ITT Corporation Announces Plea Agreement in its Night Vision Business - Company agrees to pay $50 million fine and invest $50 million in night

vision technology

- Comprehensive export compliance audit, monitoring and training effort

significantly enhanced

- Settlement payment is covered by previous reserves



    WHITE PLAINS, N.Y., March 27 /PRNewswire-FirstCall/ -- ITT Corporation
 today announced a final settlement relating to an investigation that began
 in 2001 regarding ITT Night Vision's compliance with International Traffic
 in Arms Regulations (ITAR). As part of the agreement, the company will pay
 a $50 million fine, and will plead guilty to one ITAR violation relating to
 the improper handling of sensitive documents, and one ITAR violation of
 making misleading statements. The government has agreed to defer action
 regarding a third count of ITAR violations pending ITT's implementation of
 remedial actions.
     The Company has agreed with the government to continue to invest in
 research and development and capital improvements for its night vision
 products so it can continue to provide the most advanced night vision
 technology to the U.S. military and its allies. The value of these
 investments is $50 million over the next five years. In addition, the
 company has been engaged in a comprehensive review of its policies,
 practices, training programs and procedures, including complete audits of
 all business units. New monitoring approaches, communications and training
 initiatives have already begun as a result of this review and more are
 expected. As announced in December, the financial impact of the fine is
 fully covered by previous reserves, including a $25 million charge to net
 income that was taken in the fourth quarter of 2006.
     "We have been cooperating with the government in this investigation and
 we have voluntarily disclosed all discrepancies that our internal reviews
 revealed," said Steven R. Loranger, chairman, president and chief executive
 officer of ITT Corporation. "While this settlement relates to the actions
 of a few individuals in one of our 15 business units, we regret very much
 that these serious violations occurred. I want to reinforce, however, that
 the heart of our night vision goggles -- the tube -- is secure. No
 technical information regarding the tube was ever compromised."
     Loranger added, "Our renewed commitment to a culture of integrity and
 compliance applies to the entire company. ITT has a long track record as a
 trusted employer, supplier and partner, and we are firmly committed to
 ensuring that this will not happen again. These violations have made it
 clear that we had gaps in our compliance programs. The steps we are taking
 now will address these issues in a comprehensive way."
     The company has already begun implementing stricter new measures such as:
 
       * Insuring that all personnel understand and follow applicable
         regulations governing the export of critical technology
       * Naming a new compliance officer
       * Instituting a required ethics and compliance training program for all
         employees worldwide
       * Developing a comprehensive computer tracking program to monitor all
         packages sent from ITT facilities
       * Working with independent experts to refine and enhance the
         effectiveness of these measures.
     In a related action, the Department of State has placed restrictions on
 certain exports of night vision equipment and technical data and ITT Night
 Vision will not be allowed to ship devices to specific parties for a period
 of not less than one year. ITT estimates that this restriction will apply
 to less than five percent of its total Night Vision sales. The restriction
 will not affect any of ITT's other business units, and the company remains
 confident in its financial forecast for 2007 released in December of 2006
 and updated in February of this year.
     "ITT plays a vital role in national and international security through
 its defense products, space and related services. We recognize that any
 company that supplies high technology equipment to the Defense Department
 bears a special responsibility," Loranger said. "We will meet this
 obligation with the compliance measures we've already instituted and the
 additional reforms to be put in place as part of this agreement."
     About ITT Corporation
     ITT Corporation (http://www.itt.com) supplies advanced technology
 products and services in several growth markets. ITT is a global leader in
 the transport, treatment and control of water, wastewater and other fluids.
 The company plays a vital role in international security through its
 defense communications and electronics products; space surveillance and
 intelligence systems; and advanced engineering and related services. It
 also serves the growing leisure marine and electronic connectors markets
 with a wide range of products. Headquartered in White Plains, N.Y., the
 company generated $7.8 billion in 2006 sales. In addition to the New York
 Stock Exchange, ITT Corporation stock is traded on the Paris, London and
 Frankfurt exchanges.
     "Safe Harbor Statement" under the Private Securities Litigation Reform
 Act of 1995 ("the Act"):
     Certain material presented herein includes forward-looking statements
 intended to qualify for the safe harbor from liability established by the
 Act. These forward-looking statements include statements that describe the
 Company's business strategy, outlook, objectives, plans, intentions or
 goals, and any discussion of future operating or financial performance.
 Whenever used, words such as "anticipate," "estimate," "expect," "project,"
 "intend," "plan," "believe," "target" and other terms of similar meaning
 are intended to identify such forward-looking statements. Forward-looking
 statements are uncertain and to some extent unpredictable, and involve
 known and unknown risks, uncertainties and other important factors that
 could cause actual results to differ materially from those expressed in, or
 implied from, such forward-looking statements. Factors that could cause
 results to differ materially from those anticipated by the Company include
 general global economic conditions, decline in consumer spending, interest
 and foreign currency exchange rate fluctuations, availability of
 commodities, supplies and raw materials, competition, acquisitions or
 divestitures, changes in government defense budgets, employment and pension
 matters, contingencies related to actual or alleged environmental
 contamination, claims and concerns, intellectual property matters, personal
 injury claims, governmental investigations, tax obligations, and changes in
 generally accepted accounting principles. Other factors are more thoroughly
 set forth in Item 1. Business, Item 1A. Risk Factors, and Item 7.
 Management's Discussion and Analysis of Financial Condition and Results of
 Operations -- Forward-Looking Statements in the ITT Corporation Annual
 Report on Form 10-K for the fiscal year ended December 31, 2006, and other
 of its filings with the Securities and Exchange Commission. The Company
 undertakes no obligation to update any forward-looking statements, whether
 as a result of new information, future events or otherwise.
 
 

SOURCE ITT Corporation
RELATED LINKS
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