ITT Inc Q3 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst : Just one follow-up on IP. I think, Luca, you mentioned that the project margins in backlog are better than they were a year ago. We do tend to see an environment like this where volumes are down pretty aggressively. The bidding, the pricing on these projects get pretty aggressive. Can you talk about how you're approaching the need to fill your factories, the need to absorb your fixed costs with not looking to fill the backlog up with low margin projects?

Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst : Okay. The second question I want you to talk about was free cash flow. 15.4% trailing free cash flow margin. So while we're on the call, I went back and looked at it historically. And post the spin of Xylem and Exelis, from 2012 to '17, the margin was about 5%; '18 and '19, it was about 10%; trailing 12 months, it's about 15%. Obviously, in environments like this, working capital throws off a bit of cash. How -- can you talk about how the approach to free cash flow generation has changed? And what do you think of sustainable free cash flow margin for the business is?