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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED ____________________
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM DECEMBER 19, 1995 TO DECEMBER 31,1995
COMMISSION FILE NUMBER 1-13960
ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
ITT CORPORATION
1330 AVENUE OF THE AMERICAS, NEW YORK, N.Y. 10019
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Investment and Savings Plan Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
ITT Corporation Investment and
Savings Plan for Salaried Employees
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(Name of Plan)
Date June 28, 1996
/s/ ANNE C. SILVERMAN
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(Signature)
(ANNE C. SILVERMAN,
Savings Plan Administrator)
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
DECEMBER 31, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE(S)
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<S> <C>
Report of Independent Public Accountants............................................ 4
Financial Statements:
Statement of Net Assets Available for Plan Benefits as of December 31, 1995....... 5
Statement of Changes in Net Assets Available for Plan Benefits for the
period December 19, 1995 through December 31, 1995............................. 6
Notes to Financial Statements....................................................... 7-10
Exhibit Index....................................................................... 11
Exhibit 23 -- Consent of Independent Public Accountants............................. 12
</TABLE>
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NOTE: All ERISA schedules are omitted because there is no activity applicable
for the period December 19, 1995 through December 31, 1995.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To ITT Corporation:
We have audited the accompanying statement of net assets available for plan
benefits of the ITT Corporation Investment and Savings Plan for Salaried
Employees as of December 31, 1995, and the related statement of changes in net
assets available for plan benefits for the period December 19, 1995 (inception
date) through December 31, 1995. These financial statements are the
responsibility of the Plan Administrator. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the ITT
Corporation Investment and Savings Plan for Salaried Employees as of December
31, 1995, and the changes in net assets available for plan benefits for the
period December 19, 1995 (inception date) through December 31, 1995 in
conformity with generally accepted accounting principles.
New York, New York /s/ ARTHUR ANDERSEN LLP
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June 24, 1996 ARTHUR ANDERSEN LLP
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1995
($ IN THOUSANDS)
<TABLE>
<CAPTION>
ITT
ITT FIXED INDUSTRIES ITT HARTFORD
COMMON STOCK INDEX INCOME BALANCED COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND FUND LOAN
TOTAL (FUND A) (FUND B) (FUND C) (FUND D) (FUND F) (FUND G) FUND
-------- ------------ --------- -------- -------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Receivable from ITT
Industries Investment and
Savings Plan.............. $170,960 $ 45,038 $ 23,010 $33,361 $ 4,351 $ 20,662 $ 41,116 $ 3,422
Contributions Receivable.... 1,488 930 241 235 76 2 4 --
Loan and Interest Repayments
pending transfer.......... 22 72 24 46 12 -- -- (132)
-------- ------- ------- ------- ------ ------- ------- ------
Total Assets......... 172,470 46,040 23,275 33,642 4,439 20,664 41,120 3,290
-------- ------- ------- ------- ------ ------- ------- ------
LIABILITIES:
Accrued Transfer of
Investment Option......... -- 96 (57) (79) 40 -- -- --
Accrued Administrative
Expenses.................. (34) (9) (4) (7) (1) (4) (9) --
Participant Loans Payable... -- (25) (33) (61) (2) (11) (22) 154
-------- ------- ------- ------- ------ ------- ------- ------
Total Liabilities.... (34) 62 (94) (147) 37 (15) (31) 154
-------- ------- ------- ------- ------ ------- ------- ------
Net Assets Available for
Benefits.................... $172,436 $ 46,102 $ 23,181 $33,495 $ 4,476 $ 20,649 $ 41,089 $ 3,444
======== ======= ======= ======= ====== ======= ======= ======
</TABLE>
The accompanying notes are an integral part of this statement.
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE PERIOD DECEMBER 19, 1995 THROUGH DECEMBER 31, 1995
($ IN THOUSANDS)
<TABLE>
<CAPTION>
ITT
ITT FIXED INDUSTRIES ITT HARTFORD
COMMON STOCK INDEX INCOME BALANCED COMMON STOCK COMMON STOCK
FUND FUND FUND FUND FUND FUND LOAN
TOTAL (FUND A) (FUND B) (FUND C) (FUND D) (FUND F) (FUND G) FUND
--------- ------------ --------- -------- -------- ------------ ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to Net Assets
Attributed to:
Transfer in from ITT
Industries Investment and
Savings Plan at 12/19/95... $ 170,351 $ 43,598 $ 22,829 $33,282 $ 4,339 $ 21,500 $ 41,381 $ 3,422
Investment Income:
Net Realized
Appreciation............. 55 7 20 -- 2 8 18 --
Net Unrealized Appreciation
(Depreciation)........... 467 1,433 161 -- 4 (848) (283) --
Interest................... 3 -- -- -- 3 -- -- --
Dividends.................. 1 -- -- -- 1 -- -- --
Other...................... 83 -- -- 79 2 2 -- --
Interest on Participant
Loans...................... 22 10 4 6 2 -- -- --
Repayment of Participant
Loans...................... -- 62 20 40 10 -- -- (132)
Contributions:
Participants............... 1,033 477 241 233 76 2 4 --
Company.................... 455 453 -- 2 -- -- -- --
-------- ------- ------- ------- ------ ------- ------- ------
Total Contributions...... 1,488 930 241 235 76 2 4 --
-------- ------- ------- ------- ------ ------- ------- ------
Total Additions..... 172,470 46,040 23,275 33,642 4,439 20,664 41,120 3,290
-------- ------- ------- ------- ------ ------- ------- ------
Deductions from Net Assets
Attributed to:
Transfer of Investment
Options
(net)...................... -- 96 (57) (79) 40 -- -- --
Loans to Participants........ -- (25) (33) (61) (2) (11) (22) 154
Administrative Expenses...... (34) (9) (4) (7) (1) (4) (9) --
-------- ------- ------- ------- ------ ------- ------- ------
Total Deductions.... (34) 62 (94) (147) 37 (15) (31) 154
-------- ------- ------- ------- ------ ------- ------- ------
Net Increase................. 172,436 46,102 23,181 33,495 4,476 20,649 41,089 3,444
-------- ------- ------- ------- ------ ------- ------- ------
Net Assets Available for
Benefits :
Beginning of Period........ -- -- -- -- -- -- -- --
-------- ------- ------- ------- ------ ------- ------- ------
End of Period.............. $ 172,436 $ 46,102 $ 23,181 $33,495 $ 4,476 $ 20,649 $ 41,089 $ 3,444
======== ======= ======= ======= ====== ======= ======= ======
</TABLE>
The accompanying notes are an integral part of this statement.
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF THE PLAN:
On December 19, 1995 (the "Distribution date"), the former ITT Corporation
("Pre-Distribution ITT" which was renamed ITT Industries, Inc.) distributed to
its shareholders of record at the close of business on such date all of the
outstanding shares of common stock of ITT Corporation. In such distribution,
holders of common stock of the Pre-Distribution ITT, including the ITT
Industries, Inc. Investment and Savings Plan for Salaried Employees, received
one share of ITT Corporation common stock, one share of ITT Industries, Inc.
common stock and one share of ITT Hartford Group, Inc. common stock for each
share of Pre-Distribution ITT common stock held. Shares in these three companies
are held in Fund A, Fund F and Fund G, respectively. In connection with the
distribution, ITT Corporation (the "Corporation") established the ITT
Corporation Investment and Savings Plan for Salaried Employees (the "Plan") for
the purpose of continuing the participation of its salaried employees'
investment and savings arrangements under the Pre-Distribution ITT Plan.
The following description of the ITT Corporation Investment and Savings
Plan for Salaried Employees provides only general information. Participants
should refer to the Plan document for a more complete description of the Plan's
provisions. Information with regard to eligibility, contributions,
distributions, vesting, trustees, withdrawals, restoration, loans, fund
redistribution, and definitions of all terms are contained in that document.
General
The Plan is a defined contribution plan covering all full-time and some
part-time employees of the Corporation who have six months of service, or who
have fulfilled the requisite eligibility requirements for employees on a
temporary or less than full-time basis. All employees formerly eligible for
participation in the ITT Industries, Inc. Investment and Savings Plan for
Salaried Employees were immediately eligible for participation in the Plan. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
Contributions
A member may generally elect to contribute 2% to 16% of base salary. A
member (other than a member subject to Puerto Rico's income tax) may designate
his savings as Before-Tax Savings, After-Tax Savings, or any combination of the
two. A member who is a highly compensated employee may be limited to less than
16% due to the operation of certain tests required under the Internal Revenue
Code (the "Code").
An amount equal to 50% of a member's Basic Savings is matched by the
Corporation. Basic Savings are contributions up to the first 6% of base salary.
Member savings in excess of 6% of base salary are Supplemental Savings that are
not matched by company contributions. In addition, the Corporation allocates
1/2 of 1% of base salary to the Floor Company Contributions Account of each
eligible employee.
Matching company contributions are made in either cash or ITT Corporation
Stock and invested in Fund A. Under certain limited conditions these
contributions maybe invested in Fund C.
Administrative Expenses
The Trust pays for the administrative expenses of the Plan up to 0.25% of
the market value of trust assets. These expenses are limited to services
provided by unrelated vendors. The Corporation continues to pay Plan
administrative expenses which are not paid by the Trust.
Member Accounts
Each member's account is credited with the member's contribution and
allocations of (a) the Corporation's contribution and (b) Plan earnings, and
charged with an allocation of administrative expenses.
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Allocations are based on member account earnings or account balances, as
defined. The benefit to which a member is entitled is the benefit that can be
provided from the member's vested account.
Vesting
Vesting in the company matching contributions begins one year after
employment at 20% and increases 20% each year until the fifth year of employment
when 100% is vested. Notwithstanding the foregoing statement, a member becomes
fully vested in their company contribution account upon retirement, disability,
death, reaching age 65, or the complete discontinuance of company contributions.
As of December 31, 1995, the cumulative company contributions, including
those made by Pre-Distribution ITT on behalf of all members including a pro-rata
share of investment income, were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1995
----------------
<S> <C>
Vested....................................................... $ 75,368,000
Nonvested.................................................... 57,000
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$ 75,425,000
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</TABLE>
Investment Options
Contributions for member savings made on or after the Distribution date
shall be invested, in multiples of 5%, in any one or more of Fund A, B, C or D
as elected by the member. Except with respect to dividends thereon, no such
amounts shall be invested in Fund F or Fund G.
Fund A -- A fund invested primarily in ITT Corporation stock.
Fund B -- A fund invested in a portfolio of common stocks, all of which
are included in the Standard and Poor's 500 Composite Stock Index, with
the objective of providing investment results which will approximate the
performance of the S&P 500 (the "Index Fund").
Fund C -- A fund, together with the earnings thereon, invested in a
diversified portfolio consisting of fixed income investments and
agreements in support of capital preservation and liquidity.
Fund D -- A fund invested through an actively managed portfolio of the
following asset classes: equity securities, fixed income securities and
cash equivalents (the "Balanced Fund").
Fund F -- A fund invested primarily in common stock of ITT Industries,
Inc., attributable to the spin-off transaction occurring on the
Distribution date.
Fund G -- A fund invested primarily in common stock of ITT Hartford
Group, Inc., attributable to the spin-off transaction occurring on the
Distribution date.
Participant Loans
Members may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their vested account
balance. Loan transactions are treated as a transfer to (from) the investment
fund from (to) the loan fund. Loan terms range from 1 - 5 years or up to 15
years for the purchase of a primary residence. The loans are secured by the
balance in the participants account and bear interest at the prime rate as
published in The Wall Street Journal plus 1% determined quarterly by the Plan
Committee. Principal and interest is paid ratably through monthly payroll
deductions.
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Payment of Benefits
On termination of service due to death, disability, retirement or other
reasons, a member may elect to receive either a lump sum amount equal to the
value of the member's vested interest in his or her account or, subject to
certain conditions, annual installments over a period not greater than twenty
years. Members may also elect to defer distributions subject to certain
conditions.
Forfeitures
Forfeitures of the nonvested portion of any member's company contributions
are applied to reduce future company contributions. There were no forfeitures
for the period December 19, 1995 through December 31, 1995.
NOTE 2 -- ACCOUNTING POLICIES
The financial statements have been prepared using the accrual basis of
accounting. Repayment of participant loans, interest on participants loans, new
loans to participants and amounts allocated to withdrawing participants for the
period December 19, 1995 through December 31, 1995 represent such transactions
for the entire month of December 1995.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of investment income and expenses during the
reporting period. Actual results could differ from those estimates. However,
based on information currently available, management does not believe any
potential differences would have a material effect on the Plan's financial
condition.
NOTE 3 -- FEDERAL INCOME TAX
A request for formal determination that the Plan is qualified and the trust
established under the Plan is tax-exempt is expected to be made of the Internal
Revenue Service prior to year-end 1996. In the opinion of management, a
favorable ruling is expected in due course. The Plan administrator and the
Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the Code.
NOTE 4 -- PLAN TERMINATION
Although it has not expressed any intent to do so, the Corporation has the
right under the Plan to suspend, reduce, or partially or completely discontinue
its contributions at any time and to terminate the Plan, the trust agreement and
the trust hereunder subject to the provisions of ERISA. In the event of the
Plan's termination or partial termination or complete discontinuance of
contributions, the interest of members shall automatically become
nonforfeitable.
NOTE 5 -- RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits
per the financial statements to the Form 5500.
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------
<S> <C>
Net assets available for plan benefits per the financial
statements......................................................... $ 172,436,000
Amounts allocated to withdrawing participants........................ (1,630,000)
------------
Net assets available for plan benefits per the Form 5500............. $ 170,806,000
============
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31, 1995, but not yet paid as of that date.
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ITT CORPORATION INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 6 -- SUBSEQUENT EVENTS
Plan assets were transferred from the ITT Industries, Inc. Investment and
Savings Plan Trust to the ITT Corporation Investment and Savings Plan Trust in
March and April 1996. The amount of plan assets transferred differed from the
amount of plan assets recorded as of December 31, 1995, due to investment
income.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
EX-23 -- Consent of Independent Accountants
</TABLE>
11
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To ITT Corporation:
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 11-K, into the Corporation's previously
filed Registration Statement on Form S-8 (File No. 33-64817).
New York, New York /s/ ARTHUR ANDERSEN LLP
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June 28, 1996 ARTHUR ANDERSEN LLP
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