spinoffs, all three companies will be listed on the New York Stock
Exchange. ITT shares will continue
to trade on the NYSE under the ticker symbol "ITT." ITT Exelis shares will trade under the
symbol “XLS,” while Xylem shares will trade under the symbol “XYL.” ITT expects that on or about October 13,
2011, shares of ITT Exelis and Xylem will trade on a “when issued” basis and
that “when distributed” trading in ITT shares will commence alongside “regular way”
trading for ITT shares. ITT Exelis
and Xylem will begin “regular way” trading on November 1, 2011, at which time
“regular way” trading in ITT shares will reflect both the distribution of the ITT
Exelis and Xylem shares and the reverse stock split.
shareholders who sell their shares of ITT common stock in the “regular way”
market prior to or on the distribution date will also be selling their right to
receive the distribution of shares of ITT Exelis common stock and Xylem common
stock. Shareholders are encouraged
to consult with their financial advisors regarding the specific implications of
selling ITT common stock.
action is required by ITT shareholders to receive their ITT Exelis or Xylem
common shares. ITT shareholders
who hold ITT common shares as of the record date will receive a book-entry
account statement reflecting their ownership of ITT Exelis and Xylem common
shares or their brokerage account will be credited for the shares.
to the distribution date, ITT will mail information statements to all
shareholders of ITT common stock as of the record date. The statements will include information
regarding the procedures by which the distribution will be effected and other
details of the transaction. The
information statements will be available on the Securities and Exchange
Commission’s ("SEC") website at www.sec.gov and on the ITT
transformation website at www.itt.com/transformation.
distribution agent, transfer agent, and registrar for ITT common stock will be Bank
of New York Mellon. For questions
relating to the transfer or mechanics of the stock distribution or the reverse stock
split, shareholders may contact BNY Mellon Shareowner Services c/o ITT
Corporation at P.O. Box 358015, Pittsburgh, PA 15252-8015, or via phone at 1-800-254-2823. If shares are held by a bank, broker or
other nominee, shareholders should contact that institution directly.
completion of the distribution is subject to the satisfaction or waiver of a
number of conditions, including the Registration Statements on Form 10 for the ITT
Exelis and Xylem common stock being declared effective by the SEC and certain
other conditions described in the information statements included in the ITT Exelis
and Xylem Form 10 Registration Statements and in the agreements filed as
exhibits to the Form 10 Registration Statements. The condition relating to the
authorization of the ITT Exelis and Xylem common stock for listing on the NYSE
has been satisfied, and each of ITT Exelis and Xylem has sent a letter to the
SEC requesting that the Form 10 Registration Statements be declared effective. ITT, Xylem and ITT Exelis expect all
other conditions to the distribution to be satisfied on or before the
ITT board of directors today also declared a quarterly dividend for the fourth
quarter, after giving effect to the reverse stock split, of 9.1 cents per share
to shareholders of record on November 11, 2011 (equivalent to 4.55 cents per share
on a pre-reverse stock split basis).
The ITT cash dividend will be payable December 31, 2011. ITT expects that, after the spinoffs, ITT
Exelis will declare a fourth-quarter dividend of 10.33 cents per share and that
Xylem will declare a fourth-quarter dividend of 10.12 cents per share, so that
the aggregate fourth-quarter dividend for the three companies combined will
equal ITT’s prior quarterly dividend rate of 25 cents per share. Thereafter, the respective boards of
directors of ITT, Xylem and ITT Exelis will determine the dividend policy of
ITT Board of Directors
company also announced today that the board of directors that will
lead ITT following the completion of the spinoffs on October 31, 2011, will
consist of the following directors:
- Frank T. MacInnis,
chairman of the ITT board, former chief executive officer, EMCOR Group,
Inc., and an ITT director since 2001.
- G. Peter D’Aloia, former
senior vice president and chief financial officer, American Standard
Companies, Inc., who will become an ITT director effective upon completion
of the spinoffs.
- Donald DeFosset, Jr.,
former chairman, James Hardie Industries N.V., who will become an ITT
director effective upon completion of the spinoffs.
- Christina A. Gold,
former chief executive officer, The Western Union Company, and an ITT
director since 1997.
- Paul J. Kern, senior
counselor of The Cohen Group, and an ITT director since 2008.
- Denise L. Ramos, who
will become ITT’s chief executive officer and president effective upon the
completion of the spinoffs and who is currently ITT’s chief financial
- Linda S. Sanford, senior
vice president, Enterprise Transformation, IBM, and an ITT director since
- Markos I. Tambakeras,
former chairman, president and chief executive officer, Kennametal, Inc.,
and an ITT director since 2001.
information on each of the above board members may be found at
members for ITT Exelis and Xylem will include the individuals listed in each
company’s information statement filed with the SEC, as well as additional board
members to be announced shortly.
Company Logos and Taglines Chosen
also announced that the branding of the two spinoff companies is complete.
and taglines that ITT Exelis and Xylem will use following completion of the
spinoff transaction, as well as other information on the new companies, can be
found at www.itt.com/transformation.
and Cautionary Statements
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, statements about the separation of ITT Corporation
(the “Company”) into three independent publicly-traded companies (the
“companies”), the terms and the effect of the separation, the nature and impact
of such a separation, capitalization of the companies, future strategic plans
and other statements that describe the companies’ 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: economic,
political and social conditions in the countries in which we conduct our
businesses; changes in U.S. or International government defense budgets;
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 or to refinance our existing indebtedness 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; uncertainties with
respect to our estimation of asbestos liability exposures, third-party
recoveries and net cash flow; our ability to effect restructuring and cost
reduction programs and realize savings from such actions; government
regulations and compliance therewith, including Dodd-Frank legislation; changes
in technology; intellectual property matters; governmental investigations;
potential future employee benefit plan contributions and other employment and
pension matters; contingencies related to actual or alleged environmental contamination,
claims and concerns; 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, 2010 and our other filings with the Securities and Exchange
Commission. In addition, there are
risks and uncertainties relating to the spinoffs of ITT Exelis and Xylem,
including the timing and certainty of the completion of those transactions, whether
those transactions will result in any tax liability, the operational and
financial profile of ITT or any of its businesses after giving effect to the
spinoff transactions, and the ability of each business to operate as an