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What changed in ITT INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ITT INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+288 added−301 removedSource: 10-K (2024-02-12) vs 10-K (2023-02-15)

Top changes in ITT INC.'s 2023 10-K

288 paragraphs added · 301 removed · 223 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+8 added−11 removed58 unchanged
Biggest changeRevenue impacts from the limited seasonal variations are typically mitigated by our backlog of orders that allows us to adjust levels of production across different periods. 9 General Developments of the Business Acquisitions Date of Acquisition Segment Business Acquired Description April 4, 2022 IP Habonim Industrial Valves and Actuators Ltd (Habonim) Designer and manufacturer of valves, valve automation and actuation for the gas distribution (including liquified natural gas), biotech and harsh application service sectors Other than as described herein, there have been no significant developments since our previous Form 10-K filing.
Biggest changeRevenue impacts from the limited seasonal variations are typically mitigated by our backlog of orders that allows us to adjust levels of production across different periods. 9 General Developments of the Business Acquisitions and Divestitures Date of Transaction Type Segment Business Acquired Description May 2, 2023 Acquisition CCT Micro-Mode Products, Inc.
Diversity, equity and inclusion (DEI) are key business priorities for ITT and core to our values as a company.
Diversity, Equity and Inclusion Diversity, equity and inclusion (DEI) are key business priorities for ITT and core to our values as a company.
Motion Technologies (MT) The Motion Technologies segment is a manufacturer of brake pads, shims, shock absorbers, energy absorption components and sealing technologies primarily for the transportation industry, including passenger cars and trucks, light- and heavy-duty commercial and military vehicles, buses and trains. MT consists of the following primary business units: ITT Friction Technologies, Wolverine Advanced Materials, and KONI & Axtone.
Motion Technologies (MT) The Motion Technologies segment is a manufacturer of brake pads, shims, shock absorbers, energy absorption components and sealing technologies primarily for the transportation industry, including passenger cars and trucks, light- and heavy-duty commercial and military vehicles, buses and trains. MT consists of the following primary business units: ITT Friction Technologies, Wolverine Advanced Materials, KONI, and Axtone.
Friction anticipated the industry transition towards copper-free brake pads and is a recognized industry leader in the paradigm shift towards new brake pad formulations that are designed, developed and tested specifically for electric vehicles (EV). Success in developing brake pads for EVs has led Friction to win multiple EV platform awards with established and new OEMs.
Friction anticipated the industry transition towards copper-free brake pads and is a recognized industry leader in the paradigm shift towards new brake pad formulations that are designed, developed and tested specifically for electric vehicles (EVs). Success in developing brake pads for EVs has led Friction to win multiple EV platform awards with established and new OEMs.
KONI & Axtone are lifetime partners of rail customers, also offering repair and overhauling capabilities for their products. Car and Racing features performance shock absorbers often using our Frequency Selective Damping (FSD) technology. FSD products generally are used by car and racing enthusiasts who desire to modify their cars for increased handling performance and comfort.
KONI and Axtone are lifetime partners of rail customers, also offering repair and overhauling capabilities for their products. Car and Racing features performance shock absorbers often using our Frequency Selective Damping (FSD) technology. FSD products generally are used by car and racing enthusiasts who desire to modify their cars for increased handling performance and comfort.
In limited circumstances, we may have to obtain scarce components for higher prices on the spot market, which may have a negative impact on our results. We also acquire certain inventory in anticipation of supply constraints or enter into longer-term pricing commitments with vendors to improve the priority, price and availability of supply.
In limited circumstances, we may have to obtain scarce components for higher prices on the spot market, which may 8 have a negative impact on our results. We also acquire certain inventory in anticipation of supply constraints or enter into longer-term pricing commitments with vendors to improve the priority, price and availability of supply.
IP's marketplace-recognized brands include Goulds Pumps ® , Bornemann ® , Rheinhütte Pumpen, Engineered Valves ® , PRO Services ® , C'treat ® , i-ALERT ® and Habonim. Industrial Pumps Industrial pumps are used by a wide array of customers and applications primarily in the chemical, energy, mining, general industrial, pharmaceutical and power generation markets.
IP's marketplace-recognized brands include Goulds Pumps TM , Bornemann ® , Rheinhütte Pumpen ® , Engineered Valves ® , PRO Services ® , C'treat ® , i-ALERT ® and Habonim TM . Industrial Pumps Industrial pumps are used by a wide array of customers and applications primarily in the chemical, energy, mining, general industrial, pharmaceutical and power generation markets.
Control products for the aerospace and defense markets include actuators, valves, pumps and switches for flow control applications, rate controls, seat recline locks and elastomer isolators for aircraft interiors, elastomeric bearings for rotorcraft vibration isolation, heaters, hoses, and composite ducting for environmental control systems, 7 and advanced composites for engine applications. Brands include Aerospace Controls, Enidine ® and Matrix Composites.
Control products for the aerospace and defense markets include actuators, valves, pumps and switches for flow control applications, rate controls, seat recline locks and elastomer isolators for aircraft interiors, elastomeric 7 bearings for rotorcraft vibration isolation, heaters, hoses, and composite ducting for environmental control systems, and advanced composites for engine applications. Brands include Aerospace Controls ® and Enidine ® .
Control products for the industrial markets include shock absorbers, wire ropes and actuators for factory and warehouse automation, regulators and switches for process control applications, seismic isolators and large bore shocks for protection of critical infrastructure, and regulators for natural gas vehicles. Brands include Enidine ® , Compact Automation ® , Turn-Act ® , Neo-Dyn ® and Conoflow ® .
Control products for the industrial markets include shock absorbers, wire ropes and actuators for factory and warehouse automation, regulators and switches for process control applications, seismic isolators and large bore shocks for protection of critical infrastructure, and regulators for natural gas vehicles. Brands include Enidine ® , Compact Automation TM , Turn-Act ® , Neo-Dyn ® and Conoflow ® .
Wolverine sells its products, which consist primarily of brake shims and gaskets, to Tier-2 brake pad suppliers (including Friction Technologies) and to Tier-1 manufacturers. Brake shims are thin metal and rubber adhesive dampeners that fit onto the brake pad and against the brake caliper to prevent excessive noise and vibration.
Wolverine sells its products, which consist primarily of brake shims and gaskets, to Tier-2 brake pad suppliers (including Friction) and to Tier-1 manufacturers. Brake shims are thin metal and rubber adhesive dampeners that fit onto the brake pad and against the brake caliper to prevent excessive noise and vibration.
We are committed to fostering an inclusive culture that is fueled by diverse ideas and perspectives, and to leveraging these 3 differences in ways that positively impact our performance, the engagement of our people and the global communities in which we operate.
We are committed to fostering an inclusive culture that is fueled by diverse ideas and perspectives, and to leveraging these differences in ways that positively impact our performance, the engagement of our people and the global communities in which we operate.
In addition to base salaries, we offer numerous benefits for eligible employees, including annual bonuses, stock awards, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, flexible work schedules, retirement benefits, employee assistance programs and tuition reimbursement.
In addition to base salaries, we offer numerous benefits for eligible employees, including annual bonuses, stock awards, an employee stock purchase plan, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, flexible work schedules, retirement benefits, employee assistance programs and tuition reimbursement.
We partner with our customers to solve challenging problems and deliver best-in-class solutions. ITT's products enable our customers to operate more efficiently, reduce their total cost of ownership and produce sustainable, environmentally impactful technologies. At the same time, it is a business imperative for us to ensure our operations are efficient, sustainable and environmentally conscious.
We partner with our customers to solve challenging problems and deliver best-in-class solutions. ITT's products enable our customers to operate more efficiently, reduce their total cost of ownership and produce sustainable, environmentally friendly technologies and processes. At the same time, it is a business imperative for us to ensure our operations are efficient, sustainable and environmentally conscious.
Given this, one of our most important commitments as a company is to create an engaging, inspiring place to work and drive actions that enable every individual's full potential and performance. Refer to the " Human Capital Manag ement " section below for further information. Governance Our Board of Directors (the “Board”) is composed of highly experienced and diverse individuals.
Given this, one of our most important commitments as a company is to create an engaging, inspiring place to work and drive actions that enable every individual's full potential and performance. Refer to the " Human Capital Management " section below for further information. Governance Our Board of Directors (the “Board”) is composed of highly experienced and diverse individuals.
Our development planning tools and processes ensure targeted, concrete action planning, and we promote continuous feedback and regular check-ins. Compensation and Benefit s We provide flexible compensation and benefits programs to help meet the needs of our employees.
Our development planning tools and processes ensure targeted, concrete action planning, and we promote continuous feedback and regular check-ins. Compensation and Benefit s We provide flexible compensation and benefits programs to help meet the needs of our employees and their families.
It also includes driving practices and programs to build and support diverse representation in our employee population, including diversity with regard to race, religion, gender, disability, nationality, age, sexual orientation, ethnic background and more. We firmly believe we will create more success by continuously learning from each other's ideas, opinions and experiences.
It also includes driving practices and programs to build and support diverse representation in our employee population, including diversity with regard to race, religion, gender, disability, nationality, age, sexual orientation, ethnic background and more. We firmly believe we will create more success by fostering diversity of thought and continuously learning from each other's ideas, opinions and experiences.
Our portfolio of valve products includes knife-gate valves, ball valves and hygienic and industrial diaphragm valves, marketed under the brand names EnviZion ® , Cam-Line ® , Cam-Tite ® , Dia-Flo ® , Fabri-Valve ® , Pure-Flo ® , Skotch ® , and Habonim.
Our portfolio of valve products includes knife-gate valves, ball valves, hygienic and industrial diaphragm valves, and valve actuators, marketed under the brand names EnviZion ® , Cam-Line TM , Cam-Tite ® , Dia-Flo ® , Fabri-Valve ® , Pure-Flo ® , Skotch ® , and Habonim TM .
We will post our 2022 EEO-1 report to this website when it becomes available. Health, Safety and Well-being At ITT, the health, safety, and well-being of our employees is our number one priority.
We will post our 2023 EEO-1 report to this website when it becomes available. Health, Safety and Well-being At ITT, the health, safety, and well-being of our employees is our number one priority.
We evaluate hedging opportunities to mitigate or minimize the risk of margin erosion resulting from the volatility of commodity prices. The challenges associated with supply chain disruptions, inflation and tariffs are expected to continue in 2023, and we are unable to reasonably predict when they will be resolved.
We evaluate hedging opportunities to mitigate or minimize the risk of margin erosion resulting from the volatility of commodity prices. The challenges associated with supply chain disruptions and inflation are expected to continue in 2024, and we are unable to reasonably predict when they will be resolved.
We manufacture components that are integral to the operation of equipment, systems and manufacturing processes in these key markets. Our products provide enabling functionality for applications where reliability and performance are critically important to our customers and the users of their products.
We manufacture components that are integral to the operation of equipment, systems and manufacturing processes in these key markets. Our products enable functionality for applications where reliability and performance are critically important to our customers and the users of their products.
KONI & Axtone The KONI & Axtone business services four main end markets: railway rolling stock for freight and passenger trains; car and racing; bus, truck and trailer; and defense. Railway provides a wide range of equipment for passenger rail, locomotives, freight cars, high speed trains and light rail.
KONI and Axtone The KONI and Axtone businesses service four main end markets: railway rolling stock for freight and passenger trains; car and racing; bus, truck and trailer; and defense. Railway provides a wide range of equipment for passenger rail, locomotives, freight cars, high speed trains and light rail.
We operate through three primary segments: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). 2022 COMPANY SNAPSHOT • $3.0 billion of sales across approx. 125 countries • Approx. 10,300 employees in 38 countries • Global presence with 67% of revenue outside the U.S. • Balanced and diversified portfolio MT is a global manufacturer of highly engineered and durable brake pads, shock absorbers and damping technologies for the automotive and rail markets.
We operate through three primary segments: Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). 2023 COMPANY SNAPSHOT • $3.3 billion of sales across approx. 125 countries • Approx. 10,600 employees in 37 countries • Global presence with 67% of revenue outside the U.S. • Balanced and diversified portfolio MT is a global manufacturer of highly engineered and durable brake pads, shock absorbers and damping technologies for the automotive and rail markets.
We also believe that by creating a diverse environment, we will sustain and propel our success in the global marketplace to create long-term sustainable value for all our stakeholders. For additional information about actions to drive our DEI strategy along with our diversity goals please refer to our 2022 Sustainability Report.
We also believe that by creating a diverse environment, we will sustain and propel our success in the global marketplace to create long-term sustainable value for all our stakeholders. For additional information about the actions we are taking to drive our DEI strategy along with our diversity goals please refer to our 2023 Sustainability Update.
For additional information regarding environmental matters, see " Critical Accounting Estimates " within Item 7, Management's Discussion and Analysis , and Note 20, Commitments and Contingencies , to the Consolidated Financial Statements. Social We recognize that sustainable performance and growth are made possible only through the efforts of our dynamic, diverse team of over 10,000 ITTers.
For additional information regarding environmental matters, see " Critical Accounting Estimates " within Item 7, Management's Discussion and Analysis , and Note 19, Commitments and Contingencies , to the Consolidated Financial Statements. Social We recognize that sustainable performance and growth are made possible only through the efforts of our dynamic, diverse team of approximately 10,600 ITTers globally.
CCT products are sold directly and indirectly through numerous channels, including distributors. CCT has long-lasting relationships with distributors, as many have been selling certain CCT products for decades. Sales to distributors represented approximately one-third of CCT's 2022 revenue.
CCT products are sold directly and indirectly through numerous channels, including distributors. CCT has long-lasting relationships with distributors, as many have been selling certain CCT products for decades. Sales to distributors represented approximately 30% of CCT's 2023 revenue.
OE brake pads are sold directly to OEMs or to Tier-1 brake manufacturers. Our OE brake pads are designed to meet customer specifications and environmental regulations, and to satisfy an array of performance standards across multiple geographies. Most automotive OEM platforms (car models) require specific brake pad formulations and have demanding quality, delivery and volume schedules.
Our OE brake pads are designed to meet customer specifications and environmental regulations, and to satisfy an array of performance standards across multiple geographies. Most automotive OEM platforms (car models) require specific brake pad formulations and have demanding quality, delivery and volume schedules.
Our 2019 Sustainability Report and our 2020 and 2021 annual supplements, all of which can be found on our website at www.itt.com/sustainability, also provide information and the history of our DEI journey. In addition, to provide additional transparency regarding our commitment to diversity, our most recent EEO-1 report is available on our website at www.itt.com/our-people/eeo-1-report.
Our 2022 Sustainability Report and our 2021 Sustainability Supplement, both of which can be found on our website at www.itt.com/sustainability, also provide information and the history of our DEI journey. In addition, to provide additional transparency regarding our commitment to diversity, our most recent Employment Information Report (EEO-1 report) is available on our website at www.itt.com/our-people/eeo-1-report.
Our approach to environmental stewardship falls into three categories: ▪ Development of innovative products that help customers reduce their emissions and achieve their sustainability goals; ▪ Investment in technologies to reduce CO 2 emissions, waste sent to landfills and water usage; ▪ Development of a credible path to carbon neutrality through our Reduce–Avoid–Offset framework, in which we seek to reduce our carbon footprint and commit to renewable energy.
Our approach to environmental stewardship falls into three categories: ▪ Development of innovative products that help customers reduce their greenhouse gas (GHG) emissions, achieve their sustainability goals and comply with emissions reduction regulations; ▪ Investment in technologies to reduce CO 2 emissions, waste sent to landfills and water usage and increase our energy supply security through solar installations; and ▪ Development of a credible path to carbon neutrality through our Reduce–Avoid–Offset framework, in which we seek to reduce our carbon footprint and commit to using renewable energy sources.
Environmental We recognize climate change is a global crisis and we are committed to doing our part to reduce environmental impacts.
Environmental We recognize climate change is a global crisis and we are committed to doing our part to reduce the environmental impact of our operations.
In certain harsh environment markets, our connector products are considered market leaders because of our technological capabilities, cost performance and global footprint. Products for the commercial aerospace and defense markets include industry standards-based connectors and late-stage customized solutions.
These brands are known for high-performance, high-reliability solutions which withstand high temperatures and pressure and are resistant to corrosive environments. In certain harsh environment markets, our connector products are considered market leaders because of our technological capabilities, cost performance and global footprint. Products for the commercial aerospace and defense markets include industry standards-based connectors and late-stage customized solutions.
ITT Friction Technologies (Friction) Friction manufactures a range of brake pads installed as original equipment (OE) on passenger cars (both internal combustion engine vehicles and electric vehicles) and light commercial vehicles. Demand for our products stems from a variety of end customers and automotive platforms around the world.
ITT Friction Technologies (Friction) Friction manufactures a range of brake pads installed as original equipment (OE) on passenger cars (both internal combustion engine vehicles and electric vehicles) and light commercial vehicles for a variety of end customers and automotive platforms around the world. OE brake pads are sold directly to OEMs or to Tier-1 brake manufacturers.
KONI aftermarket car shock absorbers are sold around the world, directly to customers and through a distribution network that markets KONI products into specific geographies or customer groups.
KONI aftermarket car shock absorbers are sold around the world, 5 directly to customers and through a distribution network that markets KONI products into specific geographies or customer groups. KONI shock absorbers are also incorporated into new OEM platform designs and sold to Tier-1 shock absorber manufacturers.
Automaker requests to use ITT brake pads in their Continental-produced braking systems (calipers) typically account for approximately half of MT's revenue from Continental. These automaker requests are generally formalized through supply agreements signed directly between MT and the automakers. The remainder of MT's sales to Continental is through a long-term agreement to supply Continental with aftermarket parts.
MT's sales to Continental, a supplier to the automotive industry and MT's largest customer, represented 16% of MT's 2023 revenue. Automaker requests to use ITT brake pads in their Continental-produced braking systems (calipers) typically account for approximately half of MT's revenue from Continental. These automaker requests are generally formalized through supply agreements signed directly between MT and the automakers.
IP • Goulds Pumps ® • Bornemann ® • Engineered Valves ® • PRO Services ® • C'treat ® • i-ALERT ® • Rheinhütte Pumpen • Habonim CCT • Cannon ® • VEAM ® • BIW Connector Systems ® • Aerospace Controls • Enidine ® • Compact Automation ® • Neo-Dyn ® Process Controls • Conoflow ® • Matrix Composites Environmental, Social & Governance Environmental, social & governance (ESG) practices play an essential role in our business and operating strategies and are firmly rooted in how we do business and in our daily decisions.
OUR KEY BRANDS MT • ITT Friction Technologies TM • KONI ® • Wolverine Advanced Materials ® • Axtone ® • Novitek TM • GALT. ® IP • Goulds Pumps TM • Bornemann ® • Engineered Valves ® • PRO Services ® • C'treat ® • i-ALERT ® • Rheinhütte Pumpen ® • Habonim TM CCT • Cannon ® • VEAM ® • BIW Connector Systems ® • Aerospace Controls TM • Enidine ® • Compact Automation TM • Neo-Dyn ® Process Controls • Conoflow ® • Micro-Mode TM Environmental, Social & Governance Environmental, social & governance (ESG) practices play an essential role in our business and are firmly rooted in how we conduct our operations and in our daily decisions.
Brands include Cannon ® , VEAM ® , and BIW Connector Systems ® , which deliver solutions to enable the transfer of data, signals and power for various end-user markets including aerospace, defense, industrial, transportation, medical and energy. These brands are known for high-performance, high-reliability solutions which withstand high temperatures and pressure and are resistant to corrosive environments.
Brands include Cannon ® , VEAM ® , Micro-Mode TM , and BIW Connector Systems ® , which deliver solutions to enable the transfer of data, signals and power for various end-user markets including aerospace, defense, industrial, transportation, medical and energy.
In such cases, we report the accident, its root cause and any corrective measures taken in ITT’s company-wide accident reporting and tracking tool. Accident reporting and analysis helps ITT gauge the effectiveness of our safety initiatives and procedures across all sites. The COVID-19 pandemic has magnified the importance of keeping our employees safe and healthy.
In such cases, we report the accident, its root cause and any corrective measures taken in ITT’s company-wide accident reporting and tracking tool. Accident reporting and analysis helps ITT gauge the effectiveness of our safety initiatives and procedures across all sites, and it helps us find creative solutions to mitigate risks to our employees at our sites.
Other Information MT has a global manufacturing footprint with advanced automation capabilities, with production facilities in Europe, China, North America and India. MT competes in markets primarily served by large and well-established national and global companies.
Bus, Truck and Trailer, and Defense manufactures hydraulic and hydro-pneumatic shock absorbers for sale to both OEM and aftermarket customers. Other Information MT has a global manufacturing footprint with advanced automation capabilities, with production facilities in Europe, China, North America and India. MT competes in markets primarily served by large and well-established national and global companies.
We have well-established, long-term relationships with our OE and OES brake pad customers based on mutual trust, local proximity and a wide range of cooperative activities, ranging from design, to sampling, prototyping and testing phases of brake pads. MT is also a leading supplier of aftermarket brake pads within the highly fragmented global market.
We have well-established, long-term relationships with our OE and OES brake pad customers based on mutual trust, local proximity and a wide range of cooperative activities, ranging from design, to sampling, prototyping and testing phases of brake pads. MT is a global leader in rail suspension components, freight coupling devices currently used in Europe and crash absorption systems.
We typically acquire materials and components through a 8 combination of blanket and scheduled purchase orders to support our materials requirements for an average of four to eight weeks, with the exception of some specialty materials.
We have been able to mitigate the impact of this inflation via fixed-price supply contracts with suppliers, price increases to customers and productivity savings. We typically acquire materials and components through a combination of blanket and scheduled purchase orders to support our materials requirements for an average of four to eight weeks, with the exception of some specialty materials.
IP has a global manufacturing footprint with significant operations in the United States, South Korea, Saudi Arabia, Mexico and Germany. IP's customers operate in global infrastructure and natural resource markets such as energy, chemical and petrochemical, pharmaceutical, biopharmaceutical, general industrial, mining, pulp and paper, food and beverage, and power generation.
IP's customers operate in global infrastructure and natural resource markets such as energy, chemical and petrochemical, pharmaceutical, biopharmaceutical, general industrial, mining, pulp and paper, food and beverage, and power generation.
In 2022, decreased availability of raw materials and component parts adversely affected our ability to deliver products to our customers. Because of the rising demand for raw materials globally, we have experienced significant increases in prices and shipping costs, which impacted our financial results. See Item 7, Management's Discussion and Analysis for additional information.
Because of the rising demand for raw materials globally, we have experienced increases in prices, particularly in the first half of the year, which impacted our financial results. See Item 7, Management's Discussion and Analysis for additional information.
We are subject to stringent federal, state, local, and foreign environmental laws and regulations concerning air emissions, water discharges and waste disposal. In the U.S., these include, but are not limited to, the Federal Clean Air Act, the Clean Water Act, the Resource, Conservation and Recovery Act, and the Comprehensive Environmental 2 Response, Compensation and Liability Act.
In the U.S., these include, but are not limited to, the Federal Clean Air Act, the Clean Water Act, the Resource, Conservation and Recovery Act, and the Comprehensive Environmental Response, Compensation and Liability Act. We closely monitor our environmental responsibilities, together with trends in environmental laws.
Our products, manufacturing processes and innovations reflect our drive to contribute to global sustainability. We believe ingraining ESG priorities into our strategy will not only drive long-term growth and shareholder value, but it is also simply the right thing to do.
Our products, manufacturing processes and innovations reflect our drive to help make the world and the communities we serve more sustainable. We believe ingraining ESG priorities into our strategy will drive long-term growth and shareholder value and help our customers meet their ESG goals and, furthermore, is simply the right thing to do.
Also included within our portfolio is the Integrated Sensing Platform (ISP), which is a next-generation linear position sensing technology for EnviZion ® and Pure-Flo ® hygienic diaphragm valves, developed specifically for the toughest applications in the biopharmaceutical and sanitary industries.
Also included within our portfolio is the Integrated Sensing Platform (ISP), which is a next-generation linear position sensing technology for EnviZion ® and Pure-Flo ® hygienic diaphragm valves, developed specifically for the toughest applications in the biopharmaceutical and sanitary industries. 6 Aftermarket Our aftermarket solutions, which represented approximately 45% of IP's revenue in 2023, provide customers with replacement parts, services and plant optimization solutions that reduce total cost of ownership of pumps and rotating equipment.
In order to continue innovating in the industries we serve, ITT remains committed to attracting and retaining top talent. We strive to make ITT an inclusive and safe workplace for all, and to create a higher performance culture with opportunities and training for all employees to develop and grow professionally and personally.
We strive to make ITT an inclusive and safe workplace for all, and to create a higher performance culture with opportunities and training for all employees to develop and grow professionally and personally. In addition, we offer competitive compensation, benefits, and health and wellness programs.
In 2021, we developed our Reduce–Avoid–Offset framework through which we are pursuing our goal of reducing greenhouse gas emissions. The framework will drive the creation of our path to carbon neutrality and we expect to reduce our global Scope 1 and 2 emissions for all of ITT by 10% by the end of 2026, compared to 2021.
In 2021, we launched our Reduce–Avoid–Offset framework as part of our development of a credible plan to carbon neutrality. After developing the framework, we announced a goal of reducing our global Scope 1 and 2 GHG emissions for all of ITT by 10% by the end of 2026, compared to 2021.
The majority of our employees are eligible for either a performance-based bonus or a statutory profit-sharing payment. The bonus plans align employee compensation with financial or operational results and individual performance.
The majority of our employees are eligible for either a performance-based bonus or a statutory profit-sharing payment. The bonus plans align employee compensation with financial or operational results and individual performance. With respect to stock awards, we have used discretionary equity-based grants 4 with time-based vesting conditions to facilitate the retention of key personnel, particularly those identified as high-performing talent.
In addition, we work closely with our customers to address their needs by engineering solutions to fit their particular application, thus enabling our customers to achieve their specific goals.
In addition, we work closely with our customers to address their needs by engineering solutions to fit their particular application, thus enabling our customers to achieve their specific goals. For example, during 2023, we have been piloting new smart motor technologies that reduce energy and GHG emissions for flow machines in harsh industrial environments.
No one unionized facility in the U.S. accounted for more than 15% of ITT's total revenues. In addition, many of our global employees are covered by collective agreements or represented by works councils or other groups. We continually focus on building strong relationships with our employees.
In addition, many of our employees outside the U.S. are covered by collective agreements or represented 3 by works councils or other groups. We continually focus on building strong relationships with our employees. and we have not experienced any material strikes or work stoppages in the past several years.
To minimize our exposure, we have purchased insurance protection against certain environmental risks arising from our business activities.
Environmental laws and regulations are subject to change, and the nature and timing of such changes, if any, is difficult to predict. To minimize our exposure, we have purchased insurance protection against certain environmental risks arising from our business activities.
We continue to evaluate investments that will enable us to strategically and efficiently deploy capital, including close-to-core acquisitions that have unique and differentiated products, services and technologies. Effective capital deployment, including resource optimization and a disciplined focus on cash flow management, are a major part of how we plan to achieve our strategy and deliver strong shareholder returns.
Effective capital deployment, including resource optimization and a disciplined focus on cash flow management, are a major part of how we plan to achieve our strategy and deliver strong shareholder returns. Primary Businesses and Brands Our brands have a strong international presence across many emerging markets, including China, India, Mexico, Brazil and Saudi Arabia.
Industrial Process (IP) The Industrial Process segment is an OEM and an aftermarket parts and service provider of industrial pumps, valves, plant optimization and remote monitoring systems and services. IP's products serve an extensive base of customers ranging from large multi-national companies and engineering, procurement and construction (EPC) firms to regional distributors and various other end-users.
IP's products serve an extensive base of customers ranging from large multi-national companies and engineering, procurement and construction (EPC) firms to regional distributors and various other end-users. IP has a global manufacturing footprint with significant operations in the United States, South Korea, Saudi Arabia, Mexico and Germany.
During 2022, we experienced, and continue to experience, significant disruptions to our supply chain caused primarily by congested shipping ports around the world and the COVID-19 pandemic. These supply chain challenges have resulted in shortages of materials, including commodities such as steel, and other components that we use in our production processes.
These supply chain challenges have resulted in shortages of materials, including commodities such as steel, and other components that we use in our production processes. In 2023, decreased availability of raw materials and component parts adversely affected our ability to deliver products to our customers.
In addition, we offer competitive compensation, benefits, and health and wellness programs. As of December 31, 2022, we had approximately 10,300 employees located in 38 countries, including approximately 2,600 employees in the U.S. As of December 31, 2022, approximately 22% of our U.S. employees are represented by unions.
As of December 31, 2023, we had approximately 10,600 employees located in 37 countries, including approximately 2,850 employees in the U.S. As of December 31, 2023, approximately 20% of our U.S. employees are represented by unions. No one unionized facility in the U.S. accounted for more than 15% of ITT's total revenues.
For further information regarding our ESG commitment, refer to our ITT 2022 Sustainability Report (the "2022 Sustainability Report"), which is available on our website at www.itt.com/sustainability. Human Capital Management We believe that sustainable performance and growth are made possible only through the efforts of our dynamic diverse team of employees.
For further information regarding our ESG commitment, refer to our ITT 2023 Sustainability Update (the "2023 Sustainability Update"), which is a supplement to the full report we published in 2022 and outlines our progress towards our sustainability goals. It is available on our website at www.itt.com/sustainability.
We closely monitor our environmental responsibilities, together with trends in environmental laws. Separate from our Reduce–Avoid–Offset framework, we have established an internal program to assess compliance with applicable environmental requirements at our facilities.
Separate from our Reduce–Avoid–Offset framework, we have established an internal program to assess compliance with applicable environmental requirements at our facilities. The program, which includes periodic audits of many of our locations, including our major operating facilities, is designed to identify problems in a timely manner, correct potential deficiencies and maintain continued regulatory compliance.
Additionally, ITT’s diligent approach to remediation has resulted in a reduction in the number of ongoing environmental remediation matters by approximately 50% over the past seven years. Environmental laws and regulations are subject to change, and the nature and timing of such changes, if any, is difficult to predict.
ITT's environmental liabilities are, for the most part, not associated with current operating facilities (only two of ITT's 26 locations with current environmental obligations are associated with active operating sites). Additionally, ITT’s diligent approach to remediation has resulted in a reduction in the number of ongoing environmental remediation matters by approximately 50% over the past eight years.
See Note 23, Acquisitions and Investments , to the Consolidated Financial Statements for additional information. 10
SEGMENT INFORMATION See Note 3, Segment Information , to the Consolidated Financial Statements for financial information about each of our segments.
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We believe ITT has the opportunity to continue to expand geographically, enhance existing products and develop new products, improve our market position and increase earnings through organic growth and targeted acquisitions. We are expanding in international markets and investing in new products that leverage our deep engineering capabilities.
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When value-generating opportunities arise, we seek to expand into new markets and invest in new products that leverage our deep engineering capabilities. We continue to evaluate investments that will enable us to strategically and efficiently deploy capital, including close-to-core acquisitions that have unique and differentiated products, services and technologies.
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Primary Businesses and Brands Our businesses are committed to quality, reliability, durability and engineering excellence. Our brands have a strong international presence across many emerging markets, including China, India, Mexico, Brazil and Saudi Arabia. OUR KEY BRANDS MT • ITT Friction Technologies • KONI • Wolverine Advanced Materials • Axtone • Novitek • GALT.
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Below is a list of the key brands in each segment.
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The program, which includes periodic audits of many of our locations, including our major operating facilities, is designed to identify problems in a timely manner, correct deficiencies and prevent future noncompliance. ITT's environmental liabilities are, for the most part, not associated with current operating facilities (only two of ITT's 28 environmental matters are associated with active operating sites).
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In 2022, we launched a pilot program at our three most energy-intensive locations geared towards more precise measurement and analysis of Scope 1 and 2 GHG emissions. In 2023, we expanded the pilot program to sites in Czechia and Mexico.
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In 2022, new three-year contracts were successfully ratified by two unions that represent the majority of our union employees in the U.S. and we have not experienced any material strikes or work stoppages in the past several years. Diversity, Equity and Inclusion We believe a diverse, equitable and inclusive workforce is fundamental to our success and growth.
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As part 2 of this, we are also in the process of collecting and measuring preliminary Scope 3 emissions to further understand the source of our emissions and how to most accurately reduce them. We are subject to stringent federal, state, local, and foreign environmental laws and regulations concerning air emissions, water discharges and waste disposal.
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As part of our on-going response to the pandemic, we have taken continued action as part of our "Ready, Safe, Go!" program to help protect our workforce. We have maintained core crisis teams and enacted safety measures at all of our sites.
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Human Capital Management We believe that sustainable performance and growth are made possible only through the efforts of our dynamic and diverse team of employees. In order to continue innovating in the industries and key end markets we serve, ITT remains committed to attracting and retaining top talent globally.
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We also continue to use measures such as enhanced cleaning protocols, on-site rapid testing, and distribution of personal protective equipment and testing kits, to keep our employees safe. As a result of these measures, we have been able to operate our facilities as safely as reasonably possible under the circumstances.
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The remainder of MT's sales to Continental is through a long-term agreement to supply Continental with aftermarket parts. Industrial Process (IP) The Industrial Process segment is an OEM and an aftermarket parts and service provider of industrial pumps, valves, plant optimization and remote monitoring systems and services.
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With respect to stock awards, we have used discretionary equity-based grants with time-based vesting conditions to facilitate the retention of key personnel, particularly those identified as high-performing talent. 4 SEGMENT INFORMATION See Note 3, Segment Information , to the Consolidated Financial Statements for financial information about each of our segments.
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Specialty designer and manufacturer of high-bandwidth radio frequency (RF) connectors for harsh environment defense and space applications. December 29, 2023 Divestiture CCT Matrix Composites, Inc. Manufacturer of precision composite components in the aerospace and defense market.
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KONI shock absorbers are also incorporated into new OEM platform designs and sold to Tier-1 shock absorber manufacturers. 5 Bus, Truck and Trailer, and Defense manufactures hydraulic and hydro-pneumatic shock absorbers for sale to both OEM and aftermarket customers.
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January 19, 2024 Acquisition IP Svanehøj Group A/S Supplier of pumps and related aftermarket services with leading positions in cryogenic applications for the marine sector. Other than as described herein, there have been no significant developments since our previous Form 10-K filing. See Note 22, Acquisitions, Investments, and Divestitures , to the Consolidated Financial Statements for additional information. 10
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MT is a global leader in rail suspension components, freight coupling devices currently used in Europe and crash absorption systems. MT's sales to Continental, a supplier to the automotive industry and MT's largest customer, represented 18% of MT's 2022 revenue.
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New to our portfolio is Habonim, which is a designer and manufacturer of valves, valve automation and actuation for the gas distribution (including liquified natural gas), biotech and harsh application service sectors. 6 Aftermarket Our aftermarket solutions, which represent approximately 45% of IP's revenue, provide customers with replacement parts, services and plant optimization solutions that reduce total cost of ownership of pumps and rotating equipment.
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We have been able to partially mitigate the impact of this inflation via fixed-price supply contracts with suppliers, price increases to customers and productivity savings.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf operations at one or more of our manufacturing facilities were to be disrupted as a result of an epidemic or pandemic (including, without limitation, COVID-19), adverse weather condition, IT system or ERP implementation failure, cyber-attack, equipment failure, labor dispute, natural disaster, power outage, fire, explosion, act of terrorism, war, relocation of production location or any other reason, our ability to meet customer demand for our products may be impacted.
Biggest changeIf operations at one or more of our manufacturing facilities were to be disrupted or damaged as a result of war (including related to Russia-Ukraine, Israel-Palestine, and China-Taiwan), an epidemic or pandemic (including, without limitation, COVID-19), changing weather or climate conditions (including increases in storm intensity, sea-level rise, melting of permafrost and temperature extremes on facilities or operations; and changes in the availability or quality of water, or other natural resources on which our business depends), IT system failure, cyber-attack, equipment failure, labor dispute, natural disaster, power outage, fire, explosion, act of terrorism, relocation of production location or any other catastrophic event or reason, our ability to meet customer demand for our products may be impacted.
These risks include the following: • possibility of unfavorable circumstances arising from host country laws or regulations; 14 • restrictions, regulations, or tax liabilities on currency repatriation; • fluctuations in foreign exchange rates; • potential negative consequences from changes to taxation policies; • the disruption of operations from labor and political disturbances; • war or geopolitical instability in regions where we operate; • our ability to hire and maintain qualified staff in these regions; and • changes in tariffs and trade barriers, sanctioned countries and individuals, and import and export licensing requirements.
These risks include the following: • war or geopolitical instability in regions where we operate; • fluctuations in foreign exchange rates; • possibility of unfavorable circumstances arising from host country laws or regulations; • restrictions, regulations, or tax liabilities on currency repatriation; • potential negative consequences from changes to taxation policies; • the disruption of operations from labor and political disturbances; • our ability to hire and maintain qualified staff in these regions; and • changes in tariffs and trade barriers, sanctioned countries and individuals, and import and export licensing requirements.
In addition, our international subsidiaries report their results of operations and financial position in their respective local currencies (i.e., functional currencies), which are then translated into U.S. dollars for financial reporting purposes. As the relationship between these foreign currencies and the U.S. dollar changes, our financial results have been, and may 11 continue to be, adversely affected upon translation.
In addition, our international subsidiaries report their results of operations and financial position in their respective local currencies (i.e., functional currencies), which are then translated into U.S. dollars for financial reporting purposes. As the relationship between these foreign currencies and the U.S. dollar changes, our financial results have been, and may continue to be, adversely affected upon translation.
For example, the volatility of the energy market has generally been dependent upon the prevailing view of future gas and oil prices, which are influenced by numerous supply and demand factors, including availability and cost of capital, global and domestic economic conditions, environmental regulations, policies of the Organization of the Petroleum Exporting Countries (OPEC) countries and Russia and other factors.
For example, the volatility of 15 the energy market has generally been dependent upon the prevailing view of future gas and oil prices, which are influenced by numerous supply and demand factors, including availability and cost of capital, global and domestic economic conditions, environmental regulations, policies of the Organization of the Petroleum Exporting Countries (OPEC) countries and Russia and other factors.
If we are found to have failed to comply with requirements applicable to government contractors, we may be subject to various actions, including but not limited 17 to fines or penalties, reductions in the value of our government contracts, restrictions on the sale of certain products to the government, or suspension or debarment from government contracting.
If we are found to have failed to comply with requirements applicable to government contractors, we may be subject to various actions, including but not limited to fines or penalties, reductions in the value of our government contracts, restrictions on the sale of certain products to the government, or suspension or debarment from government contracting.
Product liability claims or product recalls in the future, regardless of their ultimate outcome, could have an adverse effect on our reputation and on our ability to attract and retain customers for our products. Anti-takeover provisions in our organizational documents and Indiana law could delay or prevent a change in control.
Product liability claims or product recalls in the future, regardless of their ultimate outcome, could have an adverse effect on our reputation and on our ability to attract and retain customers for our products. 18 Anti-takeover provisions in our organizational documents and Indiana law could delay or prevent a change in control.
A breach could also result in the loss of our intellectual property, potentially impacting our long-term capability to compete for sales of affected products. In addition, a breach of security of our information systems could result in litigation, regulatory action and potential liability, as well as increased costs to implement further information security measures.
A breach could also result in the loss of our intellectual property, potentially impacting our long-term capability to compete for sales of affected products. In addition, a breach of security of our information technology systems could result in litigation, regulatory action and potential liability, as well as increased costs to implement further information security measures.
Accordingly, some of our customers have chosen to postpone capital investment and maintenance, and may continue doing so in the future, potentially even during favorable conditions in their industries or markets , which has led, and may continue leading, to a delay or cancellation of orders.
Accordingly, some of our customers have chosen to postpone capital investment, maintenance, and/or production, and may continue doing so in the future, potentially even during favorable conditions in their industries or markets , which has led, and may continue leading, to a delay or cancellation of orders.
Our customers in these industries, particularly those whose demand for our products and services is primarily profit-driven, historically have tended to delay large capital projects, including expensive maintenance and upgrades, during economic downturns.
Our customers in these industries, particularly those whose demand for our products and services is primarily profit-driven, have tended to delay large capital projects, including expensive maintenance and upgrades, during economic downturns.
We have been mitigating, and will continue attempting to mitigate, the impact of these tariffs by lowering input costs through efficient utilization of our global manufacturing footprint, supplier and customer negotiations, and diversification strategies.
We have been mitigating, and will continue attempting to mitigate, the impact of tariffs by lowering input costs through efficient utilization of our global manufacturing footprint, supplier and customer negotiations, and diversification strategies.
The discovery of previously unknown or more extensive contamination at a site which the Company previously operated or currently operates could suddenly subject the Company to costly 18 remediation efforts.
The discovery of previously unknown or more extensive contamination at a site which the Company previously operated or currently operates could suddenly subject the Company to costly remediation efforts.
In addition, new laws and regulations that might favor the increased use of non-fossil fuels, including nuclear, wind, solar and bio-fuels or that are designed to increase energy efficiency could reduce demand for oil and gas production or power generation resulting in lower spending by our IP customers. Failure to comply with the U.S.
In addition, new laws and regulations that might favor the increased use of non-fossil fuels, including nuclear, wind, solar and biofuels or that are designed to increase energy efficiency could reduce demand for oil and gas production or power generation resulting in lower spending by our IP customers. Failure to comply with the U.S.
Intellectual property litigation could be time consuming for management, and could result in significant legal expense to either pursue claims against others, or to defend ourselves. If we are unable to protect our patents, trademarks, or other proprietary rights, or if we infringe or violate the rights of others, our ability to remain competitive could be adversely impacted.
Intellectual property litigation could be time consuming for management and could result in significant legal expenses to either pursue claims against others, or to defend ourselves. If we are unable to protect our patents, trademarks, or other proprietary rights, or if we infringe or violate the rights of others, our ability to remain competitive could be adversely impacted.
Business and Operating Risks Our business has been, and may continue to be, adversely affected by raw material price volatility, a limited number of suppliers and the inability of suppliers to meet quality and delivery requirements. Our business relies on third-party suppliers for raw materials, components and contract manufacturing services to produce our products.
Our business has been, and may continue to be, adversely affected by raw material price volatility, a limited number of suppliers and the inability of suppliers to meet quality and delivery requirements. Our business relies on third-party suppliers for raw materials, components and contract manufacturing services to produce our products.
If we are unable to protect sensitive information, our customers or governmental authorities could question the adequacy of our security processes and procedures and our compliance with evolving privacy and data security regulations and government cyber security requirements for government contractors, potentially causing us to lose business.
If we are unable to protect sensitive information, our customers or governmental authorities could question the adequacy of our security processes and procedures and our compliance with evolving privacy and data security regulations and government cybersecurity requirements for government contractors, potentially causing us to lose business.
Any further delay in our suppliers’ abilities to provide us with sufficient quality or flow of materials or any supplier price increases, or any decreased availability of raw materials or commodities, could further impair our ability to deliver products to our customers or may significantly impact our profitability.
Any further delay in our suppliers’ abilities to provide us with sufficient quality or flow of materials or any supplier price increases, or any decreased availability of raw materials or commodities, could further impair our ability to deliver products to our customers and may impact our profitability.
The ability of our customers to finance capital investment and maintenance may also be affected by factors independent of the conditions in their industries, such as the condition of global credit and capital markets.
The ability of our customers to finance capital investment, maintenance, and/or production may also be affected by factors independent of the conditions in their industries, such as the condition of global credit and capital markets.
These tariffs have negatively impacted demand for our products as well as the cost of certain parts and materials that we purchase from vendors located in China.
These tariffs have negatively impacted demand for our products as well as the cost of certain parts and materials that we purchase from vendors located overseas, particularly in China.
From time to time, we enter into derivative contracts to hedge some of our foreign currency exposures. However, our hedging strategy may fail to reduce our exposure and could even result in an unfavorable impact to our financial results. Refer to Note 22, Derivative Financial Instruments , for further information.
From time to time, we enter into derivative contracts to hedge some of our foreign currency exposures. However, our hedging strategy may fail to reduce our exposure and could even result in an unfavorable impact on our financial results. Refer to Note 21, Derivative Financial Instruments , for further information.
We have experienced and expect to continue to experience volatility in revenues, operating results and profitability primarily as a result of these uncertain global macroeconomic and capital market conditions. Continued instability in the geopolitical environment and global credit markets may put further pressure on global macroeconomic conditions.
We have experienced and may continue to experience volatility in revenues, operating results and profitability primarily as a result of these uncertain global macroeconomic conditions. Continued instability in the geopolitical environment and global credit markets may put further pressure on global macroeconomic conditions.
Although we actively manage the risks to our information systems that are within our control, we can provide no assurance that our actions or those of our third party service providers will be successful in eliminating or mitigating risks to our systems, networks or data.
Although we actively manage the risks to our information technology systems that are within our control, we can provide no assurance that our actions or those of 13 our third-party service providers will always be successful in eliminating or mitigating risks to our systems, networks or data.
Refer to Note 23, Acquisitions and Investments , for further information regarding acquisitions and investments made during the year. Although we conduct what we believe to be a prudent level of investigation regarding the operating and financial condition of the businesses we acquire, a level of risk remains regarding the actual operating condition of these businesses.
Refer to Note 22, Acquisitions, Investments, and Divestitures , for further information regarding acquisitions and investments made during the year. Although we conduct what we believe to be a prudent level of investigation regarding the operating and financial condition of the businesses we acquire, a level of risk remains regarding the actual operating condition of these businesses.
In 2022, decreased availability of raw materials and component parts adversely affected our ability to deliver products to our customers and resulted in increased backlog.
In 2023, decreased availability of raw materials and component parts adversely affected our ability to deliver products to our customers and resulted in increased backlog.
A significant portion of our revenue is derived from a single customer. Loss of this customer, a loss of business with this customer, or a reduction in this customer's market share, could adversely impact our financial results. Sales to Continental, a supplier to the automotive industry and ITT's largest customer, were approximately 8% of our total revenue in 2022.
A significant portion of our revenue is derived from a single customer. Loss of this customer, a loss of business with this customer, or a reduction in this customer's market share, could adversely impact our financial results. Sales to Continental, a supplier to the automotive industry and ITT's largest customer, were approximately 7% of our total revenue in 2023.
The Inflation Reduction Act includes a new corporate alternative minimum tax (the Corporate AMT) of 15% on the adjusted financial statement income (AFSI) of corporations with average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT is effective for the Company beginning in 2023.
The Inflation Reduction Act includes a new corporate alternative minimum tax (the Corporate AMT) of 17 15% on the adjusted financial statement income (AFSI) of corporations with an average AFSI exceeding $1.0 billion over a three-year period. The Corporate AMT was effective for the Company beginning in 2023.
Environmental laws and regulations allow for the assessment of substantial fines and criminal sanctions as well as facility shutdowns to address violations, and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges.
These laws could require us to incur substantial expenses. Environmental laws and regulations allow for the assessment of substantial fines and criminal sanctions as well as facility shutdowns to address violations and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges.
Our customer's businesses, particularly those in the energy, chemical and mining industries, which represented approximately 9%, 9%, and 3%, respectively, of our 2022 revenue, are to varying degrees cyclical and have experienced, and may in the future experience, periodic downturns of varying severity.
Our customer's businesses, particularly those in the energy, chemical and mining industries, which represented approximately 10%, 9%, and 4%, respectively, of our 2023 revenue, are to varying degrees cyclical and have experienced, and may in the future experience, periodic downturns of varying severity.
As a provider of products and services to government and commercial customers, and particularly as a government contractor, we are subject to a heightened risk of security breaches caused by computer viruses, illegal break-ins or hacking, sabotage, or acts of vandalism, including by foreign governments and cyber terrorists .
In addition, as a provider of products and services to government and commercial customers, and particularly as a government contractor, we are subject to a heightened risk of cybersecurity incidents caused by computer viruses, illegal break-ins or hacking, sabotage, or acts of vandalism, including by foreign governments, hackers and cyber terrorists.
This shortage has created difficulties for the Company in attracting and retaining factory employees, in meeting customer demand and in controlling labor costs. We currently have a significant number of open positions and we expect this to remain so in 2023.
The manufacturing industry is currently experiencing a skilled labor shortage. This shortage has created difficulties for the Company in attracting and retaining factory employees, in meeting customer demand and in controlling labor costs. We currently have a significant number of open positions, and we expect this to remain so in 2024.
Furthermore, information technology security threats are increasing in sophistication, intensity and frequency. A security breach may occur, including breaches that we may be unable to detect.
Furthermore, information technology security threats are increasing in sophistication, intensity and frequency. A cybersecurity incident may occur, including breaches that we may be unable to detect in a timely manner.
If we are unable to prevent, detect or adequately respond to cyber security breaches, our operations could be disrupted, our reputation could be harmed and our business could be materially and adversely affected.
If we are unable to prevent, detect or adequately respond to cybersecurity incidents, our operations could be disrupted, our reputation could be harmed, and our business could be materially and adversely affected.
Our information technology systems and those of third party service providers may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, telecommunication failures, cyber-attacks and user errors.
Our information technology systems and those of our third-party service providers may be susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, telecommunication failures, cybersecurity incidents and user errors that may affect our operations.
These include the possibility that: • an acquired business could under-perform relative to our expectations; • we could fail to realize the expected synergies of an acquisition; • we could experience difficulties in the integration of technology, operations, personnel and financial and other systems; • we could have acquired substantial undisclosed liabilities; 16 • there could be insufficient internal controls over financial activities or financial reporting at an acquired company that could impact us on a consolidated basis; • management attention could be diverted from other businesses; • we could lose key employees of the acquired businesses; • we could experience increased capital requirements; and • the acquisition could result in customer dissatisfaction.
These include the possibility that: • an acquired business could under-perform relative to our expectations; • we could fail to realize the expected synergies of an acquisition; • we could experience difficulties in the integration of technology, operations, personnel and financial and other systems; • we could have acquired substantial undisclosed liabilities; • there could be insufficient internal controls over financial activities or financial reporting at an acquired company that could impact us on a consolidated basis; • management attention could be diverted from other businesses; • an acquired business may have been impacted by a previous security breach where system/data integrity was compromised, or data was stolen without the seller's awareness; • we could lose key employees of the acquired businesses; • we could experience increased capital requirements; and • the acquisition could result in customer dissatisfaction.
Our operating results and our ability to maintain liquidity or procure capital have been, and may continue to be, adversely affected by unfavorable or uncertain global macroeconomic and capital market conditions.
Business and Operating Risks Our operating results have been, and may continue to be, adversely affected by unfavorable or uncertain global macroeconomic and capital market conditions.
Beginning in 2018, the U.S. government undertook a series of actions to increase tariffs on certain goods imported into the U.S., including steel and aluminum, and in response certain governments, including China, imposed retaliatory tariffs on various goods, including on certain goods we sell into China.
Under the previous administration, the U.S. government undertook a series of actions to increase tariffs on certain goods imported into the U.S., including steel and aluminum, and in response certain governments imposed retaliatory tariffs on various goods.
Commodity prices and the prices for other raw materials necessary for production have fluctuated, and may continue to fluctuate, significantly and in 2022 the increase in raw materials and shipping costs negatively impacted our financial results.
Commodity prices and the prices for other raw materials necessary for production have fluctuated, and may continue to fluctuate, and in 2023 increases in raw material costs negatively impacted our financial results.
Demand for certain of our products and services, particularly in our IP business, depends on the level of capital investment and planned maintenance expenditures of our customers which, in turn, depend on general economic conditions, availability of credit, economic conditions within their respective industries, volatility in commodity prices, expectations of future market behavior and their liquidity and financial position.
Demand for certain of our products and services depends on the levels of capital investment, planned maintenance expenditures, and/or production of our customers which, in turn, depend on general economic conditions, availability of credit, economic conditions within their respective industries, supply and demand shocks, workforce strikes or employee absenteeism, volatility in commodity prices, expectations of future market behavior and their liquidity and financial position.
The unavailability of our information systems, the failure of these systems to 13 perform as anticipated for any reason or any significant breach of security could cause significant disruption to our business or could result in decreased performance and increased costs.
The unavailability of our information technology systems, the failure of these systems to perform as anticipated for any reason, or any significant breach of security could cause significant disruption to our business or could result in decreased performance and increased costs. We continue to monitor data security regulations in the jurisdictions in which we operate.
The cost of compliance with increasingly complex and often conflicting regulations worldwide can also impair our flexibility in modifying product, marketing, pricing or other strategies for growing our businesses, as well as our ability to improve productivity and maintain acceptable profit margins.
The cost of compliance with increasingly complex and often conflicting regulations worldwide can also impair our flexibility in modifying product, marketing, pricing or other strategies for growing our businesses, as well as our ability to improve productivity and maintain acceptable profit margins. Our business is impacted by our customers' levels of capital investment, maintenance expenditures, production, and market cyclicality.
Even the most well-protected information systems are vulnerable to internal and external security breaches including, but not limited to, those by computer hackers and cyber terrorists utilizing techniques such as phishing, ransomware or denial of service attacks.
Even the most well-protected information technology systems are vulnerable to internal and external cybersecurity incidents including, but not limited to, those by employees and by computer hackers and other threat actors utilizing techniques such as phishing, ransomware or denial of service attacks.
We are subject to a variety of federal, state, local and foreign laws, rules and regulations related to the use, storage, handling, discharge or disposal of certain toxic, volatile or otherwise hazardous chemicals, gases and other substances used in manufacturing our products that could require us to incur substantial expenses.
We are subject to a variety of federal, state, local and foreign laws, rules and regulations related to the use, storage, handling, discharge or disposal of certain toxic, volatile or otherwise hazardous chemicals, gases and other substances used in manufacturing our products, as well as laws related to greenhouse gas emissions (including cap-and-trade laws).
Adverse global macroeconomic conditions, including due to inflation, slowing growth or a recession, currency fluctuations, new or increased tariffs or barriers to trade, uncertainty regarding the federal government’s debt limit, tighter credit, higher interest rates and higher unemployment can negatively impact customer confidence, spending, and demand for our products and services.
Adverse global macroeconomic conditions, including due to heightened geopolitical tensions, inflation, slowing growth or a recession, currency fluctuations, new or increased tariffs or barriers to trade, tighter credit, higher interest rates, union strikes, and higher unemployment can negatively impact customer confidence, spending, and demand for our products and services. In addition, these conditions can negatively impact our customers and suppliers.
If our ESG-related data, processing and reporting are incomplete or inaccurate, if we fail to achieve progress on our metrics on a timely basis or at all, or if we fail to satisfy the expectations of investors and other key stakeholders, our reputation, business, and financial performance could be adversely affected.
If our ESG-related data, processing and reporting are incomplete or inaccurate, if we fail to achieve progress on our metrics on a timely basis or at all, or if we fail to satisfy the expectations of investors and other key stakeholders, our reputation, business, and financial performance could be adversely affected. 16 Legal and Regulatory Risks We are subject to risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the U.S. government.
Adverse changes to macroeconomic conditions could jeopardize counterparty obligations with our customers and may reduce funds available for our customers to pay for our products and services for a prolonged and perhaps unknown period of time.
During 2023, global macroeconomic conditions continued to be influenced by a number of factors, including heightened geopolitical tensions. Adverse changes to macroeconomic conditions could jeopardize counterparty obligations with our customers and may reduce funds available for our customers to pay for our products and services for a prolonged and perhaps unknown period of time.
The primary foreign currencies to which we have exposure are the Euro, Chinese renminbi, Czech koruna, South Korean won, Saudi riyal and Hong Kong dollar.
The primary foreign currencies to which we have exposure are the Euro, Chinese renminbi, Czech koruna, Polish zloty, South Korean won, Saudi riyal, Mexican peso, and Israeli new shekel.
If we experience a disruption in our information technology systems, it could result in the loss of sales and customers and significant incremental costs, which could materially adversely affect our business.
We have experienced cybersecurity incidents in the past which have not had a material impact on our operations or financial results. If we experience a future disruption in our information technology systems, it could result in the loss of sales and customers and significant incremental costs, which could materially adversely affect our business.
The efficient operation of our business is dependent on information technology (IT) systems, some of which are managed by third parties. In the ordinary course of business, we collect and store confidential information, including proprietary business information belonging to us, our customers, suppliers, business partners and other third parties, and personally identifiable information of our employees.
In the ordinary course of business, we collect and store confidential information, including proprietary business information belonging to us, our customers, suppliers, business partners and other third parties, as well as personally identifiable information of our employees and others.
Our future success will continue to depend, to a significant extent, on our ability to attract or retain engineers, senior management, our skilled labor source and other key personnel, which will depend on our ability to offer competitive compensation, training, flexibility and other benefits that our current and prospective employees desire. 12 Failure to provide high quality and reliable products, innovate or respond to competitors in our markets or protect our intellectual property rights could adversely impact our business and financial results.
Our future success will continue to depend, to a significant extent, on our ability to attract or retain engineers, senior management, our skilled labor source and other key personnel, which will depend on our ability to offer competitive compensation, training, flexibility and other benefits that our current and prospective employees desire.
In addition, the supply of raw materials to ITT and to its component parts suppliers has been, and may continue to be, interrupted for a variety of reasons affecting our suppliers, including the COVID-19 pandemic, congested shipping ports around the world, production interruptions, the impaired financial condition of a particular supplier, capacity constraints, labor disputes or shortages, the ability to meet regulatory requirements and commitments to other purchasers.
We are not always able to pass along raw material and component price increases to our customers which has impacted, and may continue to impact, our sales growth and profitability. 11 In addition, the supply of raw materials to ITT and to its component parts suppliers has been, and may continue to be, interrupted for a variety of reasons affecting our suppliers, including congested shipping ports around the world, production interruptions, heightened geopolitical tensions, including related to the Russia-Ukraine and Israel-Palestine conflicts, global pandemics, the impaired financial condition of a particular supplier, capacity constraints, labor disputes or shortages, the ability to meet regulatory requirements and commitments to other purchasers.
The industries in which we operate are experiencing a skilled labor shortage and if we are unable to hire and retain key personnel, including engineering talent and senior management talent, our ability to operate or grow our business could be negatively impacted. The manufacturing industry is currently experiencing a skilled labor shortage.
Even if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses ourselves. 12 The industries in which we operate are experiencing a skilled labor shortage and if we are unable to hire and retain key personnel, including engineering talent and senior management talent, our ability to operate or grow our business could be negatively impacted.
The ESG factors by which companies’ corporate responsibility practices are assessed have been evolving and may continue to evolve. Additionally, requirements on U.S. public companies in regards to ESG compliance have been increasing and may continue to increase, including, but not limited to, the SEC's proposal to require extensive climate-related disclosures.
Additionally, requirements on U.S. public companies and companies with European operations with regards to ESG compliance have been increasing and may continue to increase, including, but not limited to, the SEC's proposal to require extensive climate-related disclosures and the European Union's Corporate Sustainability Reporting Directive (CSRD), which could additionally require third-party assurance disclosures.
Changes in environmental laws or regulations, the discovery of previously unknown or more extensive contamination or the failure of a potentially responsible party to perform may adversely affect our financial results.
The impact of this provision was not material in 2023 and future impacts will be dependent on the extent of share repurchases made in future periods. Changes in environmental laws or regulations, the discovery of previously unknown or more extensive contamination or the failure of a potentially responsible party to perform may adversely affect our financial results.
Our sales in emerging markets such as Mexico, South America, China, and the Middle East have been increasing. In 2022, 67% of our total sales were to customers operating outside of the United States compared to 70% in 2021.
Our international operations, including U.S. exports, comprise a growing portion of our operations and are a strategic focus for continued future growth. Our sales in emerging markets such as Mexico, South America, China, and the Middle East have been increasing. In both 2023 and 2022, approximately 67% of our total sales were to customers operating outside of the United States.
However, we expect that continued trade disputes between the U.S. and China and other countries, and other governmental actions related to tariffs or international trade agreements or policies may continue to adversely impact demand for our products as well as our costs.
However, we expect that any new or continued trade disputes or increased tensions between the U.S. and other countries, and any governmental actions, including increases of existing tariffs or the imposition of new tariffs, in response to those trade disputes or increased tensions, may continue to adversely impact demand for our products and our financial results.
If these conditions, or the economic conditions in the key markets or regions in which we operate, do not improve, we may continue to experience material adverse impacts on our financial results. We have been and continue to be negatively impacted by the COVID-19 pandemic and its related impacts to our employees, operations, customers, and suppliers.
If these conditions, or the economic conditions in the key markets or regions in which we operate, do not improve, we could experience material adverse impacts on our financial results.
This reduced demand may also erode average selling prices in our industry. These factors could have a material adverse effect on our business, results of operations and financial condition. 15 Russia’s war with Ukraine, and the global response to it, has had, and could continue to have, an adverse impact on our financial results.
This reduced demand may also erode average selling prices in our industry. These factors could have a material adverse effect on our business, results of operations and financial condition. A material business interruption, particularly at one of our manufacturing facilities, could negatively impact our ability to generate sales and meet customer demand.
This has resulted in greater expectations of us and has caused us, and may continue causing us, to undertake costly initiatives to satisfy such new criteria.
These evolving standards and regulations have caused us, and may continue causing us, to undertake costly initiatives to satisfy such new criteria.
Legal and Regulatory Risks We are subject to risks related to government contracting, including changes in levels of government spending and regulatory and contractual requirements applicable to sales to the U.S. government. Our CCT and MT segments derive a portion of their revenue from sales to U.S. government customers and higher tier contractors who sell to the U.S. government.
Our CCT and MT segments derive a portion of their revenue from sales to U.S. government customers and higher tier contractors who sell to the U.S. government. The government's expenditures are subject to political and budgetary fluctuations and constraints, which may result in significant unexpected changes in levels of demand for our products.
The government's expenditures are subject to political and budgetary fluctuations and constraints, which may result in significant unexpected changes in levels of demand for our products. In addition, the award, administration and performance of government contracts is subject to regulatory and contractual requirements that differ significantly from the terms and conditions that apply to contracts with our non-governmental customers.
In addition, the award, administration and performance of government contracts are subject to regulatory and contractual requirements that differ significantly from the terms and conditions that apply to contracts with our non-governmental customers. We have in the past and may in the future be subject to audits and investigations to evaluate our compliance with these requirements.
Due to our operations and sales outside of the U.S., we are subject to inherent business risks, including the imposition of tariffs, which may adversely affect our financial results. Our international operations, including U.S. exports, comprise a growing portion of our operations and are a strategic focus for continued future growth.
The loss of this customer, or a reduction in this 14 customer's market share could have a material adverse effect on our business, results of operations or financial condition. Due to our operations and sales outside of the U.S., we are subject to inherent business risks, including the imposition of tariffs, which may adversely affect our financial results.
The remainder of MT's sales to Continental is generated from a 10-year agreement to supply Continental with aftermarket parts, which is set to expire on December 31, 2023. We are currently in discussions with Continental to renew this agreement, which we anticipate reaching in 2023.
The remainder of MT's sales to Continental in 2023 was generated from a 10-year agreement to supply Continental with aftermarket parts, which expired on December 31, 2023. A new 10-year agreement, effective January 1, 2024, and extending through December 31, 2033, was signed in March 2023.
Third parties also could seek to hold us responsible for any of the liabilities that a counterparty agreed to assume. Even if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses ourselves.
Third parties also could seek to hold us responsible for any of the liabilities that a counterparty agreed to assume.
Based on our evaluation of the AFSI threshold, we do not believe the Corporate AMT would be immediately applicable to the Company, but the Corporate AMT may have potential impacts on our future U.S. tax expense, cash taxes and effective tax rate.
Given the AFSI threshold, the Corporate AMT was not applicable to the Company in 2023, but the Corporate AMT may have potential impacts on our future U.S. tax expense, cash taxes and effective tax rate. Additionally, the Inflation Reduction Act imposes a 1% excise tax on the fair market value of net stock repurchases made after December 31, 2022.
We believe the principal points of competition in our markets are product performance, reliability and innovation, application expertise, enforcement of intellectual property rights, brand reputation, energy efficiency, product life cycle cost, timeliness of delivery, proximity of service centers, effectiveness of distribution channels and price.
Failure to provide high quality and reliable products, innovate or respond to competitors in our markets or protect our intellectual property rights could adversely impact our business and financial results. We believe product performance, reliability and innovation, application expertise, enforcement of intellectual property rights, brand reputation, and price are principal points of competition in our markets.
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We are not always able to pass along raw material and component price increases to our customers which has impacted, and may continue to impact, our sales growth and profitability.
Added
The efficient operation of our business is dependent on information technology (IT) systems, some of which are owned or managed by third parties.
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In addition, these conditions can negatively impact our customers and suppliers.
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The ESG factors by which companies’ corporate responsibility practices are assessed have been evolving and may continue to evolve.
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During 2022, there has been a continued deterioration in global macroeconomic conditions, which has been caused by a number of factors, including the ongoing challenges posed by the COVID-19 pandemic and the Russia-Ukraine war.
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In October 2021, the Organization for Economic Cooperation and Development (OECD) and G20 Finance Ministers reached an agreement, known as Base Erosion and Profit Shifting (BEPS) Pillar Two, which is a multi-jurisdictional plan of action to address base erosion and profit shifting.
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The COVID-19 pandemic and the resulting measures enacted by federal, state and local, and foreign governments to contain the pandemic have caused, and continue to cause, significant disruptions in our businesses and in the global industries where we operate.
Added
On December 20, 2021, the OECD released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Model GloBE Rules for Pillar Two expected by calendar year 2024.
Removed
These disruptions have had, and may continue to have, a material adverse effect on our financial condition and results of operations due to the occurrence of the following: • government-mandated site closures, the impact of potential travel restrictions and stay-in-place restrictions, including those resulting from China's "zero-COVID" policy, and employee illness and absenteeism; • missed or late customer deliveries due to labor shortages or disruptions in our global supply chain as a result of congested shipping ports around the world, delayed supplier deliveries, supplier performance or financial concerns, or the inability to procure supplier inputs at reasonable prices or at all; and • delays in collections or an inability to collect on customer receivables, including due to customer bankruptcy.
Added
We are continuing to evaluate the Model GloBE Rules for Pillar Two and related legislation, and their potential impact on future periods. Enactment of this regulation in its current form could increase the amount of global corporate income tax paid by the Company. These increases could have a material adverse effect on our effective tax rate.
Removed
The ultimate impact of the COVID-19 pandemic on our operations and financial performance will depend on future developments that are not within our control, including, but not limited to, the severity and duration of a resurgence of COVID-19 or new variants, the availability and effectiveness of vaccines or other medical remedies against new variants, the extent to which people continue to work from home, vaccine mandates and their effect on our workforce, restrictions on or people's attitudes towards travel and the ongoing pace of economic recovery.
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At this time, we cannot predict the duration or full magnitude of the COVID-19 pandemic, the various governmental containment measures or the resulting disruptions to our markets and our global business.
Removed
The longer the pandemic continues, including as a result of a resurgence of the virus or the emergence of a more severe strain of the virus, the more likely that the foregoing risks will be realized and that other negative impacts on our business will occur, including some that we are unable to currently predict.
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The loss of this customer, failure to renew this long-term aftermarket agreement on terms at least as favorable as the current contract or at all, or a reduction in this customer's market share could have a material adverse effect on our business, results of operations or financial condition.
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Our business is impacted by our customers' levels of capital investment, maintenance expenditures and market cyclicality, particularly in the energy, chemical, and mining markets.
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Beginning in February 2022, the U.S. government and other nations imposed significant restrictions on most companies’ ability to do business in Russia as a result of Russia’s war with Ukraine.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur material properties account for over 90% of the total square feet of our properties.
Biggest changeOur material properties account for over 90% of the total square feet of our properties. Motion Technologies Industrial Process Connect & Control Technologies Total Number of Owned Locations 13 11 5 29 Number of Leased Locations 9 22 6 37 Total Locations 22 33 11 66 21
We consider these properties to be in good condition with sufficient capacity to accommodate the Company’s needs. The following table summarizes the number of our material properties (other than our corporate headquarters) by business segment as of December 31, 2022. We consider our properties containing 25,000 square feet or more, which primarily consist of manufacturing locations, to be material.
We consider these properties to be in good condition with sufficient capacity to accommodate the Company’s needs. The following table summarizes the number of our material properties (other than our corporate headquarters) by business segment as of December 31, 2023. We consider our properties containing 25,000 square feet or more, which primarily consist of manufacturing locations, to be material.
ITEM 2. PROPERTIES We own or lease approximately 160 manufacturing plants, warehouses, service centers, and sales and administrative offices to support our operations. These properties are located in various regions around the world, including North America, Europe, Asia, South America and the Middle East.
ITEM 2. PROPERTIES We own or lease approximately 170 manufacturing plants, warehouses, service centers, and sales and administrative offices to support our operations. These properties are located in various regions around the world, including North America, Europe, Asia, South America and the Middle East.
Removed
Motion Technologies Industrial Process Connect & Control Technologies Total Number of Owned Locations 13 11 5 29 Number of Leased Locations 10 23 5 38 Total Locations 23 34 10 67 In May 2022, we relocated our corporate headquarters from White Plains, New York to Stamford, Connecticut.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCaprais joined ITT in 2012, at which time he served as segment Chief Financial Officer of Motion Technologies and later Industrial Process. Prior to joining ITT, Mr. Caprais held leadership roles in finance at Marelli, and earlier held positions of increasing responsibility in finance at Valeo across North America and Europe. Ryan F.
Biggest changeCaprais held leadership roles in finance at Marelli, and earlier held positions of increasing responsibility in finance at Valeo across North America and Europe. 22 Cheryl de Mesa Graziano has served as our Vice President and Chief Accounting Officer since November 2022. Prior to joining ITT, she served as Chief Accounting Officer of Party City Holdco Inc.
Ms. de Mesa Graziano previously held various positions of increasing responsibility at Stanley Black & Decker, Inc. from May 2013 to October 2019, including Assistant Corporate Controller and Global Leader, Corporate Technical Accounting and Compliance. Before 2013, Ms. de Mesa Graziano held finance leadership roles at other companies including IBM and Financial Executives International. Maurine C.
She previously held various positions of increasing responsibility at Stanley Black & Decker, Inc. from May 2013 to October 2019, including Assistant Corporate Controller and Global Leader, Corporate Technical Accounting and Compliance. Before 2013, Ms. de Mesa Graziano held finance leadership roles at other companies including IBM and Financial Executives International. Maurine C.
Descriptions of certain legal proceedings to which the Company is a party are contained in Note 20, Commitments and Contingencies , to the Consolidated Financial Statements. 20 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of the Company as of February 1, 2023, are listed below.
Descriptions of certain legal proceedings to which the Company is a party are contained in Note 19, Commitments and Contingencies , to the Consolidated Financial Statements. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The executive officers of the Company as of February 1, 2024, are listed below.
Marino has served as our Senior Vice President and General Counsel since January 2023. Ms. Marino previously served as Vice President, Deputy General Counsel and Secretary of ITT from May 2016 to April 2019 and as Vice President, Chief Corporate Counsel and Corporate Secretary from September 2013 to May 2016. Prior to rejoining ITT, Ms.
Marino previously served as Vice President, Deputy General Counsel and Secretary of ITT from May 2016 to April 2019 and as Vice President, Chief Corporate Counsel and Corporate Secretary from September 2013 to May 2016. Prior to rejoining ITT, Ms.
Savi is currently a director of MSA Safety Inc. and serves on its compensation committee. Davide Barbon has served as our Senior Vice President and President, Asia Pacific Region since October 2020. He previously served as General Manager of the KONI and Axtone businesses within Motion Technologies from January 2017. Mr.
Savi is currently a director of MSA Safety Inc. and serves on its compensation committee. Davide Barbon has served as our Senior Vice President and President, Motion Technologies and Asia Pacific Region since October 2023. He previously served as our Senior Vice President and President, Asia Pacific Region since October 2020.
Marino served as Executive Vice President, General Counsel, Secretary and Chief Human Resources Officer at New Senior Investment Group Inc. from April 2019 to September 2021.
Marino served as Executive Vice President, General Counsel, Secretary and Chief Human Resources Officer at New Senior Investment Group Inc. from April 2019 to September 2021. Fernando Roland has served as our Senior Vice President and President of Industrial Process since August 2023. Prior to joining ITT, Mr.
Marino 48 Senior Vice President and General Counsel Luca Savi has served as our Chief Executive Officer, President and a director of the Company since January 2019. He previously served as President and Chief Operating Officer of the Company from August 2018 to December 2018 and as Executive Vice President and Chief Operating Officer from January 2017 to August 2018.
He previously served as President and Chief Operating Officer of the Company from August 2018 to December 2018 and as Executive Vice President and Chief Operating Officer from January 2017 to August 2018.
Prior to joining ITT, she served as Chief Accounting Officer of Party City Holdco Inc. (Party City) from December 2021 to October 2022. Ms. de Mesa Graziano served as Vice President, Global Controller and Vice President, Financial Reporting and Accounting from when she joined Party City in November 2019.
(Party City) from December 2021 to October 2022. Ms. de Mesa Graziano also served as Vice President, Global Controller and Vice President, Financial Reporting and Accounting at Party City.
Emmanuel Caprais has served as our Senior Vice President and Chief Financial Officer since October 2020. He previously served as Vice President of Finance and Group Chief Financial Officer, in charge of the Company’s business unit finance teams, Financial Planning & Analysis and Investor Relations for the company. Mr.
He previously served as Vice President of Finance and Group Chief Financial Officer, in charge of the Company’s business unit finance teams, Financial Planning & Analysis and Investor Relations for the company. Mr. Caprais joined ITT in 2012, at which time he served as segment Chief Financial Officer of Motion Technologies and later Industrial Process. Prior to joining ITT, Mr.
Name Age Current Title Luca Savi 57 President and Chief Executive Officer Davide Barbon 53 Senior Vice President and President, Asia Pacific Emmanuel Caprais 48 Senior Vice President and Chief Financial Officer Ryan F.
Name Age Current Title Luca Savi 58 President and Chief Executive Officer Davide Barbon 54 Senior Vice President and President, Motion Technologies and Asia Pacific Emmanuel Caprais 49 Senior Vice President and Chief Financial Officer Cheryl de Mesa Graziano 51 Vice President and Chief Accounting Officer Maurine C.
Barbon joined the Company in 2010, initially serving in the Brazil, Russia, India and China business of Motion Technologies, and then led its China business for five years. Prior to joining ITT, he spent 14 years with JLG Industries, where he had a number of roles of increasing responsibility across the United States, Europe, and Latin America.
Prior to joining ITT, he spent 14 years with JLG Industries, where he had a number of roles of increasing responsibility across the United States, Europe, and Latin America. Emmanuel Caprais has served as our Senior Vice President and Chief Financial Officer since October 2020.
Flynn 51 Senior Vice President and President, Connect & Control Technologies Carlo Ghirardo 52 Senior Vice President and President, Motion Technologies Cheryl de Mesa Graziano 50 Vice President and Chief Accounting Officer Maurine C. Lembesis 56 Senior Vice President and Chief Human Resources Officer Bartek Makowiecki 44 Senior Vice President, Strategy and Business Development Lori B.
Lembesis 57 Senior Vice President and Chief Human Resources Officer Bartek Makowiecki 45 Senior Vice President, Strategy and Business Development Lori B.
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Flynn has served as Senior Vice President and President, Connect and Control Technologies since October 2020. Prior to that, Mr. Flynn was Senior Vice President and President, Asia Pacific Region from January 2019. He previously served as General Manager of Motion Technologies China from 2016. Prior to joining ITT, Mr.
Added
Marino 49 Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer Fernando Roland 50 Senior Vice President and President, Industrial Process Luca Savi has served as our Chief Executive Officer, President and a director of the Company since January 2019.
Removed
Flynn served as Executive Vice President and Head of Business Area Equipment for Konecranes from 2013 to 2016 and held various other positions with Konecranes including the Asia-Pacific President and Director for its Port Cranes & Lifttrucks businesses in Asia from 2005 to 2013. Carlo Ghirardo has served as our Senior Vice President and President, Motion Technologies since April 2018.
Added
Prior to that, he served as General Manager of the KONI and Axtone businesses within Motion Technologies from January 2017. Mr. Barbon joined the Company in 2010, initially serving in the Brazil, Russia, India and China business of Motion Technologies, and then led its China business for five years.
Removed
Prior to joining ITT, he served as President of Eaton’s Vehicle Group EMEA region since 2017. He also served as Vice President and General Manager of Eaton’s Engine Air Management Product Group from 2015, as Vice President and General Manager of Eaton’s Valvetrain Division from 2010, as well as holding various other executive roles in global operations from 2003.
Added
Marino has served as our Senior Vice President and General Counsel since January 2023. She was appointed as Corporate Secretary and Chief Compliance Officer in October 2023. Ms.
Removed
Prior to that, Mr. Ghirardo held leadership positions at United Technologies Corporation and Michelin. He also acquired lean manufacturing consulting and project management experience with Galgano & Associates working in transformation projects across Europe. 21 Cheryl de Mesa Graziano has served as our Vice President and Chief Accounting Officer since November 2022.
Added
Roland served as Senior Vice President, Customer Engineered Solutions — Americas, and held other leadership roles at Continental AG from March 2013 to July 2023. Prior to that, Mr. Roland held various business leadership positions at companies such as DuPont de Nemours, Inc., Hyosung Corporation, and Performance Fibers from 1996 to 2013.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe continue to utilize the 2019 Plan in a manner that is consistent with our capital allocation strategy, which has centered on those investments necessary to grow our businesses organically and through acquisitions, while also providing cash returns to shareholders.
Biggest changeWe continue to utilize the 2019 Plan in a manner that is consistent with our capital allocation strategy, which has centered on those investments necessary to grow our businesses organically and through acquisitions, while also providing cash returns to shareholders. On October 4, 2023, the Board of Directors approved an indefinite term $1,000 open-market share repurchase program (the 2023 Plan).
We have made no open-market share repurchases of our common stock during the quarter ended December 31, 2022. 23 COMPANY STOCK PERFORMANCE The following graph shows a comparison of the cumulative total shareholder return for ITT, the S&P 400 Mid Cap Index, and the S&P 400 Capital Goods Index over the five years ended December 31, 2022.
We have made no open-market share repurchases of our common stock during the quarter ended December 31, 2023. 24 COMPANY STOCK PERFORMANCE The following graph shows a comparison of the cumulative total shareholder return for ITT, the S&P 400 Mid Cap Index, and the S&P 400 Capital Goods Index over the five years ended December 31, 2023.
It shows the share price appreciation of a $100 investment made on December 31, 2017, assuming any dividends paid are reinvested.
It shows the share price appreciation of a $100 investment made on December 31, 2018, assuming any dividends paid are reinvested.
Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. During the fiscal year ended December 31, 2022, no equity securities of the Company were sold by the Company that were not registered under the Securities Act.
Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. During the fiscal year ended December 31, 2023, the Company did not offer or sell any equity securities that were not registered under the Securities Act.
ISSUER PURCHASES OF EQUITY SECURITIES On October 30, 2019, the Board of Directors approved an indefinite term $500 share repurchase program (the 2019 Plan) under which $139 remains available.
ISSUER PURCHASES OF EQUITY SECURITIES On October 30, 2019, the Board of Directors approved an indefinite term $500 share repurchase program (the 2019 Plan) under which $78.8 remained available as of December 31, 2023.
There were approximately 6,036 holders of record of our common stock on February 13, 2023.
There were approximately 5,706 holders of record of our common stock on February 9, 2024.
COMPARISON OF CUMULATIVE FIVE-YEAR TOTAL RETURN 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 ITT Inc. $ 100.00 $ 91.34 $ 141.19 $ 148.85 $ 199.41 $ 160.52 S&P 400 Mid-Cap $ 100.00 $ 88.90 $ 112.17 $ 127.48 $ 159.01 $ 138.18 S&P 400 Capital Goods $ 100.00 $ 85.99 $ 114.15 $ 136.80 $ 174.64 $ 157.15 This graph is not, and is not intended to be, indicative of future performance of our common stock.
COMPARISON OF CUMULATIVE FIVE-YEAR TOTAL RETURN 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 ITT Inc. $ 100.00 $ 154.58 $ 162.96 $ 218.32 $ 175.74 $ 261.68 S&P 400 Mid-Cap $ 100.00 $ 126.17 $ 143.39 $ 178.85 $ 155.42 $ 180.90 S&P 400 Capital Goods $ 100.00 $ 132.75 $ 159.09 $ 203.10 $ 182.76 $ 251.41 This graph is not, and is not intended to be, indicative of future performance of our common stock.
Added
Repurchases under this authorization will begin upon the completion of the 2019 Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeA reconciliation of adjusted income from continuing operations, including adjusted earnings per diluted share, to income from continuing operations and income from continuing operations per diluted share for the years ended December 31, 2022 and 2021 are provided in the table below. 2022 2021 Income from continuing operations attributable to ITT Inc. $ 368.3 $ 314.8 Gain on sale of long-lived assets, net of tax expense of $3.8 and $0.0 (a) (11.7) — Impacts from Russia-Ukraine war, net of tax benefit of $(1.3) and $0.0, respectively 6.6 — Acquisition-related costs, net of tax benefit of $(0.3) and $(0.1), respectively 3.4 0.5 Restructuring costs, net of tax benefit of $(1.1) and $(2.4), respectively 2.7 7.2 Asset impairment charges, net of tax benefit of $(0.4) and $0.0, respectively 1.3 — Tax-related special items (b) (2.3) (10.5) Net asbestos-related costs, net of tax expense of $0.0 and $113.5, respectively — 39.1 Other costs (income), net of tax (benefit) expense of $(1.0) and $0.3, respectively (c) 3.2 (0.6) Adjusted income from continuing operations $ 371.5 $ 350.5 Income from continuing operations attributable to ITT Inc. per diluted share (EPS) $ 4.40 $ 3.64 Adjusted EPS $ 4.44 $ 4.05 (a) 2022 includes a gain of $14.7 related to the sale of a former operating facility that was previously held by a business within our IP segment.
Biggest changePer share amounts are reported in ones and may not calculate due to rounding. 2023 2022 Income from Continuing Operations EPS Income from Continuing Operations EPS Reported $ 411.4 $ 4.97 $ 368.3 $ 4.40 Loss on sale of business (a) 15.3 0.19 — — Restructuring costs 9.9 0.12 3.8 0.05 Impacts from Russia-Ukraine war 2.5 0.03 7.9 0.09 Acquisition- and divestiture-related costs 2.4 0.03 3.7 0.04 Gain on sale of long-lived assets (b) — — (15.5) (0.19) Asset impairment charges — — 1.7 0.02 Other (benefits) costs (c) (2.3) (0.04) 4.2 0.06 Total tax (benefit) expense of adjustments (d) (6.2) (0.07) (0.3) — Tax-related special items (e) (2.0) (0.02) (2.3) (0.03) Adjusted $ 431.0 $ 5.21 $ 371.5 $ 4.44 (a) Relates to the sale of our Matrix business in December 2023.
We are currently under examination in several jurisdictions including the Czechia, Germany, Hong Kong, India, Italy, Japan, the U.S. and Venezuela. The calculation of our tax liability for unrecognized tax benefits includes dealing with uncertainties in the application of complex tax laws and regulations in various tax jurisdictions.
We are currently under examination in several jurisdictions including Czechia, Germany, Hong Kong, India, Italy, Japan, the U.S. and Venezuela. The calculation of our tax liability for unrecognized tax benefits includes dealing with uncertainties in the application of complex tax laws and regulations in various tax jurisdictions.
Borrowings under the credit facility are available in U.S. dollars, Euros, British 33 pound sterling or any other currency that may be requested by us, subject to the approval of the administrative agent and each lender.
Borrowings under the credit facility are available in U.S. dollars, Euros, British pound sterling or any other currency that may be requested by us, subject to the approval of the administrative agent and each lender.
Subject to certain conditions, we are permitted to terminate permanently the total commitments and reduce commitments by a minimum aggregate amount of $10 or any whole multiple of $1 in excess thereof.
Subject to certain conditions, we are permitted to terminate permanently the total commitments and reduce commitments by a minimum aggregate amount of $10 or any whole 33 multiple of $1 in excess thereof.
Revolving Credit Agreement On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third party lenders including Bank of America, N.A., as administrative agent (the 2021 Revolving Credit Agreement).
Revolving Credit Agreement On August 5, 2021, we entered into a revolving credit facility agreement with a syndicate of third party lenders including Bank of America, N.A., as administrative agent (as amended, the 2021 Revolving Credit Agreement).
Significant changes to these estimates and assumptions could adversely impact our conclusions. Actual future results may differ from those estimates. During the fourth quarter of 2022, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units were substantially in excess of each of their carrying values.
Significant changes to these estimates and assumptions could adversely impact our conclusions. Actual future results may differ from those estimates. During the fourth quarter of 2023, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units were substantially in excess of each of their carrying values.
Management believes that reporting organic revenue provides useful information to investors by facilitating comparisons of our revenue performance with prior and future periods and to our peers. A reconciliation of revenue to organic revenue for the year ended December 31, 2022 is provided below.
Management believes that reporting organic revenue provides useful information to investors by facilitating comparisons of our revenue performance with prior and future periods and to our peers. A reconciliation of revenue to organic revenue for the year ended December 31, 2023 is provided below.
See Note 20, Commitments and Contingencies , to the Consolidated Financial Statements for further information. 36 Off-Balance Sheet Arrangements Off-balance sheet arrangements represent transactions, agreements or other contractual arrangements with unconsolidated entities, where an obligation or contingent interest exists.
See Note 19, Commitments and Contingencies , to the Consolidated Financial Statements for further information. 36 Off-Balance Sheet Arrangements Off-balance sheet arrangements represent transactions, agreements or other contractual arrangements with unconsolidated entities, where an obligation or contingent interest exists.
All comparisons included within this Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , refer to results for the year ended December 31, 2022 compared to the year ended December 31, 2021, unless stated otherwise.
All comparisons included within this Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , refer to results for the year ended December 31, 2023 compared to the year ended December 31, 2022, unless stated otherwise.
We have not recorded any material loss contingencies under these guarantees, letters of credit and similar arrangements as of December 31, 2022 as the likelihood of nonperformance by the underlying obligors is considered remote.
We have not recorded any material loss contingencies under these guarantees, letters of credit and similar arrangements as of December 31, 2023 as the likelihood of nonperformance by the underlying obligors is considered remote.
Additionally, all financial results and share repurchases other than per share amounts are reported in millions, unless stated otherwise. Please refer to our Annual Report on Form 10-K ( 2021 Annual Report ) for a discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020.
Additionally, all financial results and share repurchases other than per share amounts are reported in millions, unless stated otherwise. Per share amounts are reported in ones. Please refer to our Annual Report on Form 10-K ( 2022 Annual Report ) for a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021.
(c) Other long-term obligations include amounts recorded in our Consolidated Balance Sheet as of December 31, 2022, including estimated environmental payments and employee compensation agreements. We estimate based on historical experience that we will spend, on average, approximately $5 per year on environmental investigation and remediation.
(c) Other long-term obligations include amounts recorded in our Consolidated Balance Sheet as of December 31, 2023, including estimated environmental payments and employee compensation agreements. We estimate based on historical experience that we will spend, on average, approximately $6 per year on environmental investigation and remediation.
See Note 18, Capital Stock , and Note 23, Acquisitions and Investments , for further information. All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance.
See Note 18, Capital Stock , and Note 22, Acquisitions, Investments, and Divestitures , for further information. All outstanding commercial paper for both periods had maturity terms of less than three months from the date of issuance.
The following table summarizes net cash derived from operating, investing, and financing activities for the years ended December 31, 2022 and 2021.
The following table summarizes net cash derived from operating, investing, and financing activities for the years ended December 31, 2023 and 2022.
We are permitted to request that lenders increase the commitments under the facility by up to $350 for a maximum aggregate principal amount of $1,050; however, this is subject to certain conditions and therefore may not be available to us. As of December 31, 2022 and 2021, we had no outstanding borrowings under the current or former revolving credit agreements.
We are permitted to request that lenders increase the commitments under the facility by up to $350 for a maximum aggregate principal amount of $1,050; however, this is subject to certain conditions and therefore may not be available to us. As of December 31, 2023 and 2022, we had no outstanding borrowings under the 2021 Revolving Credit Agreement.
Special items represent charges or credits that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. “Adjusted operating margin” and “Adjusted segment operating margin” are defined as adjusted operating income or adjusted segment operating income divided by revenue.
Special items represent charges or credits that impact current results, which management views as unrelated to the Company’s ongoing operations and performance. “Adjusted operating margin” is defined as adjusted operating income (loss) divided by revenue.
Refer to Part I, Item 1, Description of Business , for a further overview of our company, segments, products and service offerings, and other information about the business. EXECUTIVE SUMMARY During 2022, despite challenging macroeconomic conditions, we delivered strong results, which included revenue and operating income growth, segment operating margin expansion, EPS growth and effective deployment of capital.
Refer to Part I, Item 1, Description of Business , for a further overview of our company, segments, products and service offerings, and other information about the business. EXECUTIVE SUMMARY During 2023, despite evolving macroeconomic conditions, we delivered strong financial results, which included revenue and operating income growth, operating margin expansion, EPS growth and effective deployment of capital.
Net cash distributions from foreign countries to the U.S. during the years ended December 31, 2022 and 2021 were $74.0 and $116.9, respectively. The timing and amount of any additional future distributions remains under evaluation based on our jurisdictional cash needs. Capital Resources As of December 31, 2022, we have access to short- and long-term funding sources.
Net cash distributions from foreign countries to the U.S. during the years ended December 31, 2023 and 2022 were $357.5 and $74.0, respectively. The timing and amount of any additional future distributions remains under evaluation based on our jurisdictional cash needs. Capital Resources As of December 31, 2023, we have access to short- and long-term funding sources.
The following table provides a summary of key performance indicators for 2022 in comparison to 2021.
The following table provides a summary of key performance indicators for 2023 in comparison to 2022.
We do not have a liability recorded for these expired provisions and are not aware of any claims or other information that would give rise to material payments under such provisions. Guarantees We had $141.7 of guarantees, letters of credit and similar arrangements outstanding as of December 31, 2022, primarily pertaining to commercial or performance guarantees and insurance matters.
We do not have a liability recorded for these expired provisions and are not aware of any claims or other information that would give rise to material payments under such provisions. Guarantees We had $159.4 of guarantees, letters of credit and similar arrangements outstanding as of December 31, 2023, primarily pertaining to commercial or performance guarantees and insurance matters.
Our long-term debt carries a weighted average fixed interest rate of 0.66% and requires annual principal and interest payments of approximately $2.5, on average, through maturity. The table below provides our long-term debt outstanding as of December 31, 2022 and 2021.
Our long-term debt carries a weighted average fixed interest rate of 0.86% and requires annual principal and interest payments of approximately $2.0, on average, through maturity. The table below provides our long-term debt outstanding as of December 31, 2023 and 2022.
Our off-balance sheet arrangements as of December 31, 2022 consist of indemnities related to acquisition and disposition agreements and certain third-party guarantees. Indemnities Since our founding in 1920, we have acquired and disposed of numerous businesses.
Our off-balance sheet arrangements as of December 31, 2023 consist of indemnities related to acquisition and disposition agreements and certain third-party guarantees. Indemnities Since our founding in 1920 (pre-spin-offs), we have acquired and disposed of numerous businesses.
Our environmental reserve of $57.1 at December 31, 2022, represents management’s estimate of undiscounted costs expected to be incurred related to environmental assessment or remediation efforts, including related legal fees, without regard to potential recoveries from insurance companies or other third parties.
Our environmental reserve of $56.0 at December 31, 2023, represents management’s estimate of undiscounted costs expected to be incurred related to environmental assessment or remediation efforts, including related legal fees, without regard to potential recoveries from insurance companies or other third parties.
We believe that these financial measures are 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. A reconciliation of operating income to adjusted operating income for the years ended December 31, 2022 and 2021 are provided in the tables below.
We believe that these financial measures are 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. Reconciliations of operating income (loss) to adjusted operating income (loss) for the years ended December 31, 2023 and 2022 are provided below.
(c) 2021 includes accelerated amortization of an intangible asset and acquisition-related costs. 39 • “Adjusted income from continuing operations” is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, certain gain on sale of long-lived assets, restructuring, severance, certain asset impairment charges, pension termination and settlement impacts, certain acquisition-related impacts, income tax settlements or adjustments, unusual or infrequent items and, for 2021, asbestos-related impacts.
(d) 2022 includes severance charges and accelerated amortization of an intangible asset. 39 • “Adjusted income from continuing operations” is defined as income from continuing operations attributable to ITT Inc. adjusted to exclude special items that include, but are not limited to, certain gain on sale of long-lived assets, restructuring, severance, certain asset impairment charges, certain acquisition- and divestiture-related impacts, income tax settlements or adjustments and unusual or infrequent items.
A portion of our environmental investigation and remediation costs are legally mandated through various orders and agreements with state and federal oversight agencies. As of December 31, 2022, our recorded environmental liability was $57.1.
A portion of our environmental investigation and remediation costs are legally mandated through various orders and agreements with state and federal oversight agencies. As of December 31, 2023, our recorded environmental liability was $56.0.
Year Ended December 31, 2022 Motion Technologies Industrial Process Connect & Control Technologies Total Segment Corporate ITT Inc.
Year Ended December 31, 2023 Motion Technologies Industrial Process Connect & Control Technologies Corporate ITT Inc.
Our average daily outstanding commercial paper balance for the years ended 2022 and 2021 was $459.6 and $133.5, respectively, and the maximum outstanding commercial paper during each of those respective years was $561.7 and $197.5.
Our average daily outstanding commercial paper balance for the years ended 2023 and 2022 was $366.9 and $459.6, respectively, and the maximum outstanding commercial paper during each of those respective years was $669.9 and $561.7.
Sources and Uses of Liquidity In addition to the capital resources discussed above, our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements.
Please refer to the rating agency websites and press releases for more information. 34 Sources and Uses of Liquidity In addition to the capital resources discussed above, our principal source of liquidity is our cash flow generated from operating activities, which provides us with the ability to meet the majority of our short-term funding requirements.
Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. Aggregate dividends declared in 2022 were $87.7, compared to $76.2 in 2021, reflecting annual per share amounts of $1.056 and $0.88, respectively.
Therefore, we cannot provide any assurance as to what level of dividends, if any, will be paid in the future. Aggregate dividends declared in 2023 were $95.9, compared to $87.7 in 2022, reflecting annual per share amounts of $1.160 and $1.06, respectively.
For the Year Ended December 31 2022 2021 Change Organic growth (a) Motion Technologies $ 1,374.0 $ 1,368.6 0.4 % 8.8 % Industrial Process 971.0 843.2 15.2 % 13.0 % Connect & Control Technologies 645.6 554.7 16.4 % 19.7 % Eliminations (2.9) (1.5) Total Revenue $ 2,987.7 $ 2,765.0 8.1 % 12.2 % (a) See the section titled " Key Performance Indicators and Non-GAAP Measures " for a definition and reconciliation of organic revenue.
For the Year Ended December 31 2023 2022 Change Organic growth (a) 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 % Eliminations (3.8) (2.9) Total Revenue $ 3,283.0 $ 2,987.7 9.9 % 8.1 % (a) See the section titled " Key Performance Indicators and Non-GAAP Measures " for a definition and reconciliation of organic revenue.
Russia-Ukraine War In February 2022, the United States and other leading nations announced targeted economic sanctions on Russia and certain Russian citizens in response to Russia’s war with Ukraine, which has increased regional instability and global economic and political uncertainty.
We are currently unable to reasonably estimate any future impacts on our business and financial results. Russia-Ukraine War In February 2022, the United States and other leading nations announced targeted economic sanctions on Russia and certain Russian citizens in response to Russia’s war with Ukraine, which has increased regional instability and global economic and political uncertainty.
Total IP orders during 2022 were $1,101.9, an increase of 17.1% compared to the prior year, including $271.1 of orders in the fourth quarter, which represents 7.8% growth from last year. IP's backlog as of December 31, 2022 was $580.0, reflecting an increase of $135.6, or 30.5%, compared to December 31, 2021.
Total IP orders during 2023 were $1,227.0, an increase of 11.4% compared to the prior year, including $285.9 of orders in the fourth quarter, which represents 5.5% growth from the fourth quarter of last year. IP's backlog as of December 31, 2023 was $676.8, reflecting an increase of $96.8, or 16.7%, compared to December 31, 2022.
Funding of Postretirement Plans The following table provides a summary of the funded status of our postretirement benefit plans. 2022 2021 As of December 31 U.S. Pension Non-U.S. Pension Other Benefits Total U.S. Pension Non-U.S.
See Note 18, Capital Stock for more information. 35 Funding of Postretirement Plans The following table provides a summary of the funded status of our postretirement benefit plans. 2023 2022 As of December 31 U.S. Pension Non-U.S. Pension Other Benefits Total U.S. Pension Non-U.S.
See Note 16, Postretirement Benefit Plans , for additional financial information related to our postretirement obligations. 35 Contractual Obligations The following table summarizes ITT’s commitment to make future payments under long-term contractual obligations as of December 31, 2022.
We currently estimate 2024 contributions to our pension and other postretirement benefits plans of approximately $12. See Note 16, Postretirement Benefit Plans , for additional financial information related to our postretirement obligations. Contractual Obligations The following table summarizes ITT’s commitment to make future payments under long-term contractual obligations as of December 31, 2023.
Pension Other Benefits Total Fair value of plan assets $ — $ 0.4 $ — $ 0.4 $ — $ 0.5 $ — $ 0.5 Projected benefit obligation 11.2 67.9 70.7 149.8 14.8 93.1 106.4 214.3 Funded status $ (11.2) $ (67.5) $ (70.7) $ (149.4) $ (14.8) $ (92.6) $ (106.4) $ (213.8) Our non-U.S. pension plans, which are typically not funded due to local regulations, had a decline in projected benefit obligation of $25.2 during 2022, primarily due to a higher discount rate and favorable foreign currency translation.
Pension Other Benefits Total Fair value of plan assets $ — $ 0.4 $ — $ 0.4 $ — $ 0.4 $ — $ 0.4 Projected benefit obligation 11.2 73.2 66.2 150.6 11.2 67.9 70.7 149.8 Funded status $ (11.2) $ (72.8) $ (66.2) $ (150.2) $ (11.2) $ (67.5) $ (70.7) $ (149.4) Our non-U.S. pension plans, which are typically not funded due to local regulations, had an increase in projected benefit obligation of $5.3 during 2023, primarily due to a lower discount rate.
Although it is not possible to predict with certainty the ultimate costs of environmental remediation, the reasonably possible high-end of our estimated environmental liability range at December 31, 2022 was $93.5. Recent Accounting Pronouncements See Note 2, Recent Accounting Pronouncements , to the Consolidated Financial Statements for a complete discussion of recent accounting pronouncements.
Although it is not possible to predict with certainty the ultimate costs of environmental remediation, the reasonably possible high-end of our estimated environmental liability range at December 31, 2023 was $98.2. See Note 19, Commitments and Contingencies , to the Consolidated Financial Statements for more information.
Motion Technologies Industrial Process Connect & Control Technologies Eliminations Total ITT 2022 Revenue $ 1,374.0 $ 971.0 $ 645.6 $ (2.9) $ 2,987.7 Acquisitions — (46.5) — — (46.5) Foreign currency translation 114.4 28.2 18.3 — 160.9 2022 Organic revenue 1,488.4 952.7 663.9 (2.9) 3,102.1 2021 Revenue 1,368.6 843.2 554.7 (1.5) 2,765.0 Organic revenue growth $ 119.8 $ 109.5 $ 109.2 $ (1.4) $ 337.1 Percentage change 8.8 % 13.0 % 19.7 % 12.2 % 38 • “Adjusted operating income” and “Adjusted segment operating income” are defined as operating income, adjusted to exclude special items that include, but are not limited to, certain gain on sale of long-lived assets, restructuring, severance, certain asset impairment charges, certain acquisition-related impacts, unusual or infrequent operating items and, for 2021, asbestos-related impacts.
Motion Technologies Industrial Process Connect & Control Technologies Eliminations Total ITT 2023 Revenue $ 1,457.8 $ 1,129.6 $ 699.4 $ (3.8) $ 3,283.0 Acquisitions — (15.0) (15.5) — (30.5) Foreign currency translation (17.0) (4.7) (1.4) — (23.1) 2023 Organic revenue 1,440.8 1,109.9 682.5 (3.8) 3,229.4 2022 Revenue 1,374.0 971.0 645.6 (2.9) 2,987.7 Organic revenue growth $ 66.8 $ 138.9 $ 36.9 $ (0.9) $ 241.7 Percentage change 4.9 % 14.3 % 5.7 % 8.1 % 38 • “Adjusted operating income (loss)” is defined as operating income (loss), adjusted to exclude special items that include, but are not limited to, certain gain on sale of long-lived assets, restructuring, severance, certain asset impairment charges, certain acquisition- and divestiture-related impacts and unusual or infrequent operating items.
For the Year Ended December 31 2022 2021 Change General and administrative expenses (a) $ 211.6 $ 221.3 (4.4) % Sales and marketing expenses 156.9 150.8 4.0 % Research and development expenses 96.5 94.9 1.7 % Gain on sale of long-lived assets (16.3) (7.0) 132.9 % Restructuring costs 3.8 9.6 (60.4) % Asset impairment charges 1.8 — — % Asbestos-related benefit, net — (74.4) (100.0) % Total operating expenses $ 454.3 $ 395.2 15.0 % By Segment: Motion Technologies $ 140.9 $ 158.0 (10.8) % Industrial Process 150.0 155.8 (3.7) % Connect & Control Technologies 119.6 119.0 0.5 % Corporate & Other 43.8 (37.6) (216.5) % (a) The prior year presentation has been updated to conform to the current year presentation.
For the Year Ended December 31 2023 2022 Change General and administrative expenses (a) $ 302.6 $ 217.2 39.3 % Sales and marketing expenses 174.0 156.9 10.9 % Research and development expenses 102.6 96.5 6.3 % Gain on sale of long-lived assets (0.1) (16.3) (99.4) % Total operating expenses $ 579.1 $ 454.3 27.5 % By Segment: Motion Technologies $ 173.7 $ 140.9 23.3 % Industrial Process 207.6 150.0 38.4 % Connect & Control Technologies 144.1 119.6 20.5 % Corporate & Other 53.7 43.8 22.6 % (a) The prior year presentation has been updated to conform to the current year presentation. 29 General and administrative (G&A) expenses increased $85.4 for the year ended December 31, 2023.
Revenue Segment Operating Income Segment Operating Margin EPS $2,988 $512 17.1% $4.40 8% Increase 10% Increase 20bp Increase 21% Increase Organic Revenue Adjusted Segment Operating Income Adjusted Segment Operating Margin Adjusted EPS $3,102 $514 17.2% $4.44 12% Increase 8% Increase Flat 10% Increase See the section titled " Key Performance Indicators and Non-GAAP Measures " for a definition and reconciliation of organic revenue, adjusted segment operating income, adjusted segment operating margin, and adjusted EPS.
Revenue Operating Income Operating Margin EPS $3,283 $528 16.1% $4.97 10% Increase 13% Increase 40bp Increase 13% Increase Organic Revenue Adjusted Operating Income Adjusted Operating Margin Adjusted EPS $3,229 $555 16.9% $5.21 8% Increase 17% Increase 100bp Increase 17% Increase See the section titled " Key Performance Indicators and Non-GAAP Measures " for a definition and reconciliation of organic revenue, adjusted operating income, adjusted operating margin, and adjusted EPS.
As of December 31 2022 2021 Current portion of long-term debt $ 2.2 $ 2.2 Non-current portion of long-term debt 7.7 9.9 Total long-term debt $ 9.9 $ 12.1 See Note 15, Debt , for further information.
As of December 31 2023 2022 Current portion of long-term debt $ 2.3 $ 2.2 Non-current portion of long-term debt 5.7 7.7 Total long-term debt $ 8.0 $ 9.9 See Note 15, Debt , for further information. Term Loan On January 12, 2024, ITT Italia S.r.l.
We have been able to offset most of these negative impacts through pricing actions and productivity savings, which we continue to pursue. 27 DISCUSSION OF FINANCIAL RESULTS 2022 VERSUS 2021 For the Year Ended December 31 2022 2021 Change Revenue $ 2,987.7 $ 2,765.0 8.1 % Gross profit 922.3 899.5 2.5 % Operating expenses 454.3 395.2 15.0 % Operating income 468.0 504.3 (7.2) % Interest and non-operating expense (income), net 6.2 (4.8) (229.2) % Income tax expense 91.1 189.6 (52.0) % Income from continuing operations attributable to ITT Inc. 368.3 314.8 17.0 % Net income attributable to ITT Inc. $ 367.0 $ 316.3 16.0 % Gross margin 30.9 % 32.5 % (160) bp Operating expense to revenue ratio 15.2 % 14.3 % 90 bp Operating margin 15.7 % 18.2 % (250) bp Effective tax rate 19.7 % 37.2 % (1,750) bp All comparisons included within the Discussion of Financial Results for 2022 versus 2021 refer to results for the year ended December 31, 2022 compared to the year ended December 31, 2021, unless stated otherwise.
DISCUSSION OF FINANCIAL RESULTS 2023 VERSUS 2022 For the Year Ended December 31 2023 2022 Change Revenue $ 3,283.0 $ 2,987.7 9.9 % Gross profit 1,107.3 922.3 20.1 % Operating expenses 579.1 454.3 27.5 % Operating income 528.2 468.0 12.9 % Interest and other non-operating expense, net 8.7 6.2 40.3 % Income tax expense 104.8 91.1 15.0 % Income from continuing operations attributable to ITT Inc. 411.4 368.3 11.7 % Net income attributable to ITT Inc. $ 410.5 $ 367.0 11.9 % Gross margin 33.7 % 30.9 % 280 bp Operating expense to revenue ratio 17.6 % 15.2 % 240 bp Operating margin 16.1 % 15.7 % 40 bp Effective tax rate 20.2 % 19.7 % 50 bp All comparisons included within the Discussion of Financial Results for 2023 versus 2022 refer to results for the year ended December 31, 2023 compared to the year ended December 31, 2022, unless stated otherwise.
Payments Due By Period Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Long-term debt $ 9.9 $ 2.2 $ 4.5 $ 3.2 $ — Operating leases 89.5 21.6 32.1 20.4 15.4 Purchase obligations (a) 109.3 98.3 11.0 — — Postretirement benefit payments (b) 149.4 12.4 21.9 20.4 94.7 Other long-term obligations (c) 68.9 6.1 17.7 6.0 39.1 Total $ 427.0 $ 140.6 $ 87.2 $ 50.0 $ 149.2 In addition to the amounts presented in the table above, we have recorded liabilities for uncertain tax positions of $3.8 in our Consolidated Balance Sheet as of December 31, 2022.
Payments Due By Period Total 2024 2025 to 2026 2027 to 2028 Beyond 2029 Long-term debt $ 8.0 $ 2.3 $ 4.7 $ 1.0 $ — Operating leases 104.9 23.1 37.1 21.7 23.0 Purchase obligations (a) 133.2 120.0 10.5 — 2.7 Postretirement benefit payments (b) 150.2 11.7 20.9 20.0 97.6 Other long-term obligations (c) 68.5 8.6 18.1 6.3 35.5 Total $ 464.8 $ 165.7 $ 91.3 $ 49.0 $ 158.8 In addition to the amounts presented in the table above, we have recorded liabilities for uncertain tax positions of $5.7 in our Consolidated Balance Sheet as of December 31, 2023.
Operating income $ 208.5 $ 187.6 $ 115.8 $ 511.9 $ (43.9) $ 468.0 Gain on sale of long-lived assets (a) — (15.5) — (15.5) — (15.5) Impacts related to Russia-Ukraine war 3.1 4.8 — 7.9 — 7.9 Restructuring costs 2.7 1.3 — 4.0 (0.2) 3.8 Acquisition-related costs — 3.2 — 3.2 0.5 3.7 Asset impairment charges — — — — 1.7 1.7 Other (b) 1.3 1.2 — 2.5 1.7 4.2 Adjusted operating income (loss) $ 215.6 $ 182.6 $ 115.8 $ 514.0 $ (40.2) $ 473.8 Operating margin 15.2 % 19.3 % 17.9 % 17.1 % 15.7 % Adjusted operating margin 15.7 % 18.8 % 17.9 % 17.2 % 15.9 % Year Ended December 31, 2021 Operating income $ 258.2 $ 126.8 $ 81.7 $ 466.7 $ 37.6 $ 504.3 Asbestos-related benefit, net — — — — (74.4) (74.4) Restructuring costs 3.9 3.1 2.4 9.4 0.2 9.6 Other (c) — 0.6 — 0.6 2.5 3.1 Adjusted operating income (loss) $ 262.1 $ 130.5 $ 84.1 $ 476.7 $ (34.1) $ 442.6 Operating margin 18.9 % 15.0 % 14.7 % 16.9 % 18.2 % Adjusted operating margin 19.2 % 15.5 % 15.2 % 17.2 % 16.0 % (a) 2022 includes a gain of $14.7 related to the sale of a former operating facility that was previously held by a business within our IP segment.
Operating income (loss) $ 230.8 $ 243.6 $ 107.5 $ (53.7) $ 528.2 Loss on sale of business (a) — — 15.3 — 15.3 Restructuring costs 4.0 4.6 1.3 — 9.9 Impacts related to Russia-Ukraine war 1.3 1.2 — — 2.5 Acquisition- and divestiture-related costs — — 2.4 — 2.4 Other (b) 0.1 — (0.1) (3.7) (3.7) Adjusted operating income (loss) $ 236.2 $ 249.4 $ 126.4 $ (57.4) $ 554.6 Operating margin 15.8 % 21.6 % 15.4 % 16.1 % Adjusted operating margin 16.2 % 22.1 % 18.1 % 16.9 % Year Ended December 31, 2022 Operating income (loss) $ 208.5 $ 187.6 $ 115.8 $ (43.9) $ 468.0 Gain on sale of long-lived assets (c) — (15.5) — — (15.5) Impacts related to the Russia-Ukraine war 3.1 4.8 — — 7.9 Restructuring costs 2.7 1.3 — (0.2) 3.8 Acquisition-related costs — 3.2 — 0.5 3.7 Asset impairment charges — — — 1.7 1.7 Other (d) 1.3 1.2 — 1.7 4.2 Adjusted operating income (loss) $ 215.6 $ 182.6 $ 115.8 $ (40.2) $ 473.8 Operating margin 15.2 % 19.3 % 17.9 % 15.7 % Adjusted operating margin 15.7 % 18.8 % 17.9 % 15.9 % (a) Relates to the sale of our Matrix business in December 2023.
For the Year Ended December 31 2022 2021 Operating activities $ 277.7 $ (8.4) Investing activities (255.1) (82.3) Financing activities (83.3) (99.8) Foreign exchange (25.8) (22.6) Total net cash used in continuing operations $ (86.5) $ (213.1) Net cash from discontinued operations 0.1 0.8 Net change in cash and cash equivalents $ (86.4) $ (212.3) Operating Activities The increase in net cash from operating activities of $286.1 was primarily due to the prior year payment of $398.0 to fund the asbestos-related divestiture and higher segment operating income.
For the Year Ended December 31 2023 2022 Operating activities $ 538.0 $ 277.7 Investing activities (181.0) (255.1) Financing activities (432.3) (83.3) Foreign exchange 3.6 (25.8) Total net cash used in continuing operations $ (71.7) $ (86.5) Net cash from discontinued operations (0.3) 0.1 Net change in cash and cash equivalents $ (72.0) $ (86.4) Operating Activities The increase in net cash from operating activities of $260.3 was primarily driven by favorable net working capital impacts primarily due to improved inventory management and timing of accounts receivable collections, higher operating income, and lower incentive-based compensation payments related to the prior year.
The increase was partially offset by a decline in pump project revenue of 15%, primarily within the chemical market. The level of order and shipment activity at IP can vary significantly from period to period due to pump projects which are highly engineered, customized to customer needs, and have longer lead times.
Excluding the impacts from acquisition and foreign currency translation, organic revenue increased $138.9. The level of order and shipment activity at IP can vary significantly from period to period due to pump projects which are highly engineered, customized to customer needs, and have longer lead times.
The increase in gross profit was primarily driven by an increase in revenue, described above, partially offset by increases in raw material, overhead and labor costs, which were driven by inflationary pressures as discussed above. In addition, the current year included costs incurred related to the Russia-Ukraine war, including inventory write-downs.
The increases in gross profit and gross margin were primarily driven by an increase in revenue, described above in the section titled "R evenue" , partially offset by increases in raw material, labor, and overhead costs, which were driven by inflationary pressures during the year, as discussed above in the section titled "Global Macroeconomic Conditions" .
As of December 31 2022 2021 Commercial Paper Outstanding - U.S. Program $ 299.2 $ 150.0 Commercial Paper Outstanding - Euro Program 149.1 45.4 Total Commercial Paper Outstanding $ 448.3 195.4 The increase in commercial paper outstanding from December 31, 2021 to December 31, 2022 was primarily related to share repurchase activity and the Habonim acquisition.
Program $ 184.9 $ 299.2 Commercial Paper Outstanding - Euro Program — 149.1 Total Commercial Paper Outstanding $ 184.9 448.3 The decrease in commercial paper outstanding from December 31, 2022 to December 31, 2023 was primarily related to higher share repurchase and acquisition activity in the prior year that was financed using commercial paper, and timing of repayments.
Qualified Pension Plan termination funding. In addition, both years include accelerated amortization expense of an intangible asset. 40 CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements and related disclosures in accordance with GAAP requires us to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
See Note 6, Income Taxes , to the Consolidated Financial Statements for further information. 40 CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements and related disclosures in accordance with GAAP requires us to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
For the Year Ended December 31 2022 2021 Change Interest expense (income), net $ 6.4 $ (1.1) (681.8) % Non-operating postretirement costs (benefit), net 1.1 (1.3) (184.6) % Miscellaneous income, net (1.3) (2.4) (45.8) % Total interest and non-operating expense (income), net $ 6.2 $ (4.8) (229.2) % The increase in interest and non-operating expense for the year ended December 31, 2022 is primarily due to higher interest expense associated with greater outstanding commercial paper borrowings and a higher average interest rate.
For the Year Ended December 31 2023 2022 Change Interest expense $ 19.2 $ 10.9 76.1 % Interest income (8.8) (4.5) 95.6 % Non-operating postretirement (benefit) costs, net (0.4) 1.1 136.4 % Other non-operating income, net (1.3) (1.3) — % Total interest and other non-operating expense, net $ 8.7 $ 6.2 40.3 % The increase in interest and other non-operating expense, net for the year ended December 31, 2023 was primarily due to higher interest expense associated with a higher average interest rate on our commercial paper borrowings, and $1.4 of interest expense related to a tax audit settlement in Italy, as discussed below in the section titled "Income Tax Expense".
The increase was primarily due to higher segment operating income, as discussed above, and lower share count resulting from an increase in open-market share repurchases. In addition, the prior year included an after-tax loss of $28.1 from the divestiture of our legacy net asbestos liability.
The increase was primarily due to higher operating income, as discussed above, and lower share count resulting from open-market share repurchases executed during the year.
Our credit ratings as of December 31, 2022 were as follows: Rating Agency Short-Term Ratings Long-Term Ratings Standard & Poor’s A-2 BBB Moody’s Investors Service P-2 Baa2 Fitch Ratings F2 BBB+ There were no changes to our credit ratings during 2022. Please refer to the rating agency websites and press releases for more information.
Our credit ratings as of December 31, 2023 were as follows: Rating Agency Short-Term Ratings Long-Term Ratings Standard & Poor’s A-2 BBB Moody’s Investors Service P-2 Baa2 Fitch Ratings F1 BBB+ In December 2023, Fitch Ratings upgraded ITT's short-term ratings, which include its Short-term Issuer Default rating and Commercial Paper rating, from F2 to F1.
Future impacts on our business and financial results as a result of these conditions are not estimable at this time and depend, in part, on the extent to which these conditions improve or worsen. For additional discussion of the risks related to general macroeconomic conditions, see Part I, Item 1A, Risk Factors , herein.
We have been able to offset most of these negative impacts through pricing actions and productivity savings, which we continue to pursue. Future impacts on our business and financial results as a result of these conditions are not estimable at this time, and depend, in part, on the extent to which these conditions improve or worsen, which remains uncertain.
For additional discussion of the risks related to the Russia-Ukraine war, see Part I, Item 1A, Risk Factors , herein. 26 COVID-19 Pandemic The Company continues to actively monitor the ongoing impacts of COVID-19.
For additional discussion of the risks related to global macroeconomic conditions, see Part I, Item 1A, Risk Factors , herein.
For additional discussion of risks related to COVID-19, see Part I, Item 1A, Risk Factors , herein. Inflationary Pressures Since 2020, the cost of energy and raw materials we use in our production processes, including commodities such as steel, oil, copper, and tin, have significantly increased.
Inflationary Pressures Since 2020, the cost of energy and raw materials we use in our production processes, including commodities such as steel, oil, copper, and tin, have significantly increased. The rising prices are primarily due to reduced supply caused by supply chain disruptions primarily stemming from the COVID-19 pandemic and the ongoing Russia-Ukraine war.
Our backlog represents firm orders that have been received, acknowledged, and entered into our production systems. Connect & Control Technologies CCT revenue for the year ended December 31, 2022 increased $90.9. Excluding the unfavorable foreign currency impact of $18.3, organic revenue increased $109.2 primarily driven by higher volume and improved price recovery.
Our backlog represents firm orders that have been received, acknowledged, and entered into our production systems. Connect & Control Technologies CCT revenue for the year ended December 31, 2023 increased $53.8 primarily driven by pricing actions and higher sales volume. Specifically, component sales grew 21%, primarily within the aerospace and defense markets, while connector sales grew 1%.
The increase was partially offset by unfavorable raw material costs, product mix and foreign currency impacts. Other corporate costs, net, increased $7.1 for the year ended December 31, 2022.
The increase was partially offset by higher raw material, labor and overhead costs, as well as unfavorable foreign currency impacts and product mix.
The increase was primarily driven by higher strategic investment-related costs, lower corporate-owned life insurance (COLI) investment gains and a $1.7 asset impairment charge related to the relocation of the Company’s corporate headquarters. The increase was partially offset by lower incentive-based compensation costs. 31 INTEREST AND NON-OPERATING EXPENSE (INCOME), NET The following table summarizes our interest and non-operating expense (income), net.
The prior year period also included a $1.7 asset impairment charge related to the relocation of the Company’s corporate headquarters. 30 INTEREST AND OTHER NON-OPERATING EXPENSE (INCOME), NET The following table summarizes our interest and other non-operating expense (income), net.
In the first quarter of 2023, we declared a quarterly dividend of $0.29 per share for shareholders of record on March 9, 2023, which will be paid on April 3, 2023.
In the first quarter of 2024, we declared a quarterly dividend of $0.319 per share for shareholders of record on March 8, 2024, which will be paid on April 1, 2024. Open-market Share Repurchases On October 30, 2019, the Board of Directors approved our current program, an indefinite term $500 open-market share repurchase program (the 2019 Plan).
Contributions to our U.S. and non-U.S. pension and other postretirement plans were $11.0 and $10.5 during 2022 and 2021, respectively, which were used to fund participant benefits. We currently estimate 2023 contributions to our pension and other postretirement benefits plans of approximately $13.
Our other employee-related benefit plans are generally unfunded plans as well. The projected benefit obligation of these plans declined by $4.5 during 2023 primarily due to a decrease in the discount rate. Contributions to our U.S. and non-U.S. pension and other postretirement plans were $9.5 and $11.0 during 2023 and 2022, respectively, which were used to fund participant benefits.
See Note 6, Income Taxes , to Consolidated Financial Statements for further information. 2022 2021 Charge on undistributed foreign earnings $ (0.3) $ 4.0 Change in deferred tax asset valuation allowance (1.2) (1.9) Change in uncertain tax positions (0.7) (15.3) Other (0.1) 2.7 Net tax-related special items $ (2.3) $ (10.5) (c) Other special items for 2022 consists primarily of employee severance expense, while 2021 consists primarily of a benefit from the finalization of the U.S.
(e) 2023 tax-related special items include benefits from valuation allowance reversals of $(16.4), a settlement expense primarily related to a tax audit in Italy of $14.4, the tax impact on distributions of $7.5, a benefit related to the amendment of our federal tax return of $(4.9), and other of $(2.6). 2022 tax-related special items include a benefit related to a change in deferred tax asset valuation allowance of $(1.2), a benefit related to a change in uncertain tax positions of $(0.7), a tax benefit on future distribution of foreign earnings of $(0.3), and other of $(0.1).
For the Year Ended December 31 2022 2021 Change Motion Technologies $ 208.5 $ 258.2 (19.2) % Industrial Process 187.6 126.8 47.9 % Connect & Control Technologies 115.8 81.7 41.7 % Segment operating income 511.9 466.7 9.7 % Asbestos-related benefit, net — 74.4 (100.0) % Other corporate costs (43.9) (36.8) 19.3 % Total corporate and other (costs) benefit, net (43.9) 37.6 (216.8) % Total operating income $ 468.0 $ 504.3 (7.2) % Operating margin: Motion Technologies 15.2 % 18.9 % (370) bp Industrial Process 19.3 % 15.0 % 430 bp Connect & Control Technologies 17.9 % 14.7 % 320 bp Segment operating margin 17.1 % 16.9 % 20 bp Consolidated operating margin 15.7 % 18.2 % (250) bp MT operating income for the year ended December 31, 2022 decreased $49.7 primarily due to higher raw material, overhead and labor costs, as well as unfavorable foreign currency impacts and product mix.
For the Year Ended December 31 2023 2022 Change Motion Technologies $ 230.8 $ 208.5 10.7 % Industrial Process 243.6 187.6 29.9 % Connect & Control Technologies 107.5 115.8 (7.2) % Corporate & Other (53.7) (43.9) 22.3 % Total operating income $ 528.2 $ 468.0 12.9 % Operating Margin: Motion Technologies 15.8 % 15.2 % 60 bp Industrial Process 21.6 % 19.3 % 230 bp Connect & Control Technologies 15.4 % 17.9 % (250) bp Consolidated ITT 16.1 % 15.7 % 40 bp MT operating income for the year ended December 31, 2023 increased $22.3 primarily due to higher revenue, as discussed above, productivity savings, and lower charges related to the suspension of business in Russia.
For the Year Ended December 31 2022 2021 Change Income tax expense $ 91.1 $ 189.6 (52.0) % Effective tax rate 19.7 % 37.2 % (1,750) bps The lower effective tax rate in 2022 compared to 2021 resulted from the Company recording tax expense in 2021 on the reversal of previously recorded deferred tax assets of $116.9 related to the Company's divestiture of the entity holding asbestos-related assets and liabilities.
For the Year Ended December 31 2023 2022 Change Income tax expense $ 104.8 $ 91.1 15.0 % Effective tax rate 20.2 % 19.7 % 50 bps The higher effective tax rate in 2023 compared to 2022 resulted from the Company recording tax expense in 2023 of $14.2 relating to a tax audit in Italy covering tax years 2016-2022.
Motion Technologies MT revenue for the year ended December 31, 2022 increased $5.4. Excluding the unfavorable foreign currency translation impact of $114.4, organic revenue increased $119.8 primarily due to improved price recovery and higher volume. Our Friction business grew 12% driven by strong OEM outperformance, and our Wolverine business grew 9% driven by strength in sealing materials.
Motion Technologies MT revenue for the year ended December 31, 2023 increased $83.8 primarily driven by higher sales volume and pricing actions. Our Friction business grew 6% due to strong OEM demand. Additionally, our KONI and Axtone businesses grew 6% and 10%, respectively.
Refer to Note 23, Acquisitions and Investments , for further information. In addition, capital expenditures increased by $15.5 over the prior year. Financing Activities The decrease in net cash used in financing activities of $16.5 was primarily driven by an increase in net commercial paper borrowings of $164.3.
Refer to Note 22, Acquisitions, Investments, and Divestitures , and Note 11, Plant, Property and Equipment, Net , for further information. Financing Activities The decrease in net cash from financing activities of $349.0 was primarily driven by a higher cash outflows of $525.7 associated with commercial paper borrowings due to timing of repayments.
This was partially offset by increases in repurchases of ITT common stock of $140.5 and dividends paid of $12.1.
This was partially offset by lower cash outflows of $185.3 related to repurchases of ITT common stock.
Open-market Share Repurchases On October 30, 2019, the Board of Directors approved our current program, an indefinite term $500 open-market share repurchase program (the 2019 Plan) under which $139 remains available. During the years ended December 31, 2022 and December 31, 2021, we spent $245.3 and $104.8, respectively, on open-market share repurchases under our share repurchase programs.
All repurchased shares are retired immediately following the repurchases. During the years ended December 31, 2023 and 2022, we spent $60.0 and $245.3, respectively, on open-market share repurchases under the 2019 Plan. As of December 31, 2023, there was $78.8 of remaining authorization left under the 2019 Plan.
General and administrative (G&A) expenses decreased $9.7 for the year ended December 31, 2022. The decrease was primarily due to lower incentive-based compensation costs and favorable foreign currency impacts. The decrease was partially offset by higher bad debt and M&A-related costs and lower corporate-owned life insurance investment gains.
Within Corporate & Other, corporate costs, net, increased $9.8 for the year ended December 31, 2023, primarily driven by higher personnel-related costs, including incentive-based compensation. The increase was partially offset by income of $3.7 from a recovery of costs associated with the 2020 lease termination of a legacy site as well as by higher corporate-owned life insurance investment gains.
The manufacturing industry is also currently experiencing a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs and backlog. During 2022, central banks around the world have been raising interest rates to counter inflation.
The manufacturing industry continues to experience a skilled labor shortage, which has created difficulties in attracting and retaining factory employees and has resulted in higher labor costs. 27 Global macroeconomic conditions have led and may continue to lead to decreased demand for our products, increased costs, and reduced operating margins.
The increase was partially offset by higher raw material, overhead, and labor costs and unfavorable foreign currency impacts resulting from challenging global macroeconomic conditions. 25 • Income from continuing operations was $4.40 per diluted share, an increase of $0.76 as compared to the prior year.
The increase was partially offset by higher labor and overhead costs, and unfavorable foreign currency impacts. The prior year period also benefited from a non-recurring gain of $15.5 related to the sale of facilities.
IP operating income for the year ended December 31, 2022 increased $60.8. The increase in operating income was primarily driven by improved price recovery, productivity savings and higher volume. The increase was partially offset by higher raw material, overhead and labor costs, as well as unfavorable foreign currency impacts.
The increase in operating income was partially offset by higher labor, raw material and overhead costs, unfavorable foreign currency impacts and product mix, a loss of $15.3 on the sale of our Matrix Composites, Inc.
Sales and marketing expenses increased $6.1 for the year ended December 31, 2022. The increase was primarily driven by the acquisition of Habonim and the discontinuation in 2022 of temporary spending controls in place in 2021 in response to the COVID-19 pandemic. Research and development (R&D) expenses increased $1.6 for the year ended December 31, 2022.
Research and development (R&D) expenses increased $6.1 for the year ended December 31, 2023, primarily driven by higher personnel costs to support investments in innovation and new product development. Gain on sale of long-lived assets decreased by $16.2 for the year ended December 31, 2023.
Rising interest rates have increased our cost of debt and may adversely impact customer behavior, including demand for our products. These conditions have contributed to a strengthening of the U.S. dollar relative to foreign currencies, which has resulted in unfavorable foreign currency translation impacts.
Beginning in 2022, central banks around the world have been raising interest rates to counter inflation. Rising interest rates increased our cost of debt and contributed to instability in the global banking system during 2023, which has impacted consumer behavior, including demand for our products.
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Our 2022 results include: • Revenue of $2,987.7 increased $222.7, despite unfavorable foreign currency impacts of $160.9. Organic revenue increased 12.2% due to strong growth in MT’s Friction and IP’s short-cycle businesses, higher volume in CCT’s connectors and components, and price recovery across all segments.
Added
Our 2023 results include: • Revenue of $3,283.0 increased $295.3 due to higher sales volume and pricing actions, particularly within IP's aftermarket business, MT's Friction OE business, and CCT's components business. In addition, our 2023 results benefited by $30.5 from our recent acquisitions of Habonim and Micro-Mode Products, Inc.
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In addition, revenue from the acquisition of Habonim Industrial Valves and Actuators Ltd (Habonim) contributed $46.5 to total revenue growth. • Segment operating income of $511.9 increased $45.2, due to price recovery, productivity savings, higher sales volume and higher gain on sales of long-lived assets.
Added
("Micro-Mode"), and by $23.1 from favorable foreign currency translation. • Operating income of $528.2 increased $60.2, primarily due to higher revenue, productivity savings, a gain of $7.2 on the sale of a product line within our CCT segment, lower charges related to the suspension of business in Russia, and the accretive impact of our recent acquisitions of Habonim and Micro-Mode.
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Throughout 2022, we faced unprecedented challenges stemming from continued supply chain disruptions, inflation, foreign currency headwinds, COVID-19 lockdowns and the Russia-Ukraine war. We overcame these challenges through a relentless focus on our strategic priorities, which included price recovery and productivity.
Added
("Matrix") business, and a prior year gain of $15.5 on the sale of facilities within our IP segment. 26 • Income from continuing operations was $4.97 per diluted share, an increase of $0.57 as compared to the prior year.
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In addition, we remained committed to effective capital allocation, deploying $610 during the year, including the following: • We acquired Habonim, a leading provider of industrial valves and actuators, which expanded IP's valves business. • We invested in CRP Technology Srl and CRP USA LLC (collectively "CRP"), leaders in developing and manufacturing reinforced composite materials for 3D printing, which increases our additive manufacturing technology capabilities. • We increased our capital expenditures by 18% over the prior year primarily to fund capacity investments in our MT segment that will support the growth in electric vehicles and to drive further productivity. • We repurchased 3.0 shares of common stock on the open market for $245. • We paid out $88 in dividends to our shareholders.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeDuring 2022, there has been a rapid strengthening of the U.S. dollar against foreign currencies, including the euro and the Chinese renminbi, which has adversely impacted our financial results. Based on a sensitivity analysis, a hypothetical 10% change in the foreign currency exchange rates for the year ended December 31, 2022 would have impacted our pre-tax earnings by approximately $33.
Biggest changeBased on a sensitivity analysis, a hypothetical 10% change in the foreign currency exchange rates for the year ended December 31, 2023 would have impacted our pre-tax earnings by approximately $38.
Changes in interest rates affect the interest 44 earned on the Company’s cash and cash equivalents, derivative financial instruments and the fair value of those instruments, as well as costs associated with hedging and interest paid on the Company’s outstanding debt. During 2022, central banks around the world raised interest rates to counter inflation.
Changes in interest rates affect the interest earned on the Company’s cash and cash equivalents, derivative financial instruments and the fair value of those instruments, as well as costs associated with hedging and interest paid on the Company’s outstanding debt. 44 During 2023, central banks around the world raised interest rates to counter inflation.
Assuming all other variables remain constant, we estimate that a hypothetical 10% change in steel prices, excluding any impact of purchased component parts, would impact pre-tax earnings by approximately $10 to $12. We estimate that a hypothetical 10% change in prices for any other commodity would not be material to our financial statements.
Assuming all other variables remain constant, we estimate that a hypothetical 10% change in steel prices, excluding any impact of purchased component parts, would impact pre-tax earnings by approximately $8 to $10. We estimate that a hypothetical 10% change in prices for any other commodity would not be material to our financial statements.
Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. Our principal currency exposures relate to the euro, Chinese renminbi, Czech koruna, South Korean won, Saudi riyal and Hong Kong dollar.
Our foreign currency exchange rate risk relates to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. Our principal currency exposures relate to the euro, Chinese renminbi, Czech koruna, South Korean won, and Saudi riyal.
As of December 31, 2022, our outstanding commercial paper was $448.3, with a weighted average interest rate of 4.03%. We estimate that a hypothetical increase in interest rates of 100 basis points would result in approximately $4.5 of additional annual interest expense based on current borrowing levels.
As of December 31, 2023, our outstanding commercial paper was $184.9, with a weighted average interest rate of 5.61%. We estimate that a hypothetical increase in interest rates of 100 basis points would result in approximately $1.9 of additional annual interest expense based on current borrowing levels.
In addition, the Russia-Ukraine war and China's reopening after lifting various COVID-19 safety measures during 2022 have exacerbated inflationary pressures on commodity prices. The impact of higher commodity prices on our financial results during 2022 was partially mitigated by fixed-price supply contracts with suppliers as well as improved price recovery.
In addition, heightened geopolitical tensions during 2023, including as a result of the Russia-Ukraine war, have exacerbated inflationary pressures on commodity prices. The impact of higher commodity prices on our financial results during 2023 was partially mitigated by fixed-price supply contracts with suppliers as well as by pricing actions.

Other ITT 10-K year-over-year comparisons