==========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
SCHEDULE 13E-4
Issuer Tender Offer Statement
(Amendment No. 7)
(Pursuant to Section 13(e)(1)
of the Securities Exchange Act of 1934)
---------------------------
ITT Corporation
(Name of Issuer)
ITT Corporation
(Name of Person(s) Filing Statement)
Common Stock, no par value
(including the associated Rights)
(Title of Class of Securities)
450912 10 0
(CUSIP Number of Class of Securities)
---------------------------
PATRICK L. DONNELLY, Esq.
Vice President and
Assistant General Counsel
ITT Corporation
1330 Avenue of the Americas
New York, New York 10019-5490
(212) 258-1000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of the Person(s) Filing Statement)
Copy to:
GEORGE W. BILICIC, Jr., Esq.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019-7475
(212) 474-1000
---------------------------
==========================================================================
<PAGE>
This Amendment amends and supplements the Issuer Tender Offer
Statement on Schedule 13E-4 filed by ITT Corporation, a Nevada corporation
(the "Company"), with the Securities and Exchange Commission on July 17,
1997 (as previously amended, the "Schedule 13E-4"), relating to a tender
offer by the Company to purchase up to 30 million shares of its Common
Stock, no par value (the "Common Stock"), together with the associated
preferred share purchase rights issued pursuant to the Rights Agreement
dated as of November 15, 1995, between the Company and The Bank of New
York, as Rights Agent (the "Rights" and, together with the Common Stock,
the "Shares"), at $70 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated July
17, 1997 (as previously supplemented, the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer"),
copies of which are filed as Exhibits (a)(1) and (a)(2), respectively, to
the Schedule 13E-4. Capitalized terms used and not defined herein shall
have the meanings assigned to such terms in the Offer to Purchase and the
Schedule 13E-4.
Item 7. Financial Information.
On October 14, 1997, the Company announced its third quarter earnings.
The text of a press release dated October 14, 1997, issued by the Company
with respect to its third quarter earnings is filed herewith as Exhibit
(a)(20) and is incorporated herein by reference.
Item 9. Material to be Filed as Exhibits.
(a)(20) -- Press Release issued by the Company dated
October 14, 1997.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: October 15, 1997
ITT CORPORATION
By: /s/ Patrick L. Donnelly
--------------------------
Name: Patrick L. Donnelly
Title: Vice President and
Assistant General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
(a)(20) -- Press Release issued by the Company dated October 14, 1997.
[Exhibit a(20)]
[Letterhead of ITT Corporation]
DATE: October 14, 1997
CONTACT: Jim Gallagher
TELEPHONE: 212-258-1261
FOR IMMEDIATE RELEASE
ITT REPORTS STRONG THIRD QUARTER EARNINGS
NEW YORK, NY, October 14, 1997 -- ITT Corporation today reported
third quarter net income, excluding one-time items and assets held for
disposition, of $83 million, or 69 cents per share, compared with the 1996
third quarter net income on the same basis of $68 million, or 58 cents per
share. Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the 1997 quarter was $262 million versus $228 million in the
1996 third quarter. Revenues, excluding assets held for sale, of $1.64
billion were 2% above the $1.61 billion in the 1996 third quarter.
Reported third quarter 1997 net income was $61 million, or 51
cents per share compared with $67 million, or 57 cents per share in the
1996 quarter including the following one-time items:
o An after-tax provision of $17 million (also $17 million
pre-tax), or 14 cents per share, for costs associated with
the hostile offer for the Company by Hilton Hotels
Corporation in the 1997 third quarter.
o An after-tax loss of $5 million ($8 million pre-tax), or 4
cents per share, in the 1997 third quarter at The Desert Inn
in Las Vegas and the Company's riverboat casino in Tunica,
Mississippi. ITT has decided to dispose of these properties
and accordingly has reflected them as assets held for sale.
The 1996 third quarter included an after-tax loss of $1
million ($3 million pre-tax), or 1 cent per share from these
properties and for ITT's interest in MSG and WBIS+-TV, which
it has also agreed to sell.
- more -
<PAGE>
Page 2 - ITT Reports Strong Third Quarter Earnings
"All of our businesses performed well in the quarter," said Rand
V. Araskog, chairman and chief executive. "Our hotel operations posted
double digit EBITDA increases in every geographic area in the world. Our
gaming business also registered a strong performance. We will complete the
major construction projects during the fourth quarter, positioning our
gaming business for double digit growth in 1998," Mr. Araskog continued.
"Educational Services achieved a 23% increase in EBITDA for the quarter and
World Directories operations were strong though significantly affected by
foreign exchange effects," Mr. Araskog said. "Based on current trends, we
are confident in our ability to exceed the performance goals we have set
for this year and beyond. Further, we are committed to creating economic
value for our shareholders that is superior to Hilton's inadequate hostile
offer," Mr. Araskog concluded.
In Hotels, ITT Sheraton, with its 423 hotels worldwide, generated
EBITDA of $148 million, an 18 percent increase over $125 million in the
1996 quarter. Hotel EBITDA benefited from continued improvement in RevPar
and operating margins, partially offset internationally by unfavorable
foreign exchange translation adjustments and the impact of major property
renovations. Results in North America were particularly strong with EBITDA
from owned hotels increasing 18% from a year ago driven by a RevPar
increase of 12% which consisted of a 10% increase in ADR and a 2% increase
in occupancy. Owned hotels continue to be the primary driver of the
improved performance, with EBITDA increasing to $107 million in the quarter
from $91 million a year ago. EBITDA margins for owned hotels increased to
28% from 24% in last year's third quarter.
In gaming operations, excluding assets held for sale, third
quarter EBITDA was $71 million, equal to the 1996 quarter results despite
the final stages of construction disruption in Las Vegas and abnormally low
hold at the Lake Tahoe Property. The first 17 stories of the new tower at
Caesars Palace, with 600 of the largest rooms in Las Vegas, will open on
November 7. The remaining 550 rooms of that tower and the new tower at
Caesars Atlantic City with 620 rooms will open in December, positioning
both of these properties for growth in 1998 and beyond.
- more -
<PAGE>
Page 3 - ITT Reports Strong Third Quarter Earnings
At the two gaming properties planned for disposition, the Desert
Inn posted an EBITDA loss of $5 million in the 1997 quarter versus $3
million of EBITDA in the 1996 quarter due to the continued effects of the
ongoing construction. The riverboat casino in Tunica, Mississippi posted
third quarter EBITDA of $1 million in both the 1997 and 1996 quarters.
At ITT World Directories, ITT's overseas yellow pages publishing
business which operates in seven countries, EBITDA decreased 8% to $54
million in the 1997 quarter from $59 million in the 1996 quarter. Cost
reductions achieved in the quarter were more than offset by $9 million of
negative foreign exchange translation adjustments. Excluding foreign
currency effects, EBITDA would have been $63 million in the 1997 quarter.
At ITT Educational Services (NYSE:ESI), ITT's 83.3%-owned
post-secondary technical schools operations with 63 schools in 27 states,
EBITDA increased to $16 million in the 1997 quarter from $13 million in the
1996 quarter, on a 12% increase in revenues. ESI attributed its sustained
earnings growth to gains in total student enrollment as well as continuing
improvement in operating margins.
Net income for the first nine months of 1997, excluding all
one-time items and assets held for disposition, was $201 million, or $1.70
per share, a 14% increase over the comparable $176 million, or $1.49 per
share in the 1996 period. Reported earnings for the first nine months were
$340 million or $2.87 per share compared with $183 million, or $1.54 per
share in the 1996 period. Revenues, excluding assets held for sale, of
$4.77 billion were 3% above the comparable $4.63 billion in the year ago
period.
- ITT -
<PAGE>
ITT Corporation
Comparable Earnings and Segment EBITDA
Third Quarter and Nine Months 1997
($ millions)
<TABLE>
<CAPTION>
Comparable Earnings.....................
Third Quarter
1997 1996
--------------------- -----------------------
Earnings Earning
Net Income Per Share Net Income Per Share
<S> <C> <C> <C> <C>
Net Income as Reported $ 61 $ 0.51 $ 67 $ 0.57
Assets held for Disposition 5 0.04 1 0.01
Hilton Proposal & Distribution Costs 17 0.14 - -
---------- ------- ---------- -------
Comparable Net Income $ 83 $ 0.69 $ 68 $ 0.58
========== ======= ========== =======
Comparable Earnings.....................
Nine Months
1997 1996
--------------------- -----------------------
Earnings Earning
Net Income Per Share Net Income Per Share
Net Income as Reported $ 340 $ 2.87 $ 183 $ 1.54
Assets held for Disposition 16 0.14 (7) (0.05)
Gain on Sale : Alcatel (106) (0.90) - -
Gain on Sale : MSG (116) (0.99) - -
Restructuring 33 0.28 - -
Hilton Proposal & Distribution Costs 34 0.30 - -
---------- --------- ---------- -------
Comparable Net Income $ 201 $ 1.70 $ 176 $ 1.49
========== ========= ========== =======
Segment EBITDA...................
Third Quarter Nine Months
1997 1996 1997 1996
- ------ ------ ------ ------
Segment EBITDA before Assets held for
Disposition, Minority & Other
$ 289 $ 268 Operating Expenses $ 798 $ 764
7 2 Assets held for Disposition 27 (11)
68 66 Depreciation & amortization 210 186
51 53 Interest, net 161 171
Other operating and non-operating
14 14 expenses 40 53
- - Gain on Sale : Alcatel (183) -
- - Gain on Sale : MSG (200) -
- - Restructuring 58 -
17 - Hilton Proposal & Distribution costs 46 -
63 53 Tax provision 276 153
8 13 Minority equity in net income 23 29
- ------ ------ ------ -----
$ 61 $ 67 Net Income $ 340 $ 183
====== ====== ====== =====
$ 0.51 $ 0.57 Earnings per Share $ 2.87 $1.54
118.8 118.2 Weighted Average Shares 118.6 118.4
</TABLE>
<PAGE>
ITT Corporation ... EBITDA*
Third Quarter and Nine Months 1997
($ millions)
<TABLE>
<CAPTION>
EBITDA...................
Third Quarter Nine Months
1997 1996 1997 1996
- ------ ------ ------ ------
<S> <C> <C> <C>
Hotels
$ 107 $ 91 Owned & Leased $ 307 $ 268
Joint Ventures,
41 34 Managed & Others 111 87
- ------ ------ ------ ------
148 125 418 355
71 71 Gaming 203 220
70 72 Information Services 177 189
Segment EBITDA before Assets held
- ------ ------ for Disposition, Minority & Other ------ ------
$ 289 $ 268 Operating Expenses $ 798 $ 764
====== ====== ====== ======
$ 289 $ 268 Segment EBITDA from above $ 798 $ 764
(13) (12) Other Operating Expenses (51) (46)
(14) (28) Minority (44) (65)
- ------ ------ ------ ------
$ 262 $ 228 Total Economic EBITDA* $ 703 $ 653
====== ====== ====== ======
</TABLE>
*EBITDA represents the Corporation's earnings before interest, taxes,
depreciation and amortization and is presented as a measure of the ability
of the Corporation to generate cash flow. "Total Economic EBITDA"
represents the EBIDTA generated by the business segments reduced for the
minority owned position and overhead.
<PAGE>
ITT Corporation ... Revenues & Hotel Statistics
Third Quarter and Nine Months 1997
Revenues...................
Third Quarter Nine Months
1997 1996 1997 1996
- -------- -------- -------- --------
Hotels
$ 379 $ 373 Owned & Leased $ 1,116 $ 1,048
Joint Ventures,
772 731 Managed & Other 2,255 2,142
265 273 Gaming 779 807
223 236 Information Services 623 634
- -------- -------- ------- -------
$ 1,639 $ 1,613 Total $ 4,773 $ 4,631
43 52 Assets held for Disposition 124 174
- ------- ------- ------- -------
$ 1,682 $ 1,665 Total $ 4,897 $ 4,805
======= ======= ======== =======
Owned Hotels...................
Third Quarter Nine Months
1997 1996(1) 1997 1996(1)
- ------ ------- ------ ------
Average Daily Rate
$ 164 $ 149 North America $ 169 $ 153
158 159 Outside North America 150 146
161 155 Worldwide 161 155
REVPAR
$ 127 $ 113 North America $ 126 $ 114
116 112 Outside North America 108 105
121 113 Worldwide 121 113
(1) The five hotels sold to Felcor in 1997 have been reclassified from
owned hotels to managed hotels for this presentation.
