ITT Corporation Business Report FY ended Dec. 2014

Financial Overview

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Overall
Sales	2,654.6	2,496.9	6.3	-
Operating profit	266.4	183.6	45.1	-
Motion Technologies
Sales	769.4	721.8	6.6	1)

Factor
1) Motion Technologies
-Sales for FY ended Dec. 31, 2014 increased by 6.6% year-on-year driven by strength in both OEM and aftermarket. Within the 6.6%, growth of Friction Technologies was 5% and that of KONI (shock absorbers and dampers) was 19% owing to strong growth in North American automotive market.

R&D Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	76.6	67.3	62.7
% of sales	2.9	2.7	2.8

R&D Facilities

-The Company has R&D centers in Italy, China, India and so on.

-In January 2014, the Company announced additional investment in Motion Technologies' R&D center in Wuxi, Jiangsu Province, China. The R&D center started construction in 2012. The facility is focused on driving development of friction materials suited to performance requirements specific of the Chinese market.

Technology Licensing-out Agreement

-The Company announced that its KONI brand has signed a technology license agreement with Gabriel India Ltd., an Indian auto parts supplier. The agreement will allow the companies to better serve the suspension needs of the Indian commercial vehicle, bus and industrial equipment markets. As part of the agreement, KONI will provide technology that will allow Gabriel to manufacture damper products for the original equipment and aftermarkets in India as well as Bangladesh, Sri Lanka, Nepal and Bhutan. The agreement includes the areas of design, development and manufacture of high-end shock absorbers. (From a press release on November 18, 2014)

Product Development

Copper-free brake pads for commercial vehicles
-Motion Technologies tackled new regulatory challenges concerning the use of copper and became the first friction manufacturer to provide copper-free brake pads for commercial vehicle applications. (As of Dec. 2013)

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	118.8	122.9	83.8
-Motion Technologies	49.2	31.7	27.1

Investment Outside USA

-In January 2014, the Company announced that it is investing approximately USD 20 million to expand its braking technology production and R&D capabilities in Wuxi, Jiangsu Province, China, bringing its total investment in the facility to nearly USD 30 million over the past two years. The investment in the Company's Motion Technologies business is part of the Company's long-term commitment to growth in the region and follows approximately USD 10 million announced in early 2012. (From a press release on January 16, 2014)

Data

Sales by Segment

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Industrial Process	1,208.3	1,107.4	955.8
Motion Technologies	769.4	721.8	626.2
Interconnect Solutions	392.8	395.5	375.7
Control Technologies	290.5	278.2	277.1
Eliminations	(6.4)	(6.0)	(7.0)
Total	2,654.6	2,496.9	2,227.8

Sales by Geographic Area

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
USA	927.0	896.2	869.3
Germany	303.3	266.7	200.5
Other developed markets	588.3	583.4	519.3
Emerging markets	836.0	750.6	638.7
-South and Central America (includes Mexico)	239.4	200.2	198.3
-Eastern Europe and Russia	125.9	124.3	103.1
-Middle East and Africa	162.7	144.1	114.3
-China and Hong Kong	184.7	140.5	113.6
-Other emerging growth markets	123.3	141.5	109.4
Total	2,654.6	2,496.9	2,227.8