Short answer
Itt Inc (ITT) filed its fiscal 2014 10-K annual report with the SEC on Feb 20, 2015.
- Top risk flagged: Asbestos litigation: Goulds Pumps faces ongoing and future claims, with liabilities estimated only through the next 10 years
Itt Inc FY2014 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Diversified manufacturer of engineered components and customized technology solutions for energy, transportation and industrial markets
- Four segments emphasized: Industrial Process, Motion Technologies, Interconnect Solutions and Control Technologies
- 2014 revenue $2,654.6 million, up from $2,496.9 million in 2013
- Global recurring-revenue model: 30% aftermarket, 35% long-lived customer platforms, 65% sales outside U.S.
- Portfolio positioned around energy efficiency, resource scarcity, urbanization and emerging-market growth trends
Management Discussion & Analysis
- Revenue $2,654.6, up $157.7 or 6.3% YoY, with organic growth 6.9%
- Consolidated operating margin 10.0% vs 7.4%, gross margin 32.6% vs 32.0%
- Best segment: Industrial Process revenue $1,208.3, up 9.1%; worst: Interconnect Solutions revenue $392.8, down 0.7%
- Operating cash flow $244.7, capex $114.5, dividends $40.7, buybacks $50.0
- 2015 risks: oil-price declines affecting approximately 20% of revenue, Venezuela and Russia instability, currency fluctuations, emerging-market deceleration
Risk Factors
- Asbestos litigation: Goulds Pumps faces ongoing and future claims, with liabilities estimated only through the next 10 years
- International exposure: 65% of 2014 sales came from customers outside the United States, including politically unstable emerging markets
- Supply chain vulnerability: Single-source suppliers for some castings, motors and other critical components could disrupt deliveries
- Regulatory risk: Foreign Corrupt Practices Act, U.K. Bribery Act and OFAC violations could trigger fines, criminal penalties and operating curtailments
- Customer concentration: One automaker customer represented a significant portion of total revenue and Motion Technologies revenue
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