<PAGE>   1
 
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
 
(MARK ONE)
 
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
 
                                       OR
 
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
             FOR THE TRANSITION PERIOD FROM           TO
 
                         COMMISSION FILE NUMBER 1-13960
 
                            ------------------------
 
                                ITT CORPORATION
 
<TABLE>
<S>                          <C>
         NEVADA                    88-0340591
(STATE OF INCORPORATION)        (I.R.S. EMPLOYER
                             IDENTIFICATION NUMBER)
</TABLE>
 
                          1330 AVENUE OF THE AMERICAS
                            NEW YORK, NY 10019-5490
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
 
                        TELEPHONE NUMBER: (212) 258-1000
 
                            ------------------------
 
     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
 
                               Yes X      No ___
 
     As of November 6, 1996 there were outstanding 116.4 million shares of
common stock, no par value, of the registrant.
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<PAGE>   2
 
                                ITT CORPORATION
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
  ITEM                                                                                   PAGE
---------                                                                                ----
<C>         <S>                                                                          <C>
  PART I.   FINANCIAL INFORMATION:
       1.   Financial Statements:
            Consolidated Income --
            Third Quarter and Nine Months Ended September 30, 1996 and 1995..........       2
            Consolidated Balance Sheet --
            September 30, 1996 and December 31, 1995.................................       3
            Consolidated Cash Flow --
            Nine Months Ended September 30, 1996 and 1995............................       4
            Notes to Financial Statements............................................       5
            Business Segment Information.............................................       7
       2.   Management's Discussion and Analysis of Financial Condition and Results
            of Operations............................................................       8

  PART II.  OTHER INFORMATION:
  
       6.   Exhibits and Reports on Form 8-K.........................................      13
            Signature................................................................    II-1
            Exhibit Index............................................................    II-2
</TABLE>
 
                                        1
<PAGE>   3
 
                        PART I.   FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
     The following unaudited financial statements, in the opinion of management,
reflect all adjustments (which include only normal recurring adjustments)
necessary for a fair presentation of the financial position, the results of
operations and cash flow for the periods presented. For a description of
accounting policies, see notes to financial statements in the Corporation's 1995
Annual Report on Form 10-K.
 
                        ITT CORPORATION AND SUBSIDIARIES
 
                              CONSOLIDATED INCOME
                        (IN MILLIONS EXCEPT FOR SHARES)
 
<TABLE>
<CAPTION>
                                                                                NINE MONTHS ENDED
                                                            THIRD QUARTER         SEPTEMBER 30,
                                                          -----------------     -----------------
                                                           1996       1995       1996       1995
                                                          ------     ------     ------     ------
<S>                                                       <C>        <C>        <C>        <C>
Revenues..............................................    $1,665     $1,624     $4,805     $4,558
Costs and expenses:
  Salaries, benefits and other operating..............     1,208      1,153      3,468      3,321
  Selling, general and administrative.................       203        289        613        662
  Depreciation and amortization.......................        69         53        197        181
                                                          ------     ------     ------     ------
                                                           1,480      1,495      4,278      4,164
                                                          ------     ------     ------     ------
                                                             185        129        527        394
Interest expense, net.................................       (53)       (61)      (171)      (218)
Miscellaneous income, net.............................         1          3          9         12
                                                          ------     ------     ------     ------
                                                             133         71        365        188
Income tax expense....................................       (53)       (14)      (153)       (69)
Minority equity.......................................       (13)        (7)       (29)       (16)
                                                          ------     ------     ------     ------
Net income............................................    $   67     $   50     $  183     $  103
                                                          ======     ======     ======     ======
Earnings per share (Pro Forma for 1995 --
  See Notes to Financial Statements)..................    $  .57     $  .42     $ 1.54     $  .87
                                                          ======     ======     ======     ======
Weighted average common equivalent shares (Pro Forma
  for 1995 -- See Notes to Financial Statements)......     118.2      117.2      118.4      117.2
                                                          ======     ======     ======     ======
</TABLE>
 
The accompanying notes to financial statements are an integral part of the above
                                   statement.
 
                                        2
<PAGE>   4
 
                        ITT CORPORATION AND SUBSIDIARIES
 
                           CONSOLIDATED BALANCE SHEET
                        (IN MILLIONS EXCEPT FOR SHARES)
 
<TABLE>
<CAPTION>
                                                                       SEPTEMBER 30,   DECEMBER 31,
                                                                           1996            1995
                                                                       -------------   ------------
<S>                                                                    <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents..........................................     $   175         $  177
  Marketable securities..............................................         631             --
  Receivables, net...................................................         709            784
  Inventories........................................................          97             86
  Prepaid expenses and other.........................................         124             96
                                                                           ------         ------
     Total current assets............................................       1,736          1,143
Plant, property and equipment, net...................................       4,609          3,979
Investments..........................................................         966          1,757
Goodwill, net........................................................       1,333          1,332
Long-term receivables, net...........................................         174            150
Other assets.........................................................         349            331
                                                                           ------         ------
                                                                          $ 9,167         $8,692
                                                                           ======         ======
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
  Accounts payable...................................................     $   282         $  309
  Accrued expenses...................................................         614            695
  Notes payable and current maturities of long-term debt.............         289            265
  Other current liabilities..........................................         165            161
                                                                           ------         ------
     Total current liabilities.......................................       1,350          1,430
Long-term debt.......................................................       3,875          3,575
Deferred income taxes................................................         184            141
Other liabilities....................................................         427            350
Minority interest....................................................         284            260
                                                                           ------         ------
                                                                            6,120          5,756
                                                                           ------         ------
Stockholders Equity:
  Common stock: authorized 200,000,000 shares, no par or stated
     value, outstanding 116,350,260 and 117,196,370 shares,
     respectively....................................................       2,896          2,944
  Cumulative translation adjustment..................................          (5)            --
  Unrealized loss on securities, net of tax..........................         (19)            --
  Retained earnings/(accumulated deficit)............................         175             (8)
                                                                           ------         ------
     Total stockholders equity.......................................       3,047          2,936
                                                                           ------         ------
                                                                          $ 9,167         $8,692
                                                                           ======         ======
</TABLE>
 
The accompanying notes to financial statements are an integral part of the above
                                   statement.
 
                                        3
<PAGE>   5
 
                        ITT CORPORATION AND SUBSIDIARIES
 
                             CONSOLIDATED CASH FLOW
                                 (IN MILLIONS)
 
<TABLE>
<CAPTION>
                                                                           NINE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                          -------------------
                                                                          1996         1995
                                                                          -----       -------
<S>                                                                       <C>         <C>
OPERATING ACTIVITIES
Net income..............................................................  $ 183       $   103
Adjustments to net income:
  Depreciation and amortization.........................................    197           181
  Provision for doubtful receivables....................................     38            47
Changes in working capital:
  Accounts receivable...................................................     (5)         (103)
  Inventories...........................................................    (12)           (7)
  Accounts payable......................................................    (32)           32
  Accrued expenses......................................................      7            46
Accrued and deferred taxes..............................................      2            55
Other, net..............................................................    (24)           37
                                                                          -----       -------
  Cash from operating activities........................................    354           391
                                                                          -----       -------
INVESTING ACTIVITIES
Additions to plant, property and equipment..............................   (359)         (321)
Proceeds from divestments...............................................    242             1
Acquisitions, net of acquired cash......................................   (299)       (2,208)
Other, net..............................................................    (39)           80
                                                                          -----       -------
  Cash used for investing activities....................................   (455)       (2,448)
                                                                          -----       -------
FINANCING ACTIVITIES
Short-term debt, net....................................................      5           (19)
Long-term debt issued...................................................    206            64
Long-term debt repaid...................................................    (56)         (143)
Repurchase of common stock..............................................    (57)           --
Change in investments and advances from ITT Industries, Inc.*...........     --         2,424
Other, net..............................................................      2            10
                                                                          -----       -------
  Cash from financing activities........................................    100         2,336
                                                                          -----       -------
EXCHANGE RATE EFFECT ON CASH AND CASH EQUIVALENTS.......................     (1)           --
                                                                          -----       -------
(Decrease)/Increase in cash and cash equivalents........................     (2)          279
Cash and cash equivalents -- Beginning of period........................    177           191
                                                                          -----       -------
Cash and cash equivalents -- End of period..............................  $ 175       $   470
                                                                          =====       =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest..............................................................  $ 158       $   263
                                                                          =====       =======
  Income Taxes..........................................................  $ 144       $    45
                                                                          =====       =======
</TABLE>
 
---------------
 
* Investments and advances from ITT Industries, Inc. represents the means by
  which ITT was funded by ITT Corporation, a Delaware corporation (which has
  been renamed ITT Industries, Inc. and reincorporated in Indiana; "Old ITT"),
  prior to the distribution on December 19, 1995 of the outstanding shares of
  common stock of ITT to shareholders of Old ITT on that date and consisted of
  both equity and interest bearing advances.
 
The accompanying notes to financial statements are an integral part of the above
                                   statement.
 
                                        4
<PAGE>   6
 
                         NOTES TO FINANCIAL STATEMENTS
                     (DOLLARS IN MILLIONS EXCEPT PER SHARE)
 
1) BASIS OF PRESENTATION
 
     ITT Corporation ("ITT" or the "Corporation") is one of the world's largest
hotel and gaming companies. ITT's principal lines of business are hotels, gaming
and information services. The hotels segment is comprised of a worldwide
hospitality network of over 400 full-service hotels serving three markets:
luxury, upscale and mid-price. ITT's hotel operations are represented in nearly
every major world market. ITT's gaming operations are located in several key
domestic jurisdictions. ITT also operates various hotel/casino ventures outside
the United States. ITT's information services segment publishes telephone
directories in many countries outside the United States and provides
post-secondary career education in the United States.
 
     On December 19, 1995 (the "Distribution Date"), ITT Corporation, a Delaware
corporation ("Old ITT", which has been reincorporated in Indiana and renamed ITT
Industries, Inc.), distributed to its shareholders of record at the close of
business on such date all of the outstanding shares of common stock of ITT, then
a wholly owned subsidiary of Old ITT (the "Distribution"). In such Distribution,
holders of common stock of Old ITT received one share of ITT common stock for
every one share of Old ITT common stock held. In connection with the
Distribution, ITT, which was then named "ITT Destinations, Inc.", changed its
name to ITT Corporation.
 
2) GAMING OPERATIONS
 
     Casino revenues represent the net win from gaming wins and losses. Revenues
exclude the retail value of rooms, food, beverage, entertainment and other
promotional allowances provided on a complimentary basis to customers. The
estimated retail value of the promotional allowances was $38 and $48 for the
third quarter of 1996 and 1995 and $121 and $104 for the nine months ended
September 30, 1996 and 1995, respectively. The estimated cost of such
promotional allowances was $27 and $34 for the third quarter of 1996 and 1995
and $83 and $73 for the nine months ended September 30, 1996 and 1995,
respectively, and have been included in costs and expenses.
 
     Revenues and costs and expenses of the Gaming operations are comprised of
the following:
 
<TABLE>
<CAPTION>
                                                                               NINE MONTHS
                                                                                  ENDED
                                                            THIRD QUARTER     SEPTEMBER 30,
                                                            -------------     -------------
                                                            1996     1995     1996     1995
                                                            ----     ----     ----     ----
    <S>                                                     <C>      <C>      <C>      <C>
    Revenues
      Gaming..............................................  $264     $318     $790     $744
      Rooms...............................................    17       21       53       53
      Food and beverage...................................    19       21       58       53
      Other operations....................................    25       26       79       64
                                                            ----     ----     ----     ----
              Total.......................................  $325     $386     $980     $914
                                                            ====     ====     ====     ====
    Costs and Expenses
      Gaming..............................................  $146     $154     $448     $389
      Rooms...............................................     5        6       18       18
      Food and beverage...................................    19       17       54       49
      Other operations....................................    17       34       42       59
      Selling, general and administrative.................    54       49      159      144
      Depreciation and amortization.......................    19       25       58       64
      Provision for doubtful accounts.....................     8       20       22       38
                                                            ----     ----     ----     ----
              Total.......................................  $268     $305     $801     $761
                                                            ====     ====     ====     ====
</TABLE>
 
                                        5
<PAGE>   7
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
                     (DOLLARS IN MILLIONS EXCEPT PER SHARE)
 
3) ACQUISITIONS
 
     On January 30, 1995, the Corporation acquired Caesars World, Inc.
("Caesars") for approximately $1.76 billion and on March 10, 1995, the
Corporation acquired a 50% interest in the businesses which comprise Madison
Square Garden ("MSG") for approximately $.6 billion.
 
     The following pro forma summary for the nine months ended September 30,
1995 presents information as if the acquisitions of Caesars and MSG had occurred
as of January 1, 1995:
 
<TABLE>
        <S>                                                                   <C>
        Net revenues........................................................  $4,640
        Net income..........................................................  $   88
                                                                              ======
        Income per share....................................................  $  .74
                                                                              ======
</TABLE>
 
     The pro forma information is not necessarily indicative of the results that
would have occurred had such acquisitions taken place at the beginning of the
year.
 
4) EARNINGS PER SHARE
 
     Earnings per share in the 1995 third quarter, nine months and through the
Distribution Date were computed based upon the number of ITT common shares that
were outstanding on the Distribution Date.
 
5) MARKETABLE SECURITIES
 
     The existing restrictions on the Corporation's investment in Alcatel
Alsthom shares expire in July, 1997. Accordingly, this investment is being
carried at fair value and has been classified as "available for sale" in
accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities".
 
6) RECEIVABLES
 
     Current receivables of $709 and $784 at September 30, 1996 and December 31,
1995, including current maturities of notes receivable, are reported net of
allowances for doubtful accounts of $118 and $106.
 
     Long-term receivables of $174 and $150 at September 30, 1996 and December
31, 1995, are net of allowances for doubtful accounts of $92 and $98, exclude
current maturities of $28 and $21.
 
7) PLANT, PROPERTY AND EQUIPMENT
 
     Plant, property and equipment consists of the following:
 
<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,     DECEMBER 31,
                                                                     1996              1995
                                                                 -------------     ------------
    <S>                                                          <C>               <C>
    Land and improvements......................................     $ 1,326           $1,178
    Buildings and improvements.................................       2,566            2,311
    Machinery, furniture, fixtures and equipment...............         985              789
    Construction work in progress..............................         384              250
    Other......................................................         119               97
                                                                     ------           ------
                                                                      5,380            4,625
    Less -- accumulated depreciation and amortization..........        (771)            (646)
                                                                     ------           ------
                                                                    $ 4,609           $3,979
                                                                     ======           ======
</TABLE>
 
8) RECLASSIFICATIONS
 
     Certain amounts in the 1995 financial statements have been reclassified to
conform to the current year presentation.
 
                                        6
<PAGE>   8
 
                          BUSINESS SEGMENT INFORMATION
                                 (IN MILLIONS)
 
     Business segment information is as follows:
 
<TABLE>
<CAPTION>
                                                                                   INCOME
                REVENUES                                               ------------------------------
  ------------------------------------
                                                                          THIRD
   THIRD QUARTER        NINE MONTHS                                      QUARTER        NINE MONTHS
  ----------------    ----------------                                 ------------    --------------
   1996      1995      1996      1995                                  1996    1995    1996     1995
  ------    ------    ------    ------                                 ----    ----    -----    -----
  <C>       <C>       <C>       <C>       <S>                          <C>     <C>     <C>      <C>
                                          Hotels....................
  $1,104    $1,034    $3,190    $3,046                                 $ 84    $  5    $ 242    $ 109
                                          Gaming....................
     325       386       980       914                                   57      81      179      153
                                          Information Services......
     236       204       635       598                                   65      31      175      131
  ------    ------    ------    ------                                 ----    ----    -----    -----
                                          Total Segments............
   1,665     1,624     4,805     4,558                                  206     117      596      393
                                          Other.....................
      --        --        --        --                                  (21)     12      (69)       1
  ------    ------    ------    ------                                 ----    ----    -----    -----
   1,665     1,624     4,805     4,558                                  185     129      527      394
                                          Interest expense, net.....    (53)    (61)    (171)    (218)
                                          Miscellaneous income,
                                          net.......................      1       3        9       12
                                          Income tax expense........    (53)    (14)    (153)     (69)
                                          Minority equity...........    (13)     (7)     (29)     (16)
  ------    ------    ------    ------                                 ----    ----    -----    -----
  $1,665    $1,624    $4,805    $4,558                                 $ 67    $ 50    $ 183    $ 103
            ======    ======    ======                                 ====    ====    =====    =====
</TABLE>
 
The accompanying notes to financial statements are an integral part of the above
                                   statement.
 
                                        7
<PAGE>   9
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS
                  (DOLLARS IN MILLIONS UNLESS OTHERWISE STATED)
 
RESULTS OF OPERATIONS
 
  THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1995
 
     Revenues of $1,665 in the 1996 third quarter increased 3% on an overall
basis compared with $1,624 in 1995. Hotels revenues rose 7% driven by strong
average daily rate increases, particularly in owned and leased properties.
Revenues at ITT World Directories, Inc. ("ITT World Directories") increased 16%
due primarily to the acquisition of Maister Directories, a South African concern
acquired in November, 1995. ITT Educational Services, Inc. ("ITT Educational
Services") revenues increased 16% due to tuition price increases, an expanded
curriculum and increased census. Gaming revenues decreased 16% due to several
factors. Results from the Corporation's premium play business in both Las Vegas
properties declined substantially compared with the 1995 quarter. In addition,
construction disruption from ongoing casino expansion projects and increased
competition in the Tunica, Mississippi market negatively impacted results.
 
     Salaries, benefits and other operating costs increased 5% in the quarter to
$1,208 from $1,153 in 1995, primarily representing the costs of acquired hotel
properties. Overall, salaries, benefits and other operating costs represented
73% of revenues in 1996, compared with 71% in the 1995 quarter.
 
     Selling, general and administrative expenses decreased 30% to $203 in 1996
compared with $289 in 1995. Included in the 1995 quarter is a charge of $80 for
severance and other costs associated with restructuring the headquarters of the
Hotels and Information Services business segments and a benefit of $23
representing the reimbursement of overhead expenses related to world
headquarters by the entities that comprised Old ITT prior to the Distribution
("service fee income"). Excluding the impact of these items, selling, general
and administrative expenses declined 13% from the prior period, reflecting
management's continuing commitment to cost containment.
 
     Excluding the restructuring charge and service fee income, the Corporation
generated earnings before interest, taxes, depreciation and amortization
("EBITDA") of $254 in the 1996 quarter compared with $239 in the 1995 quarter, a
6% improvement. This improvement reflects significant increases in average room
rates, particularly in owned and leased properties, the benefits from
acquisitions in both the Hotels and Information Services segments and
operational improvements somewhat offset by the decline in Gaming. Depreciation
and amortization increased 30% compared with the prior period due to the impact
of the acquisitions discussed above and the Corporation's method of allocating
such costs prior to the Distribution. Operating income increased 5% when
excluding the impacts of the depreciation and amortization allocation, the
restructuring charge and service fee income.
 
     Net interest expense decreased significantly in the 1996 third quarter.
However, during 1995 Old ITT allocated certain indebtedness between ITT and ITT
Industries, Inc. ("ITT Industries") in anticipation of the Distribution. As a
result of such allocation, the interest expense reflected in the 1995 third
quarter is not necessarily indicative of the interest expense which ITT would
have incurred if ITT was an independent entity during such period.
 
     Income tax expense increased in 1996 on higher pretax earnings. In
addition, during the 1995 third quarter, ITT and ITT Industries allocated
certain tax attributes of Old ITT between the companies in anticipation of the
Distribution. Such allocation reflects results which are not necessarily
indicative of the income tax expense which ITT would have incurred if ITT was an
independent entity during such period.
 
     The minority equity represents the net income attributable to the minority
shareholders of Ciga, S.p.A., ITT World Directories and ITT Educational
Services.
 
                                        8
<PAGE>   10
 
BUSINESS SEGMENTS
 
     Revenues, EBITDA and operating income, excluding the effects of overhead,
restructuring charges ($51 in Hotels and $29 in Information Services)and
minority equity, for each of ITT's three major business segments were as
follows:
 
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER                                     THREE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $1,104     $125       $84      Hotels.........................   $1,034     $ 87       $56
</TABLE>
 
     Hotels' 1996 third quarter results reflect average rate increases of 11% at
owned and leased properties throughout the world. The average rate gains at
these properties contributed to a 9% increase in revenue per available room
("REVPAR")from $97 in 1995 to $106 in 1996, and was the primary contributor to a
14% revenue increase in these properties from the prior period. Improvements in
the owned and leased properties have a greater impact on the Hotels segment
results than do improvements in managed properties, where the majority of the
improvements are realized by those property owners. Despite strong rate gains,
managed property revenues increased by only 3% from the prior period due to the
termination of several hotel management contracts. EBITDA and operating income
growth were generated primarily in the major geographic areas in which the
Corporation has invested most heavily, most notably North America. Management
continues to aggressively pursue profitable expansion opportunities while
optimizing cost saving initiatives in each of its market segments.
 
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER                                     THREE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $  325     $ 76       $57      Gaming.........................   $  386     $106       $81
</TABLE>
 
     Gaming's 1996 third quarter results were negatively impacted by several
factors which contributed to results which were significantly below the 1995
quarter. The Corporation experienced a substantial decline in its premium play
business at both of its Las Vegas, Nevada properties. In addition, the
Corporation is continuing to examine ways to reduce construction disruption at
Caesars Palace, Caesars Atlantic City and the Desert Inn, as construction
negatively impacted performance at Caesars Palace and the Desert Inn during the
third quarter of 1996 and is expected to continue to have a negative impact on
performance until the completion of each project. These negative impacts are
expected to primarily result from the noise, appearance and physical condition
of the properties caused by the construction and, to a lesser extent, a slight
reduction in the number of available rooms at Caesars Palace and Caesars
Atlantic City during certain phases of those projects. A discussion of the
Corporation's program to upgrade and expand its existing gaming operations is
contained under "Liquidity and Capital Resources".
 
     The performance of the Corporation's Sheraton Casino in Tunica,
Mississippi, was adversely affected in the 1996 third quarter as a result of
additional competition in the Tunica market. The Corporation expects that this
competition will continue and, as a result, is examining ways to increase the
competitiveness of its Tunica property.
 
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER                                     THREE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $  236     $ 72       $65      Information Services...........   $  204     $ 65       $60
</TABLE>
 
     Revenues at ITT World Directories increased 16 percent primarily as a
result of the contribution from Maister Directories, which was acquired in
November, 1995. EBITDA and operating income continued to improve due mainly to
continuing cost controls throughout the organization.
 
                                        9
<PAGE>   11
 
     ITT Educational Services revenues increased 16 percent due to tuition price
increases, expanded curriculum and increased census which more than offset the
cost of newly opened schools and increased marketing efforts.
 
  NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1995
 
     Revenues of $4,805 in the 1996 period increased 5% compared with $4,558 in
1995. All segments contributed to this increase with the largest contribution
coming from Hotels as higher average room rates in owned and leased properties
was the primary factor. Gaming revenues in the 1996 period benefited from the
inclusion of a full nine months of results from the January, 1995 acquisition of
Caesars. Revenues at ITT World Directories increased slightly due primarily to
the acquisition of Maister Directories which was offset somewhat by the impacts
of foreign exchange. ITT Educational Services revenues increased 14% due to
tuition price increases, an expanded curriculum and increased census.
 
     Salaries, benefits and other operating costs increased 4% in the nine
months to $3,468 from $3,321. Overall, salaries, benefits and other operating
costs represented 72% of revenues in 1996, down from 73% in the 1995 period.
This decrease reflects management's ongoing cost containment programs as well as
increases in average room rates primarily at the Corporation's owned and leased
hotels outpacing the increase in costs.
 
     Selling, general and administrative expenses decreased 7% to $613 in 1996
compared with $662 in 1995. Included in the 1995 nine months is a charge of $80
for severance and other costs associated with restructuring the headquarters of
the Hotels and Information Services business segments and a benefit of $75
representing service fee income. Excluding the impact of these items, selling,
general and administrative expenses declined 7% from the prior period,
reflecting management's continuing commitment to cost containment.
 
     Excluding the restructuring charge and service fee income, the Corporation
generated EBITDA of $724 in the 1996 nine months compared with $580 in 1995, a
25% improvement, while operating income rose 32% in the period. These
improvements reflect significant increases in average room rates, particularly
in owned and leased properties, the benefits from acquisitions in both the
Hotels and Information Services business segments and operational improvements
as previously discussed. Depreciation and amortization increased 9% compared
with the prior period due to the impact of the acquisitions discussed above.
 
     Net interest expense decreased significantly in the 1996 period. However,
during 1995, Old ITT allocated certain indebtedness between ITT and ITT
Industries in anticipation of the Distribution. As a result of such allocation,
the interest expense reflected in the 1995 nine months is not necessarily
indicative of the interest expense that ITT would have incurred if ITT was an
independent entity during such period.
 
     Income tax expense increased in 1996 on higher pretax earnings. In
addition, during the 1995 nine months, ITT and ITT Industries allocated certain
tax attributes of Old ITT between the companies in anticipation of the
Distribution. Such allocation reflects results which are not necessarily
indicative of the income tax expense which ITT would have incurred if ITT was an
independent entity during such period.
 
     The minority equity represents the net income attributable to the minority
shareholders of Ciga, S.p.A., ITT World Directories and ITT Educational
Services.
 
BUSINESS SEGMENTS
 
     Revenues, EBITDA and operating income, excluding the effects of overhead,
restructuring charges ($51 in Hotels and $29 in Information Services) and
minority equity, for each of ITT's three major business segments were as
follows:
 
<TABLE>
<CAPTION>
 NINE MONTHS ENDED SEPTEMBER                                      NINE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $3,190     $355      $ 242     Hotels.........................   $3,046     $253      $ 160
</TABLE>
 
                                       10
<PAGE>   12
 
     Hotels' 1996 nine months results reflect a significant increase in REVPAR
in the Corporation's owned and leased properties from $95 in 1995 to $104 in
1996, a 10% increase. This increase was the primary contributor to a 13% revenue
increase in these properties from the 1995 period. Despite strong rate gains,
managed property revenues were basically unchanged from the prior period due to
the termination of several hotel management contracts. EBITDA and operating
income growth were generated primarily in the major geographic areas in which
the Corporation has invested most heavily, most notably North America.
Management continues to aggressively pursue profitable expansion opportunities
while optimizing cost saving initiatives in each of its market segments.
 
<TABLE>
<CAPTION>
 NINE MONTHS ENDED SEPTEMBER                                      NINE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $  980     $237      $ 179     Gaming.........................   $  914     $217      $ 153
</TABLE>
 
     Gaming's 1996 nine month results reflect the impact of the January 30, 1995
acquisition of Caesars and the impact of opening two additional casinos in
Halifax and Sydney, Nova Scotia during the second and third quarters of 1995,
respectively. The contributions from these properties as well as the benefits of
cost reductions and ongoing operating efficiencies were substantially offset by
several factors which negatively impacted the 1996 third quarter and which were
previously discussed herein.
 
<TABLE>
<CAPTION>
 NINE MONTHS ENDED SEPTEMBER                                      NINE MONTHS ENDED SEPTEMBER
          30, 1996                                                         30, 1995
-----------------------------                                    -----------------------------
                    OPERATING                                                        OPERATING
REVENUES   EBITDA    INCOME                                      REVENUES   EBITDA    INCOME
--------   ------   ---------                                    --------   ------   ---------
<C>        <C>      <C>         <S>                              <C>        <C>      <C>
 $  635     $196      $ 175     Information Services...........   $  598     $178      $ 160
</TABLE>
 
     Revenues at ITT World Directories increased 5% due primarily to the Maister
Directories acquisition which was offset somewhat by the impacts of foreign
exchange. EBITDA and operating income continued to improve due mainly to
continuing cost controls throughout the organization.
 
     ITT Educational Services revenues increased 14% due to tuition price
increases, expanded curriculum and increased census which more than offset the
cost of newly opened schools and increased marketing efforts.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Corporation's EBITDA increased 25% in the 1996 nine months reflecting
earnings growth in all business segments, the continuing benefits of
management's cost rationalization strategies and the accretive impact of the
Caesars acquisition. These cash flows are expected to be sufficient to service
indebtedness, satisfy tax obligations and fund maintenance capital expenditures
and other liquidity needs. Additional liquidity needs would be funded through
traditional debt or equity financing, asset sales or any combination thereof.
 
     Cash from operating activities, as defined by Statement of Accounting
Standards No. 95 ("SFAS 95"), decreased to $354 in the 1996 nine months from
$391 in the 1995 period due primarily to changes in working capital
requirements. The SFAS definition of cash from operating activities differs from
EBITDA largely due to the inclusion of interest, income taxes and changes in
working capital.
 
     On May 2, 1996, the Corporation sold 2.1 million shares, or about 22%, of
its holdings in Alcatel Alsthom for approximately $200. Proceeds from this sale
were used for general corporate purposes, including debt reduction. After giving
effect to this sale, the Corporation owns approximately 7.5 million, or
approximately 5%, of the outstanding capital shares of Alcatel Alsthom.
 
     On June 27, 1996, the Corporation announced an extensive capital
expenditure program to upgrade and expand its existing gaming operations.
Approximately $1.2 billion is expected to be invested in Caesars Palace in Las
Vegas, Nevada, and Caesars Atlantic City in Atlantic City, New Jersey. The
Corporation is also in the process of renovating the Desert Inn in Las Vegas.
This renovation commenced in 1995 and is expected to be completed in the third
quarter of 1997 with a total cost of approximately $160. In addition to the
expansion of
 
                                       11
<PAGE>   13
 
existing gaming operations, the Corporation has announced that: (i) it has
entered into an agreement in principle with Planet Hollywood International, Inc.
to form a joint venture to construct, develop, manage and operate two "Planet
Hollywood" themed casino resort hotels at a cost of approximately $1.0 billion
and (ii) it will construct a riverboat casino and a hotel in Harrison County,
Indiana at a cost of approximately $230.
 
     Construction on certain of these projects has commenced with capital
spending estimated to be approximately $200, $1,000, $1,100, and $300 in 1996,
1997, 1998 and 1999, respectively. The Corporation plans to finance this capital
expenditure program from a combination of cash generated from operations, net
proceeds received from the issuance of securities and the sale of non-strategic
assets. These capital expenditures, and the timing of these capital
expenditures, are dependent upon many factors, including business conditions
during the construction period. Major construction projects such as the program
described above, entail significant risks, including shortages of skilled labor
or materials, unforeseen environmental, engineering or geological problems, work
stoppages, weather interference, all of which could result in unanticipated cost
increases and delays.
 
     On September 9, 1996, the Corporation exercised an option to acquire
one-half of SportsChannel Associates, a partnership which owns SportsChannel New
York. SportsChannel New York is a regional cable programming service owned by
subsidiaries of Rainbow Programming Holdings, Inc.("Rainbow"), a subsidiary of
Cablevision Systems Corporation. Subsidiaries of Rainbow and the Corporation are
partners in Madison Square Garden, L.P. SportsChannel New York carries New York
Mets baseball, New Jersey Nets basketball, New York Islanders hockey and New
Jersey Devils hockey games. The purchase price for one-half of SportsChannel
Associates is approximately $87.5 and will be paid in the form of a credit
against the amounts Rainbow would need to pay the Corporation in order to
equalize the partnership interests in Madison Square Garden, L.P. Immediately
following the acquisition, both the Corporation and Rainbow will contribute
their interests in SportsChannel Associates to Madison Square Garden, L.P. The
closing of this transaction is subject to the satisfaction of various
conditions. There can be no assurance that such conditions will be satisfied.
 
     On October 15, 1996, the Corporation received $81.25 as a partial payment
of the remaining amount necessary to equalize the partnership interests of
Rainbow and the Corporation in Madison Square Garden L.P. Rainbow has until
March 17, 1997 to equalize its interest in Madison Square Garden, L.P. In the
event that the Corporation does not acquire one-half of SportsChannel
Associates, Rainbow does not equalize its interest in Madison Square Garden,
L.P., and certain other conditions are met, Rainbow has the right to require the
Corporation to purchase all of Rainbow's interest in Madison Square Garden, L.P.
 
     Capital expenditures totaled $359 in the 1996 nine months, 45% and 44% at
the Hotels and Gaming segments, respectively, compared with $321 in the 1995
period, with 69% and 27% attributable to the Hotels and Gaming segments,
respectively. In addition, the Corporation completed the acquisitions of Caesars
($1.76 billion) and a 50% interest in businesses which comprise Madison Square
Garden ($.6 billion) in January and March, 1995, respectively.
 
     External borrowings were $4.16 billion and $3.84 billion at September 30,
1996 and December 31, 1995, respectively. This increase is primarily
attributable to two acquisitions during the 1996 third quarter. On July 1, 1996,
the Corporation paid $105 in connection with its acquisition of WBIS+ (formerly
WNYC-TV) in partnership with Dow Jones & Company. In July, 1996, the Corporation
acquired the remaining 50% interest in a previously managed joint venture hotel
property, resulting in approximately $200 in additional indebtedness.
 
     In October 1996, a jury sitting in the California Superior Court, San Diego
County, returned a verdict in Eldredge, et. al. v. ITT Educational Services, et.
al. against both the Corporation and its subsidiary, ITT Educational Services,
Inc. The plaintiffs in Eldredge, seven 1995 graduates of ITT Educational
Services' school in San Diego, alleged fraud and violations of a segment of the
California Education Code. In the aggregate, the plaintiffs were awarded
approximately $0.2 in compensatory damages and $6.6 in punitive damages,
consisting of $2.6 as against ITT Educational Services and $4.0 against the
Corporation. The verdict is subject to various post-trial motions and appeal.
Management believes that it is probable the verdict will ultimately be reversed,
in whole or in substantial part and accordingly no provision has been recorded
in the accompanying financial statements.
 
                                       12
<PAGE>   14
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
     (a) See the Exhibit Index for a list of exhibits filed herewith.
 
     (b) There were no reports on Form 8-K filed by the Corporation during the
         quarter for which this report is filed.
 
                                       13
<PAGE>   15
 
                                   SIGNATURE
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                          ITT CORPORATION
 
                                          By: J.F. DANSKI
 
                                            ------------------------------------
                                            J.F. Danski
                                            Senior Vice President and Controller
                                            (Chief Accounting Officer)
 
November 12, 1996
 
                                      II-1
<PAGE>   16
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                  DESCRIPTION                                   LOCATION
------    ----------------------------------------    ----------------------------------------
<C>       <S>                                         <C>
   3.1    Restated Articles of Incorporation......    Incorporated by reference to Exhibit 3.1
                                                        to the Registrant's Amendment No. 1 to
                                                        Form 10/A dated November 13, 1995
                                                        (File No. 1-13960).
   3.2    Certificate of Amendment of Articles of
            Incorporation.........................    Incorporated by reference to Exhibit No.
                                                        1 to the Registrant's Current Report on
                                                        Form 8-K dated December 22, 1995 (File
                                                        No. 1-13960).
   3.3    Amended and Restated By-Laws............    Incorporated by reference to Exhibit 3.3
                                                        to the Registrant's Quarterly Report on
                                                        Form 10-Q for the quarterly period
                                                        ended June 30, 1996 (File No.
                                                        1-13960).
   4.1    Specimen common share certificate.......    Incorporated by reference to Exhibit 4.1
                                                        to the Registrant's Amendment No. 1 to
                                                        Form 10/A dated November 13, 1995
                                                        (File No. 1-13960).
   4.2    Rights Agreement dated as of November 1,
            1995 between the Registrant and The
            Bank of New York......................    Incorporated by reference to Exhibit 4.4
                                                        to the Registrant's Amendment No. 1 to
                                                        Form 10/A dated November 13, 1995
                                                        (File No. 1-13960).
   4.3    Form of Certificate of Voting Powers,
            Preferences and Relative
            Participating, Optional and Other
            Special Rights and Qualifications,
            Limitations or Restrictions of Series
            A Participating Cumulative Preferred
            Stock.................................    Incorporated by reference to Exhibit 4.4
                                                        (attached as Exhibit A thereto) to the
                                                        Registrant's Amendment No. 1 to Form
                                                        10/A dated November 13, 1995 (File No.
                                                        1-13960).
   4.4    Form of Right Certificate...............    Incorporated by reference to Exhibit 4.4
                                                        (attached as Exhibit B thereto) to the
                                                        Registrant's Amendment No. 1 to Form
                                                        10/A dated November 13, 1995 (File No.
                                                        1-13960).
   4.5    Other instruments defining rights of
            security holders, including
            indentures............................    The Registrant hereby agrees to file
                                                        with the Commission a copy of any
                                                        instrument defining the rights of
                                                        long-term debt holders of the
                                                        Registrant and its consolidated
                                                        subsidiaries upon the request of the
                                                        Commission.
  10.1    Distribution Agreement among ITT
            Industries, Inc., the Registrant and
            ITT Hartford Group, Inc...............    Incorporated by reference to Exhibit
                                                        10.1 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
</TABLE>
 
                                      II-2
<PAGE>   17
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                  DESCRIPTION                                   LOCATION
------    ----------------------------------------    ----------------------------------------
<C>       <S>                                         <C>
  10.2    Intellectual Property License Agreement
            between and among ITT Industries,
            Inc., the Registrant and ITT Hartford
            Group, Inc............................    Incorporated by reference to Exhibit
                                                      10.2 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.3    Trademark Assignment Agreement between
            ITT Industries, Inc. and the
            Registrant............................    Incorporated by reference to Exhibit
                                                      10.3 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.4    License Assignment Agreement between ITT
            Industries, Inc. and the Registrant...    Incorporated by reference to Exhibit
                                                      10.4 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.5    License Assignment Agreement among the
            Registrant, ITT Hartford Group, Inc.
            and Nutmeg Insurance Company..........    Incorporated by reference to Exhibit
                                                      10.5 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.6    License Assignment Agreement among the
            Registrant, Nutmeg Insurance Company
            and Hartford Fire Insurance Company...    Incorporated by reference to Exhibit
                                                      10.6 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.7    Tax Allocation Agreement among ITT
            Industries, Inc., the Registrant and
            ITT Hartford Group, Inc...............    Incorporated by reference to Exhibit
                                                      10.7 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.8    Employee Benefit Services and Liability
            Agreement among ITT Industries, Inc.,
            the Registrant and ITT Hartford Group,
            Inc...................................    Incorporated by reference to Exhibit
                                                      10.8 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
  10.9    Form of ITT Corporation 1996 Restricted
            Stock Plan for Non-Employee
            Directors.............................    Incorporated by reference to Exhibit
                                                      10.9 to the Registrant's Annual Report
                                                        on Form 10-K for the year ended
                                                        December 31, 1995 (File No. 1-13960).
 10.10    Form of indemnification agreement with
            members of the Board of Directors.....    Incorporated by reference to Exhibit
                                                      10.10 to the Registrant's Form 10 dated
                                                        September 18, 1995 (File No. 1-13960).
 10.11    Form of 1995 ITT Corporation Incentive
            Stock Plan............................    Incorporated by reference to Exhibit
                                                      10.11 to the Registrant's Form 10 dated
                                                        September 18, 1995 (File No. 1-13960).
 10.12    Form of ITT Corporation Senior Executive
            Severance Pay Plan....................    Incorporated by reference to Exhibit
                                                      10.12 to the Registrant's Form 10 dated
                                                        September 18, 1995 (File No. 1-13960).
</TABLE>
 
                                      II-3
<PAGE>   18
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                  DESCRIPTION                                   LOCATION
------    ----------------------------------------    ----------------------------------------
<C>       <S>                                         <C>
 10.13    Form of R.V. Araskog employment
            agreement.............................    Incorporated by reference to Exhibit
                                                        10.13 to the Registrant's Form 10 dated
                                                        September 18, 1995 (File No. 1-13960).
 10.14    364-Day Competitive Advance and
            Revolving Credit Facility Agreement
            dated as of November 5, 1996 among the
            Registrant, the lenders parties
            thereto and The Chase Manhattan Bank,
            as administrative agent...............    Filed herewith.
 10.15    Five-Year Competitive Advance and
            Revolving Credit Facility Agreement
            dated as of November 5, 1996 among the
            Registrant, the lenders parties
            thereto and The Chase Manhattan Bank,
            as issuing bank and administrative
            agent.................................    Filed herewith.
    11    Statement re computation of per share
            earnings..............................    None.
    12    Statement re computation of ratios......    Filed herewith.
    15    Letter re unaudited interim financial
            information...........................    None.
    18    Letter re change in accounting
            principles............................    None.
    19    Report furnished to security holders....    None.
    22    Published report regarding matters
            submitted to vote of security
            holders...............................    None.
    23    Consents of experts and counsel.........    None.
    24    Power of attorney.......................    None.
    27    Financial data schedule.................    Filed herewith.
    99    Additional exhibits.....................    None.
</TABLE>
 
                                      II-4