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To: Sergio H who wrote (45816)	12/4/2011 8:47:58 PM
From: Spekulatius	1 Recommendation Respond to of 78717

Again this is sort of obfuscating the issue, I think. The pension plans were not significantly changed within the spinoff process, the benefits are not different except that new employees are not eligible for the pension any more, which hardly would change the obligation. So, the spinoff may have triggered a -re-evaluation of the pension benefit but is not the root cause of the increase. What I think is not fair is doing the roadshow pre-spinoff with one set of numbers and then executing a spinoff and posting substantially different results somewhere hidden in the 10Q text (while leaving out entirely our of the presentation for investors). And then claiming that 661M$ in obligations are not significant for a company with a 1.7B$ market cap is just making a mockery out of the new shareholders. This increase in pension liability is not expected to result in a material impact on the future ITT Exelis financial condition . This may be one of the cases where a company uses the spinoff of subsidies to dump unwanted liabilities. Also keep in mind that the ITT stub got the asbestos obligations, while they got a cash injection equal to the estimated asbestos. This is fine of the pension obligation estimate is correct, if not they got screwed as well. The CEO went with Xylem, which got the majority of the debt but otherwise has clean books.