SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual Report pursuant to Section 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 2005
OR
[ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 for the transition period from ____ to ____
Commission File Number 1-5627
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
ITT INDUSTRIES, INC.
4 WEST RED OAK LANE, WHITE PLAINS, NY 10604
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN
FOR SALARIED EMPLOYEES
PAGE
-----------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM F-1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of December 31, 2005 and 2004 F-2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2005 F-3
Notes to Financial Statements as of December 31, 2005 and 2004
and For the Year Ended December 31, 2005 F-4 - F-11
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year) as of December 31, 2005 F-12 - F-23
Exhibit 23 - Consent of Independent Registered Public Accounting Firm F-24
Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosures under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
These financial statements have been prepared from the Company's books and
records after making all necessary adjustments thereto, and they represent the
final statements for the period ended December 31, 2005.
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 INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
BY: /s/ Geovanna Chan
----------------------------------------------------------------------
(Geovanna Chan, Director Benefits Administration & Financial Reporting)
June 29, 2006
-------------------
(Date)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Participants of
ITT Industries Investment and Savings Plan for Salaried Employees
White Plains, New York
We have audited the accompanying statements of net assets available for benefits
of ITT Industries Investment and Savings Plan for Salaried Employees (the
"Plan") as of December 31, 2005 and 2004, and the related statement of changes
in net assets available for benefits for the year ended December 31, 2005. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2005 and 2004, and the changes in net assets available for benefits for the year
ended December 31, 2005 in conformity with accounting principles generally
accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2005, is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the responsibility of
the Plan's management. Such schedule has been subjected to the auditing
procedures applied in our audit of the basic 2005 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic financial statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
Stamford, Connecticut
June 27, 2006
F-1
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
($ IN THOUSANDS)
December 31
-----------------------
2005 2004
---------- ----------
Assets:
Cash $ 208 $ --
Investments 2,090,494 1,914,552
Receivables:
Dividends 1,466 1,397
Interest 3,089 2,591
Employer Contributions 890 813
Participant Contributions 2,678 2,347
Unsettled Security Sales -- 597
---------- ----------
Total Receivables 8,123 7,745
Liabilities:
Accrued Financial Services Expense -- 168
Accrued Administrative Expense -- 398
Unsettled Security Purchases -- 6,414
---------- ----------
Total Liabilities -- 6,980
Net Assets Available for Benefits $2,098,825 $1,915,317
========== ==========
The accompanying notes to financial statements are an integral part of the above
statements.
F-2
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
($ IN THOUSANDS)
Year ended
December 31, 2005
-----------------
ADDITIONS:
Additions to net assets attributed to:
Investment Income:
Net appreciation in fair value of investments $ 153,784
Dividends 22,753
Interest 30,147
----------
Total investment income 206,684
Contributions:
Participants 73,152
Employer 23,707
----------
Total contributions 96,859
Asset transfers/rollovers 9,611
----------
Total additions 313,154
----------
DEDUCTIONS:
Deductions from net assets attributed to:
Withdrawals and distributions (126,000)
Investment management expenses (2,000)
Administrative expenses (1,646)
----------
Total deductions (129,646)
INCREASE IN NET ASSETS 183,508
----------
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,915,317
----------
End of year $2,098,825
==========
The accompanying notes to financial statements are an integral part of the above
statement.
F-3
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2005 AND 2004, AND FOR
THE YEAR ENDED DECEMBER 31, 2005
($ IN THOUSANDS)
1. DESCRIPTION OF THE PLAN
The following description of the ITT Industries Investment and Savings Plan for
Salaried Employees (the "Plan") is provided for general information purposes
only. Participants should refer to the Plan document for more complete
information.
GENERAL--The Plan is a defined contribution plan generally covering all regular
salaried U.S. employees of ITT Industries, Inc. (the "Company"). Employees are
eligible to join the Plan on the first day of the calendar month following
completion of one month of service. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS--
EMPLOYEE--An eligible employee as defined in the Plan ("Member") may generally
elect to contribute 2% to 25% of base salary. A Member may designate his/her
savings as Before-Tax Savings, After-Tax Savings, or any combination of the two.
A Member who is considered a Highly Compensated Employee under the Plan may
elect Plan savings up to a maximum of 14% of base pay as either Before-Tax
Savings, After-Tax Savings, or any combination subject to the dollar limitation
contained in section 402(g) of the Internal Revenue Code (the "Code") in order
to satisfy the IRS Non-Discrimination Test.
EMPLOYER--An amount equal to 50% of a Member's first 6% of base salary saved is
matched by the Company. In addition, the Company contributes 1/2 of 1% of base
salary to the Floor Company Contribution Account, as defined by the Plan, of
each eligible Member. All Members have the ability to invest their Company
contributions in any of the Plan's investment options.
All Company contributions, including the future Company contributions to the
Plan, have been deposited into the Employee Stock Ownership account (ESOP). All
dividends associated with the Company contribution held in the ITT Industries
Stock Fund in the Plan are immediately 100% vested. In addition, Members can
make an election regarding the payment of their ESOP dividends. Members can
elect to have their ESOP dividends either reinvested in the ITT Industries Stock
Fund or paid to them in cash on a quarterly basis.
F-4
INVESTMENT DIRECTION--A Member may direct employee contributions and Company
contributions, in any whole percentage, among any of twelve investment options,
and the Member can change his/her future savings and reallocate his/her
accumulated investments in 1% increments on a daily basis among the twelve
funds, however, limited to a maximum of four fund reallocations or transfers in
any calendar month, as defined below. The twelve funds are as follows:
ITT Industries Stock Fund
Managed Equity Index Fund
Stable Value Fund
Balanced Fund
Long Term Bond Fund
Equity Value Fund
Aggressive Growth Fund
Global Equity Fund
Small Cap Equity Fund
Asset Allocation Fund - Conservative
Asset Allocation Fund - Moderate
Asset Allocation Fund - Aggressive
MEMBER ACCOUNTS--Each Member's account is credited with the Member's
contributions, Company contributions and an allocation of Plan earnings, net of
administrative expenses and investment management fees. Allocations are based on
Member account balances, as defined in the Plan document. The benefit to which a
Member is entitled is the benefit that can be provided from the Member's vested
account.
Plan accounts are valued and reconciled between the trustee and record keeper
daily. Members can initiate transactions by using the Plan's web site, the
automated voice response system, or by speaking to a Plan representative at the
ITT Industries Benefits Center ("Benefits Center").
A Member or deferred Member* may perform a maximum of four fund reallocations or
transfers in any calendar month. A reallocation or a transfer shall be defined
as a single reallocation or a single transfer, or as a series of reallocations
and/or transfers taking place on a single business day.
VESTING--Members are immediately vested in their contributions and the Company
floor contributions plus earnings thereon. Member's interests in matching
Company contributions vest according to the following schedule, except as noted
previously with respect to dividends on ESOP shares which are 100% vested:
* A Member who has terminated employment with the Company and the Member has
elected to either defer his account or did not make any election and therefore,
his account was automatically deferred, the spouse beneficiary of a deceased
Member or deferred Member, or an alternate payee designated as such pursuant to
a domestic relations order as qualified by the Plan.
F-5
Non-forfeitable
Years of Service Percentage
---------------- ---------------
Less than 1 year.......... 0%
1 but less than 2 years... 20%
2 but less than 3 years... 40%
3 but less than 4 years... 60%
4 but less than 5 years... 80%
5 or more years........... 100%
As of December 31, 2005 and 2004, the cumulative matching Company contributions
and floor Company contributions made on behalf of all Members, including a
pro-rata share of investment income, were as follows:
2005 2004
-------- --------
Vested $847,506 $763,549
Non-vested 6,202 6,072
-------- --------
$853,708 $769,621
======== ========
FORFEITURES--Forfeitures of the non-vested portion of any Member's matching
Company contributions are applied to reduce future Company contributions.
Forfeitures for the year ended December 31, 2005 were $457.
MEMBER LOANS--A Member may request a loan in any specified whole dollar amount
which must be at least one thousand dollars but which may not exceed the lesser
of 50% of the Vested Share or fifty thousand dollars, reduced by the Member's
highest outstanding loan balance, if any, during the prior one-year period. The
interest rate charged by the Plan is based on the prime rate plus 1%, set at the
date of the loan origination, and remains the same throughout the term of the
loan. General purpose loan terms range from one to sixty months. If the loan is
used in the purchase of a primary residence, the loan term can be for a period
of up to one hundred eighty months. Members may have two loans outstanding at
the same time. Loans to Members at December 31, 2005 and 2004 were $24,701 and
$23,359, respectively.
A terminated Member may continue to make periodic repayment on their loans after
separation by contacting the Plan's Benefits Center. However, no new loans can
be requested after termination of employment.
PAYMENT OF BENEFITS--On termination of employment (including death, disability,
or retirement), a Member or his/her surviving spouse beneficiary may elect to
receive a lump-sum amount equal to the value of the Member's vested interest in
his/her account paid in cash or as a rollover to another qualified plan or an
IRA, or periodic payments under one of two alternative installment options. In
any case, a Member or his/her surviving spouse beneficiary whose vested account
balance is more than three thousand five hundred dollars (five thousand dollars
effective January 1, 2005) may elect to keep his/her account balance in the Plan
until the year in which the Member reaches/would have reached age 70 1/2. Upon
the death of a Member, with a non-spouse beneficiary, the distribution must be
made within five years from the Member's date of death in the form of a lump sum
payment or annual fixed period installments, provided that the number of
installments does not extend beyond five years from the date of the Member's
death.
F-6
DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS - If a Member leaves the Company for
any reason, the Member is entitled to receive a distribution of the total vested
value of his/her account. The distribution can be in a form of a rollover as
follows:
(1) Elective Rollover - A Member may elect a rollover distribution paid
directly to not more than two eligible retirement plans as specified by the
Member.
(2) Mandatory Rollover - If a Member's account balance is greater than one
thousand dollars but less than five thousand dollars and the Member fails
to make an affirmative election to either receive the lump sum payment or
have it directly rolled over to an eligible retirement plan within the
election period, the account balance will be automatically rolled over to
an IRA established in the Member's name.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING--The accompanying financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America.
USE OF ESTIMATES--The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits and changes therein. Actual results
could differ from those estimates. The Plan utilizes various investment
securities. Investment securities, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility. Due to the level
of risk associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near term
and those changes could materially affect the amounts reported in the financial
statements.
INVESTMENT VALUATION AND INCOME RECOGNITION--The Plan's investments are stated
at fair value except for its benefit-responsive investment contract investments
which are stated at contract value (Note 6). Quoted market prices are used to
value investments except investments in common collective trusts, which are
stated at estimated fair values based on the unit values of the underlying
funds. Shares of registered investment companies are valued at the net asset
value of shares held by the Plan at year-end. Purchases and sales of securities
are recorded on a trade-date basis. Interest income is recorded on the accrual
basis. Dividends are recorded on the ex-dividend date.
EXPENSES--The Plan pays for the administrative expenses of the Plan up to 0.25%
of the market value of trust assets. In 2005, these expenses amounted to 0.20%
of trust assets. These expenses are limited to services provided by unrelated
vendors. The Company pays Plan administrative expenses which are not paid by the
Plan. In addition to the administrative expense charge, an investment management
fee is charged to each investment fund except for the ITT Industries Stock Fund.
PAYMENT OF BENEFITS--Benefit payments to Members are recorded upon distribution.
Amounts allocated to accounts of persons who have elected to withdraw from the
Plan but have not yet been paid were $120 and $117 at December 31, 2005 and 2004
respectively.
F-7
3. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's assets:
December 31
-------------------
2005 2004
-------- --------
*ITT Industries Common Stock, 14,587,992 and 14,881,758 shares
outstanding (restated for two-for-one stock split effective February
21, 2006), respectively, at fair value $749,969 $628,382
Investment Contract with Bank of America, at contract value $186,776 $178,682
Investment Contract with IXIS Financial Products Inc.
formerly, Caisse des Depots et Consignations (CDC),
at contract value $167,978 $192,775
Investment Contract with Monumental Life Insurance Company,
at contract value $178,394 $187,027
*JP Morgan Chase Bank US Smart Index Fund,
8,211,843 and 8,631,803 shares respectively, at fair value $194,292 $196,028
* Permitted party-in-interest
During 2005, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$153,784, as follows:
Mutual Funds $ 4,846
Common Stock 138,468
Common/Collective Trusts 11,489
U.S. Notes (1,020)
Other Federal Agencies 1
--------
Net appreciation $153,784
========
4. PLAN TRUSTEE
State Street Bank and Trust Company served as the Plan's Trustee for the period
from January 1, 2005 to December 31, 2005. Fees paid by the Plan for Trustee
services provided by State Street Bank and Trust Company amounted to $379 for
the year ended December 31, 2005.
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated February 12, 2004 that the Plan and related trust are designed in
accordance with applicable sections of the Code. 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 requirements of the Code. Therefore,
no provision for income taxes has been included in the Plan's financial
statements.
F-8
6. INVESTMENT CONTRACTS WITH INSURANCE AND OTHER FINANCIAL INSTITUTIONS.
The Plan has entered into numerous group annuity contracts with five regulated
insurance companies and other financial institutions. These contracts, which are
classified as part of the Stable Value Fund, are included in the financial
statements at contract value because they are fully benefit responsive. Contract
value represents contributions made under the contract, plus earnings and less
Plan withdrawals and administrative expenses. The fair value of the investment
contracts at December 31, 2005 and 2004 was $596,457 and $622,473, respectively.
The aggregate fair value of these contracts was $4,395 below book value as of
December 31, 2005 and exceeded book value by $12,220 at December 31, 2004.
There are no reserves against contract value for credit risk of the contract
issuer or otherwise. The average yield of the investment contracts at December
31, 2005 and for the year ended December 31, 2004 was 4.57% and 4.43%
respectively. The crediting interest rate for the investment contracts ranged
from 4.33% to 4.69% at December 31, 2005 and from 4.30% to 4.52% at December 31,
2004. The crediting interest rates are based on an agreed-upon formula with the
issuers, but cannot be less than zero. The investment contracts have scheduled
maturities from March 30, 2006 to May 31, 2018.
7. EXEMPT PARTY-IN-INTEREST TRANSACTIONS
At December 31, 2005 and 2004, the Plan held 14,587,992* and 14,881,758* shares
outstanding, respectively, of common stock of ITT Industries, Inc., the
sponsoring employer, with a cost basis of $329,450 and $288,205, respectively.
During the year ended December 31, 2005, the Plan recorded related dividend
income of $5,300.
Certain administrative functions are performed by the officers and employees of
the Company (who may also be participants in the Plan) at no cost to the Plan.
Certain Plan investments are shares of common stock and common collective trusts
managed by JP Morgan Chase Bank, the recordkeeper of the Plan.
These transactions are not deemed prohibited party-in-interest transactions,
because they are covered by statutory or administrative exemptions from the Code
and ERISA's rules on prohibited transactions.
* Restated for two-for-one stock split effective February 21, 2006.
8. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
Members will become 100% vested in their accounts.
F-9
9. ASSET TRANSFERS /ROLLOVERS
During 2005, $9,611 of assets were transferred into the Plan of which $3,232
were transferred from the Flojet Corp. 401(k) Savings Plan, the Pure-Flo
Precision Employees Profit Sharing Plan and from the Allen Osborne Associates,
Inc 401(k) Plan and the balance was from individual Member's rollovers.
10. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits according
to the financial statements to the Plan's Form 5500:
As of December 31
-----------------------
2005 2004
---------- ----------
Net assets available for benefits per the financial statements $2,098,825 $1,915,317
Amounts allocated to withdrawing Members (120) (117)
---------- ----------
Net assets available for benefits per the Form 5500 $2,098,705 $1,915,200
========== ==========
The following is a reconciliation of benefits paid (withdrawals) to Members
according to the financial statements to the Form 5500:
Year Ended
December 31, 2005
-----------------
Benefits paid to Members per the financial statements $126,000
Add: Amounts allocated to withdrawing Members at December 31, 2005 120
Less: Amounts allocated to withdrawing Members at December 31, 2004 (117)
--------
Benefits paid to Members per the Form 5500 $126,003
========
11. SUBSEQUENT EVENTS
NEW INVESTMENT OPTIONS -- Effective January 1, 2006 the Plan has been amended to
include five new Target Retirement Funds to replace the three Asset Allocation
Funds, (Conservative, Moderate and Aggressive) eliminated as of December 31,
2005. In the event a Member has not made investment elections for his/her
existing employee and company account balances and/or future contributions, such
balances and/or future contributions will be invested in the Target Retirement
Fund that is appropriate based on the Member's year of birth. The five funds are
as follows:
Funds Member's Year of Birth
----- ----------------------
Target Retirement Fund Income Prior to 1945
Target Retirement Fund 2010 1945 - 1949
Target Retirement Fund 2015 1950 - 1954
Target Retirement Fund 2020 1955 - 1964
Target Retirement Fund 2030 1965 or Later
F-10
In addition, commencing January 1, 2006, the Plan provides access to a
self-directed brokerage account which allows a Member to invest in publicly
traded securities subject to certain limitations. No more than 20% of a Member's
account may be directed to the Self-directed Brokerage Account Fund.
ITT INDUSTRIES STOCK FUND - Effective April 1, 2006, the Plan has been amended
to limit the amount that may be held in the ITT Industries Common Stock Fund to
20% of a Member's balance. Member's whose investment in the ITT Industries
Common Stock Fund exceeded 20% of their total account balance immediately
preceding the effective date of the amendment are permitted to remain invested
in the stock fund at the level in effect immediately preceding the effective
date. Members whose investment in the ITT Industries Common Stock Fund are 20%
or more immediately following the effective date of the amendment or on the last
day of any quarter thereafter are not permitted to designate more than 20% of
their employee or company contributions to the stock fund.
AUTOMATIC ENROLLMENT - Effective January 1, 2006, the Plan has been amended to
provide that all salaried employees who first satisfy the eligibility
requirements for participation in the Plan on or after January 1, 2006 and who
have not elected a contribution rate, shall be deemed to have elected a 2%
before-tax employee contribution rate, provided however, that at any time, such
employee may elect to contribute at a different rate, including 0%, in
accordance with the terms of the Plan.
ACCONT MANAGEMENT OPTION - Effective January 1, 2006, the Plan has been amended
to make access to professional investment management services available to
Members through a Personal Asset Manager program.
NEW TRUSTEE - Effective January 1, 2006 the Plan's Trustee, State Street Bank
and Trust Company was succeeded by Wells Fargo Bank, NA.
F-11
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
* State Street Bank + Trust Co Short Term Money Market Fund ** 30,736,250
Investment Fund
United States Treasury Bonds US Government Security, Par - 3,675,000 ** 4,360,042
Maturity 8/15/13, Interest 12%
United States Treasury Bonds US Government Security, Par - 3,400,000 ** 5,119,125
Maturity 2/15/15, Interest 11.25%
United States Treasury Bonds US Government Security, Par - 2,230,000 ** 2,504,917
Maturity 2/15/31, Interest 5.375%
United States Treasury Notes US Government Security, Par - 5,970,000 ** 5,729,803
Maturity 2/15/09, Interest 3%
United States Treasury Notes US Government Security, Par - 11,875,000 ** 11,584,621
Maturity 7/15/09, Interest 3.625%
United States Treasury Notes US Government Security, Par - 5,070,000 ** 4,998,503
Maturity 9/30/06, Interest 2.5%
ADC Telecommunications Inc Common Stock ** 217,636
Abbott Labs Common Stock ** 831,973
Agilent Technologies Inc Common Stock ** 26,732
Alcoa Inc Common Stock ** 730,379
Alliance Gaming Group Common Stock ** 424,452
F-12
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Allied Waste Industries Common Stock ** 877,496
Altria Group Inc Common Stock ** 1,584,064
American Electric Power Inc Common Stock ** 1,064,483
Amercan International Group Inc Common Stock ** 3,336,447
American Tower Corp Common Stock ** 336,040
Andrx Corp Del Common Stock ** 574,803
Aquila Inc Common Stock ** 456,480
Aramark Corp Common Stock ** 986,190
Arrow Electronics Inc Common Stock ** 608,570
Avnet Inc Common Stock ** 304,038
Axis Capital Holdings Ltd Common Stock ** 1,348,168
BJ Services Co Common Stock ** 751,735
BP Plc Common Stock ** 2,254,122
Bank of America Corp Common Stock ** 2,680,392
Bank of New York Inc Common Stock ** 592,410
BEA Systems Inc Common Stock ** 1,017,080
Benfield Froup Limited Common Stock ** 522,690
F-13
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Blockbuster Inc Common Stock ** 394,875
Boeing Co Common Stock ** 1,840,288
Borg Warner Inc Common Stock ** 848,820
CSX Corp Common Stock ** 2,543,577
CA Inc Common Stock ** 811,872
Cadbury Schweppes PLC Common Stock ** 895,986
Chevron Corp Common Stock ** 1,510,082
Chubb Corp Common Stock ** 2,265,480
Citigroup Inc Common Stock ** 4,125,050
Citizens Communications Co Common Stock ** 1,056,672
Clorox Co Common Stock ** 1,075,221
Comcast Corp New Common Stock ** 716,751
Community Health Sys Inc New Common Stock ** 778,302
ConocoPhillips Common Stock ** 1,169,418
Cooper Industries Ltd Common Stock ** 751,900
Crown Castle Intl Corp Common Stock ** 341,757
Devry Inc Common Stock ** 350,000
F-14
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Discovery Holding Co Common Stock ** 849,915
Dover Corp Common Stock ** 1,202,553
Du Pont EI De Nemours & Co Common Stock ** 1,338,750
Ensco Intl Inc Common Stock ** 541,070
Education Management Corp Common Stock ** 737,220
Electronic Data System Corp Common Stock ** 766,876
Embraer Empresa Brasileira Common Stock ** 461,380
Entergy Corp Common Stock ** 1,407,325
Expedia Inc Common Stock ** 674,474
Exxon Mobil Corp Common Stock ** 3,426,370
Federal Home Loan Mortgage Corp Common Stock ** 1,588,005
Federal National Mortgage Assn Common Stock ** 1,908,471
Flextronics International Ltd Common Stock ** 663,984
Gemstar TV Guide Intl Inc Common Stock ** 739,935
General Electric Co Common Stock ** 2,825,030
Genworth Financial Inc Common Stock ** 691,600
GlobalSantaFe Corp Common Stock ** 789,660
F-15
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Goldman Sachs Group Inc Common Stock ** 804,573
Goodrich Corp Common Stock ** 1,582,350
Gtech Holdings Corp Common Stock ** 983,940
HCA Inc Common Stock ** 626,200
Harmony Gold Mng Ltd Common Stock ** 649,890
Hartford Financial Services Group Common Stock ** 661,353
Hewitt Associates Inc Common Stock ** 548,996
Hewlett Packard Co Common Stock ** 2,344,797
Human Genome Sciences Inc Common Stock ** 226,840
Huntsman Corp Common Stock ** 569,982
IDT Corp Common Stock ** 687,960
IAC InterActiveCorp Common Stock ** 1,278,197
* ITT Industries, Inc Common Stock ** 749,968,669
Imclone Systems Inc Common Stock ** 441,696
Intel Corp Common Stock ** 2,146,560
Interpublic Group Co Inc Common Stock ** 566,455
* JP Morgan Chase & Co Common Stock ** 2,366,635
F-16
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Jones Apparel Group Inc Common Stock ** 528,384
Kroger Co Common Stock ** 2,299,584
Lazard Ltd Common Stock ** 1,001,660
Lear Corp Common Stock ** 332,982
Lehman Brothers Holdings Inc Common Stock ** 1,191,981
Lilly Eli & Co Common Stock ** 2,042,899
Limited Brands Inc Common Stock ** 565,455
MEMC Electronic Materials Inc Common Stock ** 314,814
Magna Intl Inc Common Stock ** 712,602
Manhattan Associates Inc Common Stock ** 847,872
Manpower Inc Common Stock ** 1,302,000
McDonalds Corp Common Stock ** 1,193,688
Meadwestvaco Corp Common Stock ** 1,070,746
Medco Health Solutions Inc Common Stock ** 1,668,420
Medimmune Inc Common Stock ** 448,256
Merck & Co Inc Common Stock ** 1,498,251
Merrill Lynch & Co Inc Common Stock ** 1,422,330
F-17
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Metlife Inc Common Stock ** 1,470,000
Microsoft Corp Common Stock ** 3,987,875
Montpelier Re Holdings Ltd Common Stock ** 701,190
Nalco Holding Co Common Stock ** 945,714
National City Corp Common Stock ** 909,747
Navistar International Corp Inc Common Stock ** 269,028
Navigant Consulting Co Common Stock ** 367,066
Noble Corp Common Stock ** 761,832
Nokia Corp Common Stock ** 1,709,220
Nortel Networks Corp Common Stock ** 50,582
Northrop Grumman Corp Common Stock ** 925,694
Nuveen Investments Inc Common Stock ** 1,155,002
Occidental Petroleum Corp Common Stock ** 1,917,120
Office Depot Inc Common Stock ** 1,381,600
Packaging Corp America Common Stock ** 201,960
Pearson PLC Common Stock ** 1,207,179
Pepsico Inc Common Stock ** 1,293,852
F-18
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Performance Food Group Co Common Stock ** 998,624
Pfizer Inc Common Stock ** 986,436
Pinnacle Entmt Inc Common Stock ** 1,015,581
Procter & Gamble Co Common Stock ** 717,712
Radio One Inc Common Stock ** 882,855
Rockwood Holdings Inc Common Stock ** 637,279
Rowan Cos Inc Common Stock ** 762,696
Royal Bank of Scotland Group Common Stock ** 898,360
Safeway Inc Common Stock ** 1,043,406
The St Paul Travelers Companies Inc Common Stock ** 916,360
Sanmina Sci Corp Common Stock ** 302,460
Sanofi Aventis Common Stock ** 939,460
Schlumberger Ltd Common Stock ** 913,210
Schwab Charles Corp Common Stock ** 1,089,981
Sempra Energy Common Stock ** 1,076,160
Smurfit Stone Container Corp Common Stock ** 481,241
Solectron Corp Common Stock ** 409,188
F-19
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Sprint Nextel Corp Common Stock ** 1,495,040
Suntrust Banks Inc Common Stock ** 996,812
TXU Corp Common Stock ** 722,736
Target Corp Common Stock ** 1,610,621
Tech Data Corp Common Stock ** 710,272
Tellabs Inc Common Stock ** 453,440
Temple Inland Inc Common Stock ** 470,925
Tenet Healthcare Corp Common Stock ** 107,240
Textron Inc Common Stock ** 900,666
Tibco Software Inc Common Stock ** 322,704
Time Warner Inc Common Stock ** 1,770,160
Toyota Motor Co Common Stock ** 732,340
Unilever N V Common Stock ** 679,635
Unumprovident Corp Common Stock ** 805,350
Viacom Inc Common Stock ** 1,364,929
VNU N V Common Stock ** 747,965
Wachovia Corp Common Stock ** 1,998,108
F-20
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
Watson Pharmaceuticals Inc Common Stock ** 1,046,822
Weatherford Intl Ltd Common Stock ** 847,080
Westwood One Inc Common Stock ** 311,330
Wisconsin Energy Corp Common Stock ** 820,260
XL Capital Ltd Common Stock ** 680,538
* Participants Loans Participant Loans ** 24,700,669
The Loan interest rate ranges varied
from 4% - 11%, maturing from
1/3/2006 - 10/31/2028
* JP Morgan Chase Bank Corporate High Yield Opportunity Fund Common/Collective Trusts ** 858,559
* JP Morgan Chase Bank Disc Eq Fund Common/Collective Trusts ** 4,067,876
* JP Morgan Chase Bank EAFE Equal Opportunity Fund Common/Collective Trusts ** 83,567,848
* JP Morgan Chase Bank EAFE Plus Fund Common/Collective Trusts ** 3,641,647
* JP Morgan Chase Bank Emerging Market Fund Common/Collective Trusts ** 980,493
* JP Morgan Chase Bank Emerging Markets Equity Foc Fund Common/Collective Trusts ** 240,478
* JP Morgan Chase Bank Emerging Markets Fixed Income Fund Common/Collective Trusts ** 778,378
* JP Morgan Chase Bank Guaranty Trust Co of NY Liquidity Fund Common/Collective Trusts ** 1,180,928
* JP Morgan Chase Bank International Rate Fund Common/Collective Trusts ** 351,645
* JP Morgan Chase Bank MACS Equity Fund Common/Collective Trusts ** 2,091,759
F-21
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
* JP Morgan Chase Bank Mortgage Private Placement Fund Common/Collective Trusts ** 9,781,481
* JP Morgan Chase Bank Public Bond Fund Common/Collective Trusts ** 28,028,833
* JP Morgan Chase Bank Special Sit Property Fund Common/Collective Trusts ** 381,037
* JP Morgan Chase Bank Strategic Property Fund Common/Collective Trusts ** 1,021,485
* JP Morgan Chase Bank US Act Fixed Core Fund Common/Collective Trusts ** 12,122,109
* JP Morgan Chase Bank US Analyst Fund Common/Collective Trusts ** 7,679,240
* JP Morgan Chase Bank US Real Estate Sec Fund Common/Collective Trusts ** 1,193,946
* JP Morgan Chase Bank US Smart Index Fund Common/Collective Trusts ** 194,292,205
* JP Morgan Chase Bank US Strat Small Comp Eq Fund Common/Collective Trusts ** 3,928,766
American Century Small Cap Quantitative Fund Registered Investment Company ** 66,031,775
American Century Mutual Funds Inc Registered Investment Company ** 2,608,306
New Perspective Fund Inc Registered Investment Company ** 89,119,104
Bank of America N.A. Bank Investment Contract
Interest 4.68% ** 186,775,535
Business Mens Assurance Co Insurance Company General Account
Maturity 3/30/06, Interest 6.17% ** 11,908,184
IXIS Financial Products, Inc. (formerly CDC) Insurance Company General Account
Interest 5.25% ** 167,977,918
F-22
ITT INDUSTRIES INVESTMENT AND SAVINGS PLAN FOR SALARIED EIN: 13-5158950
EMPLOYEES SCHEDULE H, ITEM 4I - SCHEDULE OF ASSETS PN: 100
(HELD AT END OF YEAR) AS OF DECEMBER 31, 2005
(C) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
(B) IDENITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, AND PAR OR (E) CURRENT
(A) LESSOR OR SIMILARY PARTY MATURITY VALUE (D) COST VALUE
--- ----------------------------------------------------------- ---------------------------------------- -------- --------------
* JP Morgan Chase Bank Bank Investment Contract
Maturity 5/31/18, Interest 4.01% ** 40,323,981
Monumental Life Insurance Co Insurance Company General Account
Maturity 5/31/18, Interest 4.29% ** 178,394,262
-------------
TOTAL ** 2,090,494,417
=============
* Party-in-interest to the Plan
** Cost information is not required for participant directed investments and,
therefore, is not included.
F-23