INCOME TAXES	9 Months Ended
Sep. 30, 2012
INCOME TAXES	NOTE 5 INCOME TAXES For the three months ended September 30, 2012, the Company recognized an income tax benefit of $18.8 representing an effective tax rate of (44.8)% as compared to an income tax benefit of $4.3, an effective tax rate of 12.7%, for the three months ended September 30, 2011. For the nine months ended September 30, 2012, the Company recognized income tax expense of $43.5 representing an effective tax rate of 33.2% as compared to an income tax benefit of $8.2, an effective tax rate of 20.2%, for the nine months ended September 30, 2011. The higher tax rate recorded in 2012 was mainly due to the increase in tax expense from the recognition of a valuation allowance against deferred tax assets, a decrease in tax expense for changes in unrecognized tax benefits, and a decrease in tax expense related to benefits associated with the filing of ITT’s 2011 U.S. federal income tax return which differed from previously estimated amounts. We recorded a valuation allowance related to current U.S. deferred tax assets in the nine months ended September 30, 2012 primarily because of a determination that it is more likely than not that the current year temporary differences expected to reverse in future years will not be realized as the Company does not expect to be able to carryback such amounts to prior years. During the third quarter of 2012, the U.S. Internal Revenue Service (IRS) closed its examination of the Company’s tax returns for the years 2007 and 2008. The Company recognized a decrease in the unrecognized tax benefits of approximately $24.7 ($16.3 recognized within income from continuing operations) primarily related to the completion of an IRS examination. Over the next 12 months it is reasonably possible that the total amount of unrecognized tax benefits could decrease due to the completion of non-U.S. tax examinations and a lapsing of the statute of limitations for certain non-U.S. and state tax jurisdictions.

INCOME TAXES

9 Months Ended

Sep. 30, 2012

NOTE 5

INCOME TAXES

For the three months ended September 30, 2012, the Company recognized an income tax benefit of $18.8 representing an effective tax rate of (44.8)% as compared to an income tax benefit of $4.3, an effective tax rate of 12.7%, for the three months ended September 30, 2011. For the nine months ended September 30, 2012, the Company recognized income tax expense of $43.5 representing an effective tax rate of 33.2% as compared to an income tax benefit of $8.2, an effective tax rate of 20.2%, for the nine months ended September 30, 2011. The higher tax rate recorded in 2012 was mainly due to the increase in tax expense from the recognition of a valuation allowance against deferred tax assets, a decrease in tax expense for changes in unrecognized tax benefits, and a decrease in tax expense related to benefits associated with the filing of ITT’s 2011 U.S. federal income tax return which differed from previously estimated amounts. We recorded a valuation allowance related to current U.S. deferred tax assets in the nine months ended September 30, 2012 primarily because of a determination that it is more likely than not that the current year temporary differences expected to reverse in future years will not be realized as the Company does not expect to be able to carryback such amounts to prior years.

During the third quarter of 2012, the U.S. Internal Revenue Service (IRS) closed its examination of the Company’s tax returns for the years 2007 and 2008. The Company recognized a decrease in the unrecognized tax benefits of approximately $24.7 ($16.3 recognized within income from continuing operations) primarily related to the completion of an IRS examination. Over the next 12 months it is reasonably possible that the total amount of unrecognized tax benefits could decrease due to the completion of non-U.S. tax examinations and a lapsing of the statute of limitations for certain non-U.S. and state tax jurisdictions.