You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Actual results may vary materially from the assumptions presented today.
All such statements should be evaluated together with the Safe Harbor disclosures and the other risks and uncertainties that affects our business, including those discussed in our Form 10-K and other SEC filings.
These results exclude certain non-operating and non-recurring items including, but not limited to, asbestos-related charges, restructuring, asset impairment, acquisition-related items and certain tax items.
All adjustments in the quarter and for the full year 2020 are detailed in the reconciliations in the appendix.
Before we begin, I'd like to provide a brief overview of our fourth quarter GAAP results compared to prior year.
Q4 revenue decreased 1.5% to $709 million.
Segment operating income increased 11.6% to $120 million.
And reported earnings per share was a net loss of $0.16.
This is principally driven by a $137 million charge related to the successful termination of our U.S. pension plan and other items, including tax charges totaling $17 million, partially offset by $52 million asbestos insurance settlement benefit.
I truly hope that everyone is healthy and safe.
I'm humbled by the way this team continues to respond to the crisis and want to express my sincere gratitude for all you have done.
Your efforts to serve our customers and drive exceptional performance in a safe, fast and productive manner are a testament to the commitment, perseverance and your hard work.
Mark joined ITT in January of this year after a successful 13-year career at Honeywell and has hit the ground running.
I'm happy and excited to have Mark on the ITT team to drive our global investor Relations strategy.
As a result of our focus on the health of our people and our efforts, we delivered another strong performance in the fourth quarter.
Early last year, we took some difficult and swift actions to respond to the pandemic.
These actions ensured that ITT continued to outperform in 2020 and will emerge stronger in 2021 as the economic environment recovers.
Let me now highlight some key financial achievements for the quarter.
We generated adjusted segment operating income growth of 8% with margin expansion of 150 basis points on a 4% organic sales decline.
And we improved our decremental margin every quarter in 2020.
For the full year, our decremental margin was 22% at the low end of our range.
As a result, we delivered adjusted earnings per share of $1.01, a sequential and as well as a year-over-year increase.
We generated free cash flow of $102 million for Q4 and $372 million for full year.
Throughout the year, we drove cash collections and optimized inventory, while applying strict control over capital investments.
These drove a free cash flow margin of 15% at the high end of our guidance that we increased just last quarter.
On capital deployment, in 2020, we increased our dividend by 15%.
We repurchased ITT shares totaling 73 million and we increased our majority stake in our Wolverine China joint venture as we continued to expand our market share in Asia.
Despite the restrictions posed by COVID, I was fortunate to safely visit many of our facilities around the globe, including in China, Europe, the Middle East and across the U.S. As you know, I consider this fundamental to identifying and executing the many operational and commercial opportunities we at ITT have around the globe.
In 2020, we reduced the number of recordable incidents by 25% and implemented safer workplace protocols globally.
This is an important element in ensuring the health of our people.
And it also contributed to a significant reduction in workers' compensation expense in the U.S. Safety is foundational for our operational excellence and all of us should expect a continued reduction in incidents in the future.
From a commercial perspective, sales in Friction outpaced global auto production rates by more than 600 basis points for the full year.
We increased market share by almost 400 basis points in North America, more than 200 basis points in China and almost 100 basis points in Europe.
And when it comes to EVs, we secured position on 42 new electric vehicle platforms during the year.
In Industrial Process, we continue to execute on our footprint rationalization projects.
We finalized our first consolidation in Europe this quarter and are progressing according to plan on our second project; this one in North America.
We are making progress in sourcing efficiencies through aggressive negotiations and supplier rationalization.
As I noted before, I believe there are still many opportunities to improve our purchasing performance, as well as further lean out our operations.
Industrial Process delivered 15.1% adjusted segment operating margins this quarter.
This is a milestone still in IP.
At the end of last year, I visited our industrial valve site in Amory, Mississippi.
I was impressed with the order management process implemented by Angie and her team that has resulted in best-in-class on-time delivery performance and unparalleled service for our customers.
This is also true from a project management performance standpoint where IP continue to drive near-perfect execution and on-time delivery, while driving margin expansion for many of our large projects.
While CCT's end markets remain challenged, we are deploying the same operational excellence playbook that we successfully executed in MT and IP.
We expect to reach pre-COVID margin levels at CCT in the next two to three years.
Today, I'm also pleased to provide our outlook for 2021 that reflects all that we have done to strengthen our operations, our people and our potential.
We anticipate full year organic sales growth of 2% to 4% driven by continued share gains in Motion Technologies, as well as the broader auto market recovery.
We expect the rest of our markets to be flat to slightly down.
We plan to expand adjusted segment margins by 130 to 180 basis points.
The increased sales volume and the carryover impact of our 2020 cost actions, coupled with the strong productivity from 2021 initiatives, we'll generate adjusted earnings per share in the range of $3.45 to $3.75%, which equates to 8% to 17% growth versus prior year.
Because of our strong free cash flow performance in 2020, we're well-positioned to deploy capital in 2021.
First, we would invest in our businesses with approximately $100 million of capital expenditures, up over 55% versus 2020.
Second, we will aggressively and diligently pursue acquisitions in our core markets to effectively put our cash to work and build on our strong businesses.
This is our ninth consecutive dividend increase.
And finally, we are planning to repurchase ITT shares totaling $50 million to $100 million reducing the full year weighted average share count by approximately 1%.
From a top-line perspective, Motion Technologies delivered a strong performance, growing over 10% organically, driven by continued share gains and double-digit growth in auto in North America and China.
This was offset by lower short-cycle demand in Industrial Process as we anticipated and the impact of commercial aerospace dynamics in CCT.
Our focus on operational excellence is producing strong results.
Motion Technologies expanded margins over 400 basis points to 19.5%.
Industrial Process grew margin 90 basis points to 15.1% despite a 10% organic sales decline.
The MT and IP performances more than offset Connect and Control Technologies' margin decline.
For the full year, I'd like to point out a few highlights in addition to those that we have already discussed.
First, working capital as a percentage of sales continues to decline and we saw 70 basis points of improvement in 2020, excluding the impact of FX.
Second, free cash flow increased 40% versus prior year despite the challenges posed by the global pandemic.
We hit the high end of our full year target for free cash flow margin, while also investing in the business through growth capex of more than $35 million for the year.
Third, we continue to effectively manage our legacy liability profile.
As I mentioned in our last earnings call, early in Q4, we successfully transferred our U.S. pension liability to a third party.
This will reduce our administrative costs and end all future funding requirements for the plan.
We also continue to successfully negotiate asbestos-related insurance settlements with our carriers.
And we drove an increase in our insurance assets of $52 million in the fourth quarter and $100 million for the full year.
As a result, our net asbestos liability that we have recently brought to a full-horizon valuation is now $487 million.
Years back, our Friction team developed a strategy to penetrate the growing EV segment, while continuing to gain share on conventional vehicle platforms.
We focused our technical expertise in addressing tighter noise and vibration requirements, while continuing to deliver a frictionless customer experience.
In China, our EV Brake-Pad Development Center continues to effectively partner with our customers in the largest EV market in the world.
And in 2020, we continued to see the results of our strategy by winning content on new electric vehicle platforms, including several platforms wins with The EV manufacturer.
We also won both the front and rear axle for a new U.S. performance crossover vehicle.
The strength of our Friction technology continues to be on display as we assist automakers in significantly reducing braking distance of heavier vehicles.
All of these is a testament to the innovation and the engineering prowess behind our brake-pad technology.
In Industrial Process, our redesigned between-bearing API pump has seen new orders increase over 50% this year.
Our customers are benefiting from improved hydraulic efficiency and performance with reduced lead times at a competitive price point.
In Q3, we further expanded and improved our hydraulic pump offering and have an active funnel of potential orders already.
Our new i-Alert remote monitoring offers diagnostic capabilities and tailored solution that predict customer equipment failure and improve asset up-time.
Finally, in Connect and Control Technologies our Enidine business is teaming with Bell Textron to produce passive vibration control technology for the 360 Invictus.
The Invictus is Bell's competitive prototype to the U.S. Future Attack Reconnaissance Aircraft or the FARA program.
Together with Bell, the Enidine team is developing technology for use in a mission-critical defense application suitable for the FARA program.
As we embarked on 2021, we remain laser focused on operational excellence and customer centricity.
These has been the ITT playbook for the last four years.
We continue to make significant progress and we, again, saw the benefits of this commitment in the results we delivered in Q4.
We will continue to be good stewards of ITT, driving performance for our customers, while searching for organic and inorganic opportunities to deploy capital and grow the business.
Our effective and comprehensive capital deployment strategy with clear priorities on organic investments, first and foremost, followed by close-to-core acquisitions and then return to shareholders will ensure that our cash is efficiently put to work.
Let me begin with Motion Technologies.
Our Q4 organic growth of 10% was primarily driven by strong performance in our Friction OE business.
We delivered 640 basis points of outperformance in 2020 on a global basis; further evidence that the MT machine continues to win in the marketplace.
For the quarter, Friction sales in North America were up 43% and sales in China, up 19%, while growth in our Wolverine business was over 12% with strength in Europe and Asia-Pacific as we gained market share in both brake shims and sealings.
Segment margins were incredibly strong again expanding 410 basis points on incremental margins of 46%.
This was mainly driven by higher volume and productivity that allowed us to continue to fund growth investments.
We are very pleased with the pace and the strength of the recovery in MT as we head into 2021.
For Industrial Process, sales were down, as we anticipated, with declines in short-cycle due to pandemic-related impacts that affected our previous two quarters' bookings.
Our project business, which encompasses most of our oil and gas exposure in IP, saw declines in pump bookings as large projects continued to shift to the right.
However, our short-cycle orders in the quarter were up 1%, driven by aftermarket demand.
IP margins expanded 90 basis points on 7% decremental margins.
The impact of the sales decline was almost entirely offset by productivity benefits, restructuring savings and price.
Furthermore, IP's working capital as a percent of sales improved 590 basis points versus prior year and we still see further opportunities to optimize inventory as we consolidate footprint and enhance materials planning.
IP finished the quarter with less than 20% working capital as a percent of sales.
Lastly, in Connect and Control Technologies, we continued to see weak demand across all major end markets.
Sales in aerospace and defense were down over 30%, driven by lower passenger traffic and lower build rates from airframers.
The de-bookings we saw in aerospace in the second and third quarters declined sequentially in the fourth quarter to minimal levels.
We expect that the sales weakness we saw this quarter in commercial aerospace will likely persist into the first half of 2021.
Connected sales were down over 10%, mainly due to North America aerospace and defense.
On a positive note, we are encouraged by the recovery in orders in defense and industrial connectors.
These contributed to a book-to-bill of more than 1 in Q4.
CCT margins were impacted mostly by lower volumes, partially offset by an aggressive cost reduction plan.
While this year was challenging for CCT, we are encouraged by the productivity, which was over 400 basis points this quarter and the full year.
I am now on Slide 7 to present a deeper look at the margin performance this quarter.
I want to highlight two main points.
First, we generated productivity of 230 basis points.
For the full year, that number was over 300 basis points.
This is the result of a multi-year approach to reduce ITT's cost structure by driving operational excellence across the enterprise and moving toward a leaner ITT in all three segments and at corporate.
We have successfully executed this playbook at Motion Technologies and we are in the early stages of the journey with Industrial Process.
At CCT, we're still laying the foundation and over time we expect results similar to what we experienced in Motion Technologies.
The second key takeaway is on strategic investments.
While we made necessary cuts to discretionary expense this year to manage through the pandemic, these did not come at the expense of growth investments.
We continued to selectively fund the most promising growth initiatives in key markets, including in EVs globally, to ensure we continue to win in the marketplace as we did with our successful launch of copper-free brake pads several years back.
For the full year, we achieved cost reduction savings in excess of $100 million, including $40 million in the fourth quarter.
This came from a combination of headcount reductions, reduced Executive and Board compensation and discretionary cost actions.
We delivered approximately $65 million of structural reduction in fixed costs for the full year, with the remainder comprising temporary savings, which will partially reverse in 2021.
We are continuing to drive footprint optimization at both IP and CCT, while remaining diligent with strong cost control and accelerated sourcing performance.
We expect that the carryover impact of actions in 2020 will generate approximately $10 million to $15 million of additional savings in 2021.
We also expect to fund and execute new footprint rationalization and cost reduction plans in addition to the normal productivity we will generate.
As a result of these measures, our decremental margins improved every quarter since Q2 and we finished the year at 22% at the lower end of our target, given the strong performance in Q4.
In 2021, we expect incremental margins north of 35% as volumes recover and we leverage our optimized cost structure.
Keep in mind, this will vary from quarter to quarter based on our quarterly performance in 2020 and the mix among our businesses.
Our end markets are showing signs of recovery.
Still, the full year economic outlook remains somewhat uncertain at this time.
We intend to remain flexible and manage our costs to coincide with the expected gradual recovery.
Despite the ongoing disruption from the COVID pandemic, we see general economic conditions continuing to improve throughout 2021, particularly in the second half of the year.
We expect total revenue will be up 5% to 7% versus 2020 and up 2% to 4% on an organic basis.
The strong organic growth we see in Friction, stemming from continued share gains and the resurgence in auto, will likely be offset by declines in industrial pumps as customer opex continues to be constrained and project activity remains weak.
Notably, we expect sales in Motion Technologies in 2021 to get back to 2019 levels.
In commercial aerospace, activity will slowly recover, starting in the second half of 2021 as inventory levels normalize and passenger air traffic begins to recover.
Defense should be relatively stable as the large order we won in the fourth quarter of last year will convert into revenue toward the end of 2021.
Finally, in oil and gas, we expect modest growth from downstream activity improvement.
However, the growth rate will be impacted by lower project bookings in 2020 as a result of the market downturn.
We expect to see stronger growth in the Middle East and Asia-Pacific in particular.
We expect adjusted segment margins to expand by a 150 basis points at the midpoint, driven by higher volumes, continued productivity and the incremental benefits from structural reductions to our cost structure in 2020.
All segments should deliver triple-digit margin expansion.
We're guiding to adjusted earnings-per-share growth of 8% to 17%.
This assumes an approximate 1% reduction in our full year weighted average share count from repurchases and an effective tax rate of 21.5%.
Free cash flow will be in a range of $270 million to $300 million and we expect free cash flow margin to be 10% to 12%.
This is lower than the 15% delivered in 2020 as we expect to increase capex spending, including $5 million to $10 million of investments into green projects and increase working capital dollars to support top-line growth.
However, we expect working capital to continuously decline as a percent of sales over the long term.
At these levels, adjusted free cash flow conversion will approximately be a 100% aided in part by working capital optimization.
On Slide 10 we show the walk to our 2021 adjusted earnings per share guidance.
The majority of our earnings growth will be generated by stronger volume and net productivity, partially offset by the reversal of temporary cost savings and the incremental investments for growth.
The reversal of temporary cost savings is due to a combination of higher compensation costs, travel expense and CARES Act benefits that will become a headwind to earnings in 2021.
Foreign exchange is expected to contribute positively to earnings and tax rate is expected to be slightly higher than 2020 at 21% -- 21.5% with a variance of 20 basis points around the mean, depending on the jurisdictional mix of our income.
Our planning rate currently implies a $0.02 earnings per share headwind.
Lastly, as Luca highlighted, we expect to repurchase $50 million to a $100 million in ITT shares, which will generate a $0.01 to $0.03 tailwind.
Before we wrap up, I also want to share some additional details on what we are seeing thus far in 2021 and what we expect in the first quarter.
Year-to-date, we are on track.
Our first quarter outlook assumes continued double-digit organic sales growth in Motion Technologies, offset by mid-to-high-teens declines in both Industrial Process and Connect and Control.
In Industrial Process, soft 2020 bookings will continue to weigh on revenue near-term, particularly in the chemical and oil and gas segments.
Our short-cycle business will decline due to customers maintaining tight operating expense controls and lower ending backlog.
However, we expect that IP short-cycle will improve sequentially in the second quarter and then grow in the second half of 2021.
In CCT, the declines will be driven by weak commercial aero demand.
This will be partially offset by growth in connectors, given the strong beginning backlog after over 30% sequential order growth in Q4.
The margin expansion will be driven by MT and IP, given the higher order volumes and the cost actions executed in 2020.
Despite progress, CCT's margin will be lower than last Q1, which was still largely unaffected by the pandemic.
While there remains a fair amount of uncertainty in some of our end markets, we're confident in ITT's ability to continue to execute and outperform the competition, which will likely generate Q1 adjusted earnings-per-share growth of mid-to-high-single-digits versus prior year.
Let me pass it back to Luca for closing remarks.
I'm proud of the results we delivered in 2020.
We focused on what we could control, acted quickly and continued to invest in our businesses.
Our Motion Technologies business is our springboard for growth.
Friction continues to win in the marketplace with a focus on capturing share in the fast growing EV segment.
We are progressing in our transformation at both Industrial Process and Connect and Control technologies with a lot of runway.
And finally, our financial health is strong entering 2021 with ample capacity to deploy capital.
We intend to fund high-return growth initiatives, aggressively and diligently pursue strategic acquisitions, pay a competitive dividend and systematically reduce our share count, while continuing to wind out our legacy liability exposure.
We have clear priorities, we are aligned and purposely committed and accountable and we are seeing the benefits of our rigor in our results.
With that, Maria, could you please open the line for Q&A?

user
itt q4 loss per share $0.16.
q4 adjusted earnings per share $1.01 excluding items.
q4 loss per share $0.16.
compname announces a 30% increase in quarterly dividend to $0.22 per share.
initiates 2021 earnings per share guidance of $3.12 to $3.48, adjusted earnings per share guidance of $3.45 to $3.75.
qtrly organic revenue decreased 4%.
qtrly revenue $708.6 million, down 1.5%.
expect revenue growth of 5% to 7%, or up 2% to 4% on an organic basis in 2021.
sees free cash flow of $270 million to $300 million in 2021.

assistant