Page
|
|
3
|
|
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
6
|
|
6
|
|
6
|
|
7
|
|
7
|
|
8
|
|
8
|
|
18
|
|
20
|
|
21
|
|
22
|
|
22
|
|
22
|
|
23
|
|
24
|
|
24
|
|
25
|
|
31
|
|
31
|
|
31
|
|
32
|
|
33
|
|
37
|
|
40
|
|
42
|
|
42
|
|
43
|
|
44
|
|
45
|
|
45
|
|
45
|
|
46
|
|
47
|
(Unaudited)
|
||||||||||
Three
Months Ended
March
31,
|
||||||||||
2007
|
2006
|
|||||||||
Net
sales
|
$
|
502.3
|
$
|
527.3
|
||||||
Cost
of sales
|
323.4
|
360.7
|
||||||||
Selling,
general and administrative expenses
|
93.7
|
91.3
|
||||||||
Research
and development
|
10.4
|
9.6
|
||||||||
Intangible
asset amortization (Note 3)
|
1.8
|
1.6
|
||||||||
Other
operating expense, net (Note 11)
|
13.1
|
7.2
|
||||||||
Profit
from operations
|
59.9
|
56.9
|
||||||||
Interest
and debt expense
|
17.2
|
20.7
|
||||||||
Vertac
litigation charges (Note 7)
|
1.5
|
—
|
||||||||
Other
expense, net (Note 12)
|
3.3
|
10.6
|
||||||||
Income
before income taxes, minority interests and equity loss
|
37.9
|
25.6
|
||||||||
(Benefit)
provision for income taxes (Note 13)
|
(36.6
|
)
|
10.7
|
|||||||
Income
before minority interests and equity loss
|
74.5
|
14.9
|
||||||||
Minority
interests in earnings of consolidated subsidiaries
|
(0.5
|
)
|
(0.1
|
)
|
||||||
Equity
loss of affiliated companies, net of tax
|
(0.5
|
)
|
(0.4
|
)
|
||||||
Net
income from continuing operations before discontinued operations
and
cumulative effect of change in accounting principle
|
73.5
|
14.4
|
||||||||
Net
loss from discontinued operations, net of tax
|
—
|
(0.6
|
)
|
|||||||
Net
income before cumulative effect of change in accounting
principle
|
73.5
|
13.8
|
||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
0.9
|
||||||||
Net
income
|
$
|
73.5
|
$
|
14.7
|
||||||
Earnings
per share (Note 14):
|
||||||||||
Basic
earnings per share
|
||||||||||
Continuing
operations
|
$
|
0.64
|
$
|
0.13
|
||||||
Discontinued
operations
|
—
|
(0.01
|
)
|
|||||||
Cumulative
effect of change in accounting principle
|
—
|
0.01
|
||||||||
Net
income
|
$
|
0.64
|
$
|
0.13
|
||||||
Weighted
average number of shares (millions)
|
114.1
|
110.2
|
||||||||
Diluted
earnings per share
|
||||||||||
Continuing
operations
|
$
|
0.64
|
$
|
0.13
|
||||||
Discontinued
operations
|
—
|
(0.01
|
)
|
|||||||
Cumulative
effect of change in accounting principle
|
—
|
0.01
|
||||||||
Net
income
|
$
|
0.64
|
$
|
0.13
|
||||||
Weighted
average number of shares (millions)
|
114.9
|
110.5
|
||||||||
Net
income
|
$
|
73.5
|
$
|
14.7
|
||||||
Foreign
currency translation
|
6.1
|
7.4
|
||||||||
Pension
and postretirement benefit adjustments, net of tax
|
6.4 | 64.4 | ||||||||
Revaluation
of hedges, net of tax
|
(4.6
|
)
|
(5.2
|
)
|
||||||
Comprehensive
income
|
$
|
81.4
|
$
|
81.3
|
(Dollars
in millions)
|
(Unaudited)
|
||||||
March
31,
2007
|
December 31,
2006
|
||||||
ASSETS
|
|||||||
Current
assets
|
|||||||
Cash
and cash equivalents
|
$
|
159.8
|
$
|
171.8
|
|||
Accounts
receivable, net (Note
9)
|
340.1
|
326.6
|
|||||
Inventories
(Note
9)
|
230.9
|
210.6
|
|||||
Deferred
income taxes
|
71.2
|
70.2
|
|||||
Current
assets of discontinued operations
|
—
|
0.4
|
|||||
Income
taxes receivable
|
216.2
|
170.8
|
|||||
Other
current assets
|
41.2
|
34.1
|
|||||
Total
current assets
|
1,059.4
|
984.5
|
|||||
Property,
plant, and equipment, net (Note
9)
|
602.8
|
600.4
|
|||||
Intangible
assets, net (Note
3)
|
142.0
|
143.1
|
|||||
Goodwill
(Note
3)
|
483.4
|
481.5
|
|||||
Deferred
income taxes
|
385.4
|
374.6
|
|||||
Asbestos-related
assets (Note
7)
|
41.9
|
87.5
|
|||||
Deferred
charges and other assets
|
136.8
|
136.9
|
|||||
Total
assets
|
$
|
2,851.7
|
$
|
2,808.5
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities
|
|||||||
Accounts
payable
|
$
|
188.6
|
$
|
205.3
|
|||
Asbestos-related
liabilities (Note
7)
|
36.4
|
36.4
|
|||||
Current
debt obligations (Note
4)
|
35.3
|
35.8
|
|||||
Vertac
litigation liability (Note
7)
|
124.9
|
123.5
|
|||||
Accrued
expenses
|
228.0
|
228.6
|
|||||
Total
current liabilities
|
613.2
|
629.6
|
|||||
Long-term
debt (Note
4)
|
941.8
|
959.7
|
|||||
Deferred
income taxes
|
72.1
|
69.7
|
|||||
Pension
obligations
|
242.4
|
262.5
|
|||||
Other
postretirement benefit obligations
|
140.5
|
142.2
|
|||||
Deferred
credits and other liabilities
|
257.4
|
255.6
|
|||||
Asbestos-related
liabilities (Note
7)
|
230.2
|
233.6
|
|||||
Total
liabilities
|
2,497.6
|
2,552.9
|
|||||
Commitments
and contingencies (Note
7)
|
—
|
—
|
|||||
Minority
interests
|
13.2
|
12.7
|
|||||
Stockholders’
equity
|
|||||||
Series preferred
stock
|
—
|
—
|
|||||
Common
stock, $25/48 par value (shares issued: 2007 and 2006 - 160.0
million)
|
83.3
|
83.3
|
|||||
Additional
paid-in capital
|
438.7
|
454.9
|
|||||
Unearned
compensation
|
(34.5
|
)
|
(42.1
|
)
|
|||
Accumulated
other comprehensive losses
|
(401.7
|
)
|
(409.6
|
)
|
|||
Retained
earnings
|
1,809.5
|
1,734.1
|
|||||
1,895.3
|
1,820.6
|
||||||
Reacquired
stock, at cost (2007 - 43.4 million shares; 2006 - 44.0 million
shares)
|
(1,554.4
|
)
|
(1,577.7
|
)
|
|||
Total
stockholders’ equity
|
340.9
|
242.9
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
2,851.7
|
$
|
2,808.5
|
(Dollars
in millions)
|
(Unaudited)
|
||||||
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Cash
Flows from Operating Activities:
|
|||||||
Net
income
|
$
|
73.5
|
$
|
14.7
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
|
17.1
|
19.1
|
|||||
Amortization
|
9.5
|
5.8
|
|||||
Deferred
income tax provision
|
(12.7
|
)
|
2.2
|
||||
Write-off
of debt issuance costs
|
—
|
0.2
|
|||||
Loss
on sale of 51% interest in FiberVisions
|
(0.2
|
)
|
5.1
|
||||
Minority
interests in earnings of consolidated subsidiaries
|
0.5
|
0.1
|
|||||
Other
non-cash charges and credits, net
|
3.8
|
0.9
|
|||||
Accruals
and deferrals of cash receipts and payments (net of acquisitions
and
dispositions):
|
|||||||
Accounts
receivable, net
|
(11.2
|
)
|
(5.6
|
)
|
|||
Inventories
|
(18.9
|
)
|
(4.1
|
)
|
|||
Asbestos-related
assets and liabilities, net
|
43.1
|
2.7
|
|||||
Other
current assets
|
(0.5
|
)
|
10.8
|
||||
Accounts
payable
|
(18.2
|
)
|
(8.7
|
)
|
|||
Vertac
litigation liability
|
1.5
|
—
|
|||||
Accrued
expenses
|
(6.2
|
)
|
(10.4
|
)
|
|||
Income
taxes payable
|
(33.1
|
)
|
(0.8
|
)
|
|||
Pension
and postretirement benefit obligations
|
(11.7
|
)
|
5.9
|
||||
Non-current
assets and liabilities
|
(10.5
|
)
|
(2.3
|
)
|
|||
FiberVisions
net assets held for sale
|
—
|
(7.9
|
)
|
||||
Net
cash provided by operating activities
|
25.8
|
27.7
|
|||||
Cash
Flows from Investing Activities:
|
|||||||
Capital
expenditures
|
(24.2
|
)
|
(8.1
|
)
|
|||
Acquisitions
and investments, net
|
(0.9
|
)
|
(26.4
|
)
|
|||
Proceeds
from sale of 51% interest in FiberVisions, net of transaction
costs
|
—
|
27.0
|
|||||
Other,
net
|
—
|
(0.1
|
)
|
||||
Net
cash used in investing activities
|
(25.1
|
)
|
(7.6
|
)
|
|||
Cash
Flows from Financing Activities:
|
|||||||
Long-term
debt issued by FiberVisions, net of issuance costs
|
—
|
83.7
|
|||||
Long-term
debt proceeds
|
2.8
|
—
|
|||||
Long-term
debt payments
|
(22.2
|
)
|
(18.8
|
)
|
|||
Change
in short-term debt
|
0.6
|
(2.5
|
)
|
||||
Proceeds
from the exercise of stock options
|
3.8
|
0.1
|
|||||
Other,
net including income tax benefits attributable to stock-based
compensation
|
2.0
|
0.1
|
|||||
Net
cash (used in) provided by financing activities
|
(13.0
|
)
|
62.6
|
||||
Effect
of exchange rate changes on cash
|
0.3
|
0.5
|
|||||
Net
(decrease) increase in cash and cash equivalents
|
(12.0
|
)
|
83.2
|
||||
Cash
and cash equivalents - beginning of period
|
171.8
|
77.3
|
|||||
Cash
and cash equivalents - end of period
|
$
|
159.8
|
$
|
160.5
|
March
31, 2007
|
December
31, 2006
|
||||||||||||||||||
Accumulated
|
Accumulated
|
||||||||||||||||||
Gross
|
Amortization
|
Net
|
Gross
|
Amortization
|
Net
|
||||||||||||||
Customer
relationships
|
$
|
90.6
|
$
|
19.2
|
$
|
71.4
|
$
|
90.0
|
$
|
18.6
|
$
|
71.4
|
|||||||
Trademarks
and tradenames
|
73.9
|
16.1
|
57.8
|
73.9
|
15.6
|
58.3
|
|||||||||||||
Other
intangible assets
|
32.3
|
19.5
|
12.8
|
32.2
|
18.8
|
13.4
|
|||||||||||||
$
|
196.8
|
$
|
54.8
|
$
|
142.0
|
$
|
196.1
|
$
|
53.0
|
$
|
143.1
|
Paper
Technology and Ventures
|
Aqualon
Group
|
Total
|
||||||||
Balance
at December 31, 2006
|
$
|
429.5
|
$
|
52.0
|
$
|
481.5
|
||||
Foreign
currency translation
|
1.7
|
0.2
|
1.9
|
|
||||||
Balance
at March 31, 2007
|
$
|
431.2
|
$
|
52.2
|
$
|
483.4
|
4. |
Debt
|
March
31,
2007
|
December 31,
2006
|
||||||
Term
B Loan due 2010
|
$
|
354.0
|
$
|
375.0
|
|||
6.6%
notes due 2027
|
100.0
|
100.0
|
|||||
11.125%
senior notes due 2007
|
16.1
|
16.1
|
|||||
6.75%
senior subordinated notes due 2029
|
250.0
|
250.0
|
|||||
8%
convertible subordinated debentures due 2010
|
2.3
|
2.4
|
|||||
6.5%
junior subordinated deferrable interest debentures due
2029
|
214.3
|
214.1
|
|||||
Term
loans at rates ranging from 5.5575% to 5.814% due in varying amounts
thru
2011
|
31.7
|
28.1
|
|||||
Other
|
8.7
|
9.8
|
|||||
977.1
|
995.5
|
||||||
Less:
Current debt obligations
|
35.3
|
35.8
|
|||||
Long-term
debt
|
$
|
941.8
|
$
|
959.7
|
5. |
Pension
and Other Postretirement
Benefits
|
Pension
Benefits
|
Other
Postretirement Benefits
|
||||||||||||
Three
Months Ended
March
31,
|
Three
Months Ended
March
31,
|
||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||
Net
periodic benefit cost:
|
|||||||||||||
Service
cost
|
$
|
4.5
|
$
|
4.7
|
$
|
0.1
|
$
|
0.2
|
|||||
Interest
cost
|
25.9
|
24.9
|
2.2
|
2.1
|
|||||||||
Expected
return on plan assets
|
(30.3
|
)
|
(28.4
|
)
|
—
|
—
|
|||||||
Amortization
and deferrals
|
(0.7
|
)
|
(0.5
|
)
|
(1.9
|
)
|
(2.1
|
)
|
|||||
Actuarial
losses recognized
|
10.9
|
12.0
|
2.2
|
1.7
|
|||||||||
$
|
10.3
|
$
|
12.7
|
$
|
2.6
|
$
|
1.9
|
6. |
Asset
Retirement Obligations
|
Active
Sites
|
Inactive
Sites
|
Total
|
||||||||
Balance
at December 31, 2006
|
$
|
10.1
|
$
|
66.2
|
$
|
76.3
|
||||
Accretion
|
0.1
|
0.5
|
0.6
|
|||||||
Settlement
payments
|
(0.3
|
)
|
(2.0
|
)
|
(2.3
|
)
|
||||
Foreign
currency translation
|
—
|
0.1
|
0.1
|
|||||||
Balance
at March 31, 2007
|
$
|
9.9
|
$
|
64.8
|
$
|
74.7
|
Balance
December 31, 2006
|
Interest
Income/
Additional
Accruals
|
Insurance
Recovered/
Liabilities
Settled
|
Accretion/
Reclassifi-
cation
|
Balance
March 31, 2007
|
||||||||||||
Asbestos-related
assets:
|
||||||||||||||||
Insurance
receivable
|
$
|
32.8
|
$
|
—
|
$
|
(16.5
|
)
|
$
|
0.2
|
$
|
16.5
|
|||||
Restricted
cash in trust
|
54.7
|
0.7
|
(30.0
|
)
|
—
|
25.4
|
||||||||||
Asbestos-related
assets
|
$
|
87.5
|
$
|
0.7
|
$
|
(46.5
|
)
|
$
|
0.2
|
$
|
41.9
|
|||||
Asbestos-related
liabilities:
|
||||||||||||||||
Asbestos-related
liabilities, current
|
$
|
36.4
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
36.4
|
||||||
Asbestos-related
liabilities, non-
current
|
233.6
|
—
|
(3.4
|
)
|
—
|
230.2
|
||||||||||
Total
asbestos-related liabilities
|
$
|
270.0
|
$
|
—
|
$
|
(3.4
|
)
|
$
|
—
|
$
|
266.6
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Expected
volatility
|
30.00
|
%
|
30.11
|
%
|
|||
Expected
dividend yield
|
0.00
|
%
|
0.00
|
%
|
|||
Expected
life (in years)
|
6.0
|
6.0
|
|||||
Risk-free
interest rate
|
4.68
|
%
|
4.59
|
%
|
Regular
|
Performance
Accelerated
|
||||||||||||
Number
of
Shares
|
Weighted-
Average
Price
|
Number
of
Shares
|
Weighted-Average
Price
|
||||||||||
Outstanding
at December 31, 2006
|
4,677,295
|
$
|
23.22
|
720,990
|
$
|
40.75
|
|||||||
Granted
|
230,133
|
21.04
|
—
|
—
|
|||||||||
Exercised
|
(260,075
|
)
|
14.64
|
—
|
—
|
||||||||
Forfeited
|
(65,175
|
)
|
37.88
|
(46,925
|
)
|
42.56
|
|||||||
Outstanding
at March 31, 2007
|
4,582,178
|
$
|
23.39
|
674,065
|
$
|
40.62
|
|||||||
Exercisable
at March 31, 2007
|
4,002,846
|
$
|
24.44
|
151,565
|
$
|
39.58
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Compensation
cost recognized
|
$
|
0.5
|
$
|
0.3
|
|||
Unrecognized
compensation cost included in Additional paid-in capital
|
$
|
3.1
|
$
|
2.5
|
|||
Weighted-average
remaining periods for recognition (years)
|
2.1
|
2.6
|
|||||
Fair
value of options granted (per share)
|
$
|
8.26
|
$
|
4.74
|
|||
Intrinsic
value of options exercised
|
$
|
1.4
|
$
|
—
|
|||
Tax
benefits recognized in Additional paid-in capital
|
$
|
0.5
|
$
|
—
|
Number
of
Shares
|
Weighted-Average
Grant Date Fair
Value
|
||||||
Outstanding
at December 31, 2006
|
2,057,408
|
$
|
12.05
|
||||
Granted
|
364,786
|
20.91
|
|||||
Vested(1)
|
(575,093
|
)
|
11.89
|
||||
Outstanding
at March 31, 2007
|
1,847,101
|
$
|
13.85
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Compensation
cost recognized (1)
|
$
|
3.8
|
$
|
0.9
|
|||
Unrecognized
compensation cost included in Additional paid-in capital
|
$
|
15.9
|
$
|
16.2
|
|||
Weighted-average
remaining periods for recognition (years)
|
4.2
|
4.0
|
|||||
Tax
benefits recognized in Additional paid-in capital
|
$
|
1.7
|
$
|
0.2
|
March
31,
2007
|
December 31,
2006
|
||||||
Accounts
receivable, gross
|
$
|
345.4
|
$
|
332.2
|
|||
Allowance
for doubtful accounts
|
(5.3
|
)
|
(5.6
|
)
|
|||
Accounts
receivable, net
|
$
|
340.1
|
$
|
326.6
|
|||
Inventories:
|
|||||||
Finished
goods
|
$
|
129.8
|
$
|
115.4
|
|||
Raw
materials and work-in-process
|
78.6
|
73.3
|
|||||
Supplies
|
22.5
|
21.9
|
|||||
$
|
230.9
|
$
|
210.6
|
||||
Property,
plant and equipment:
|
|||||||
Land
|
$
|
16.4
|
$
|
16.4
|
|||
Buildings
and equipment
|
1,641.0
|
1,643.0
|
|||||
Construction
in progress
|
98.7
|
85.0
|
|||||
1,756.1
|
1,744.4
|
||||||
Accumulated
depreciation and amortization
|
(1,153.3
|
)
|
(1,144.0
|
)
|
|||
Property,
plant and equipment, net
|
$
|
602.8
|
$
|
600.4
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Depreciation:
|
|||||||
Included
in Cost of sales and Selling, general and administrative
(“SG&A”)
expenses
|
$
|
16.8
|
$
|
16.1
|
|||
Accelerated
depreciation included in Other operating expense, net
|
0.3
|
3.0
|
|||||
$
|
17.1
|
$
|
19.1
|
||||
Amortization:
|
|||||||
Intangible
assets
|
$
|
1.8
|
$
|
1.6
|
|||
Capitalized
software (normal basis) included in SG&A expenses
|
3.8
|
3.7
|
|||||
Accelerated
amortization of capitalized software included in Other operating
expense,
net
|
3.5
|
—
|
|||||
Deferred
financing costs included in Interest and debt expense
|
0.4
|
0.5
|
|||||
$
|
9.5
|
$
|
5.8
|
||||
Cash
paid during the period for:
|
|||||||
Interest
|
$
|
13.4
|
$
|
15.0
|
|||
Income
taxes, net of refunds received
|
7.3
|
8.3
|
|||||
Non-cash
investing and financing activities:
|
|||||||
De-consolidation
of debt issued by FiberVisions
|
—
|
90.0
|
|||||
De-consolidation
of FiberVisions capitalized debt issuance costs
|
—
|
(6.3
|
)
|
||||
Incentive
and other share-based compensation plan issuances
|
7.6
|
11.4
|
Severance
|
Other
Exit
Costs
|
Asset
Charges
|
Total
|
||||||||||
Research
and development consolidation
|
$
|
—
|
$
|
0.1
|
$
|
0.1
|
$
|
0.2
|
|||||
Manufacturing
and Alliance-related rationalization
|
0.2
|
0.1
|
0.1
|
0.4
|
|||||||||
Business
segment realignment
|
0.5
|
—
|
—
|
0.5
|
|||||||||
Business
Infrastructure Projects
|
6.0
|
1.7
|
3.5
|
11.2
|
|||||||||
Total
restructuring and asset charges
|
$
|
6.7
|
$
|
1.9
|
$
|
3.7
|
$
|
12.3
|
|||||
Paper
Technologies and Ventures
|
0.2
|
0.2
|
0.1
|
0.5
|
|||||||||
Aqualon
Group
|
0.5
|
—
|
—
|
0.5
|
|||||||||
Corporate
|
6.0
|
1.7
|
3.6
|
11.3
|
|||||||||
Total
by reporting segment
|
$
|
6.7
|
$
|
1.9
|
$
|
3.7
|
$
|
12.3
|
Three
Months Ended March 31,
|
|||||||
2007
|
2006
|
||||||
Balance
at beginning of period
|
$
|
10.5
|
$
|
16.6
|
|||
Accrued
charges for severance and related benefits
|
6.7
|
5.8
|
|||||
Accrued
charges for other exit and restructuring costs
|
1.7
|
1.5
|
|||||
Cash
payments
|
(4.1
|
)
|
(7.7
|
)
|
|||
Other,
including foreign currency translation
|
0.1
|
—
|
|||||
Balance
at end of period
|
$
|
14.9
|
$
|
16.2
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Severance,
restructuring and other exit costs, net
|
$
|
8.6
|
$
|
7.3
|
|||
Accelerated
depreciation and amortization
|
3.7
|
3.0
|
|||||
Legal
settlements
|
(0.2
|
)
|
(3.6
|
)
|
|||
Environmental
charges
|
0.1
|
0.1
|
|||||
Loss
(gains) on asset dispositions, net
|
0.1
|
(0.1
|
)
|
||||
Dismantlement
costs
|
0.7
|
0.2
|
|||||
Other
miscellaneous charges, net
|
0.1
|
0.3
|
|||||
$
|
13.1
|
$
|
7.2
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Asbestos-related
costs, net
|
$
|
2.1
|
$
|
2.2
|
|||
Loss
on sale of 51% interest in FiberVisions
|
(0.2
|
)
|
5.1
|
||||
Loss
on repurchase of debt
|
—
|
1.4
|
|||||
Environmental
charges
|
1.5
|
1.3
|
|||||
Litigation
settlements and accruals
|
0.7
|
0.7
|
|||||
Other,
net
|
(0.8
|
)
|
(0.1
|
)
|
|||
$
|
3.3
|
$
|
10.6
|
Three
Months Ended March 31,
|
|||||||
2007
|
2006
|
||||||
Weighted-average
number of common shares outstanding - Basic
|
114.1
|
110.2
|
|||||
Dilutive
effect of:
|
|||||||
Convertible
debentures
|
0.2
|
0.2
|
|||||
Share-based
compensation plans
|
0.6
|
0.1
|
|||||
Weighted-average
number of common shares outstanding - Diluted
|
114.9
|
110.5
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Net
sales:
|
|||||||
Paper
Technology and Ventures
|
$
|
283.2
|
$
|
254.2
|
|||
Aqualon
Group
|
219.1
|
203.9
|
|||||
FiberVisions
|
—
|
69.2
|
|||||
|
$
|
502.3
|
$
|
527.3
|
|||
Profit
from operations(1):
|
|||||||
Paper
Technology and Ventures
|
$
|
28.0
|
$
|
14.6
|
|||
Aqualon
Group
|
47.6
|
39.5
|
|||||
FiberVisions
|
—
|
0.5
|
|||||
Corporate
items (2)
|
(15.7
|
)
|
2.3
|
||||
|
$
|
59.9
|
$
|
56.9
|
|||
Depreciation
and amortization:
|
|||||||
Paper
Technology and Ventures
|
$
|
10.1
|
$
|
12.7
|
|||
Aqualon
Group
|
11.2
|
10.0
|
|||||
Corporate
items
|
5.3
|
2.2
|
|||||
$
|
26.6
|
$
|
24.9
|
||||
Capital
expenditures:
|
|||||||
Paper
Technology and Ventures
|
$
|
5.0
|
$
|
2.8
|
|||
Aqualon
Group
|
18.4
|
4.2
|
|||||
Corporate
items
|
0.8
|
1.1
|
|||||
|
$
|
24.2
|
$
|
8.1
|
March
31, 2007
|
December
31, 2006
|
||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
Value
|
Value
|
Value
|
Value
|
||||||||||
Deferred
charges and other assets:
|
|||||||||||||
Investment
securities available for sale
|
$
|
2.6
|
$
|
2.6
|
$
|
2.6
|
$
|
2.6
|
|||||
Foreign
exchange contracts, net
|
—
|
—
|
(0.1
|
)
|
(0.1
|
)
|
|||||||
Current
and long-term debt obligations
|
977.1
|
937.6
|
995.5
|
964.2
|
|||||||||
Deferred
credits and other liabilities:
|
|||||||||||||
Cross
currency interest rate swaps
|
60.3
|
60.3
|
53.2
|
53.2
|
Condensed
Consolidating Statement of Operations
|
||||||||||||||||
Three
Months Ended March 31, 2007
|
||||||||||||||||
Unconsolidated
|
||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||
Net
sales
|
$
|
154.6
|
$
|
108.9
|
$
|
285.2
|
$
|
(46.4
|
)
|
$
|
502.3
|
|||||
Cost
of sales
|
108.2
|
75.8
|
185.7
|
(46.3
|
)
|
323.4
|
||||||||||
Selling,
general and administrative expenses
|
26.3
|
32.2
|
35.2
|
—
|
93.7
|
|||||||||||
Research
and development
|
4.6
|
4.5
|
1.3
|
—
|
10.4
|
|||||||||||
Intangible
asset amortization
|
1.5
|
0.2
|
0.1
|
—
|
1.8
|
|||||||||||
Other
operating expense, net
|
11.9
|
0.1
|
1.1
|
—
|
13.1
|
|||||||||||
Profit
(loss) from operations
|
2.1
|
(3.9
|
)
|
61.8
|
(0.1
|
)
|
59.9
|
|||||||||
Interest
and debt expense (income), net
|
45.2
|
(29.0
|
)
|
1.0
|
—
|
17.2
|
||||||||||
Vertac
litigation charges
|
1.5
|
—
|
—
|
—
|
1.5
|
|||||||||||
Other
expense, net
|
2.0
|
1.0
|
0.5
|
(0.2
|
)
|
3.3
|
||||||||||
Income
(loss) before income taxes, minority interests and equity (loss)
income
|
(46.6
|
)
|
24.1
|
60.3
|
0.1
|
37.9
|
||||||||||
(Benefit)
provision for income taxes
|
(58.9
|
)
|
8.8
|
13.4
|
0.1
|
(36.6
|
)
|
|||||||||
Income
before minority interests and equity (loss) income
|
12.3
|
15.3
|
46.9
|
—
|
74.5
|
|||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(0.5
|
)
|
—
|
(0.5
|
)
|
|||||||||
Equity
(loss) income of affiliated companies
|
—
|
(0.3
|
)
|
0.2
|
(0.4
|
)
|
(0.5
|
)
|
||||||||
Equity
income (loss) from consolidated subsidiaries
|
61.2
|
—
|
—
|
(61.2
|
)
|
—
|
||||||||||
Net
income
|
$
|
73.5
|
$
|
15.0
|
$
|
46.6
|
$
|
(61.6
|
)
|
$
|
73.5
|
Condensed
Consolidating Statement of Operations
|
||||||||||||||||
Three
Months Ended March 31, 2006
|
||||||||||||||||
Unconsolidated
|
||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||
Net
sales
|
$
|
140.4
|
$
|
139.8
|
$
|
286.1
|
$
|
(39.0
|
)
|
$
|
527.3
|
|||||
Cost
of sales
|
97.6
|
105.3
|
196.9
|
(39.1
|
)
|
360.7
|
||||||||||
Selling,
general and administrative expenses
|
23.4
|
32.3
|
35.6
|
—
|
91.3
|
|||||||||||
Research
and development
|
4.6
|
4.5
|
0.5
|
—
|
9.6
|
|||||||||||
Intangible
asset amortization
|
1.5
|
—
|
0.1
|
—
|
1.6
|
|||||||||||
Other
operating expense (income), net
|
(1.3
|
)
|
2.7
|
5.8
|
—
|
7.2
|
||||||||||
Profit
(loss) from operations
|
14.6
|
(5.0
|
)
|
47.2
|
0.1
|
56.9
|
||||||||||
Interest
and debt expense (income), net
|
43.4
|
(23.0
|
)
|
0.3
|
—
|
20.7
|
||||||||||
Other
expense, net
|
8.9
|
1.5
|
0.2
|
—
|
10.6
|
|||||||||||
Income
(loss) before income taxes, minority interests and equity (loss)
income
|
(37.7
|
)
|
16.5
|
46.7
|
0.1
|
25.6
|
||||||||||
Provision
(benefit) for income taxes
|
(1.7
|
)
|
6.0
|
6.4
|
—
|
10.7
|
||||||||||
Income
(loss) before minority interests and equity (loss) income
|
(36.0
|
)
|
10.5
|
40.3
|
0.1
|
14.9
|
||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(0.1
|
)
|
—
|
(0.1
|
)
|
|||||||||
Equity
(loss) income of affiliated companies
|
—
|
(0.1
|
)
|
(0.3
|
)
|
—
|
(0.4
|
)
|
||||||||
Equity
income (loss) from consolidated subsidiaries
|
50.4
|
3.0
|
(3.3
|
)
|
(50.1
|
)
|
—
|
|||||||||
Net
income from continuing operations before discontinued operations
and
cumulative effect of change in accounting principle
|
14.4
|
13.4
|
36.6
|
(50.0
|
)
|
14.4
|
||||||||||
Net
loss from discontinued operations, net of tax
|
(0.6
|
)
|
—
|
—
|
—
|
(0.6
|
)
|
|||||||||
Net
income before cumulative effect of change in accounting principle
|
13.8
|
13.4
|
36.6
|
(50.0
|
)
|
13.8
|
||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
0.9
|
—
|
—
|
—
|
0.9
|
|||||||||||
Net
income
|
$
|
14.7
|
$
|
13.4
|
$
|
36.6
|
$
|
(50.0
|
)
|
$
|
14.7
|
Condensed
Consolidating Balance Sheet
|
||||||||||||||||
As
of March 31, 2007
|
||||||||||||||||
Unconsolidated
|
|
|||||||||||||||
|
Guarantor
|
Non-Guarantor
|
Eliminations
and
|
|||||||||||||
Assets
|
Parent
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Consolidated
|
|||||||||||
Current
assets
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
95.3
|
$
|
0.5
|
$
|
64.0
|
$
|
—
|
$
|
159.8
|
||||||
Accounts
receivable, net
|
64.7
|
45.8
|
229.3
|
0.3
|
340.1
|
|||||||||||
Intercompany
receivables
|
63.1
|
(1.2
|
)
|
(5.2
|
)
|
(56.7
|
)
|
—
|
||||||||
Inventories
|
63.0
|
72.7
|
95.7
|
(0.5
|
)
|
230.9
|
||||||||||
Deferred
income taxes
|
58.7
|
3.3
|
9.2
|
—
|
71.2
|
|||||||||||
Income
taxes receivable
|
216.2
|
—
|
—
|
—
|
216.2
|
|||||||||||
Other
current assets
|
21.0
|
2.0
|
18.2
|
—
|
41.2
|
|||||||||||
Total
current assets
|
582.0
|
123.1
|
411.2
|
(56.9
|
)
|
1,059.4
|
||||||||||
Property,
plant and equipment, net
|
129.4
|
136.1
|
337.3
|
—
|
602.8
|
|||||||||||
Investments
in subsidiaries and advances, net
|
2,610.2
|
84.8
|
—
|
(2,695.0
|
)
|
—
|
||||||||||
Intangible
assets, net
|
130.9
|
2.7
|
8.4
|
—
|
142.0
|
|||||||||||
Goodwill
|
58.7
|
37.6
|
387.1
|
—
|
483.4
|
|||||||||||
Deferred
income taxes
|
368.9
|
—
|
18.6
|
(2.1
|
)
|
385.4
|
||||||||||
Asbestos-related
assets
|
41.9
|
—
|
—
|
—
|
41.9
|
|||||||||||
Deferred
charges and other assets
|
82.7
|
28.1
|
26.0
|
—
|
136.8
|
|||||||||||
Total
assets
|
$
|
4,004.7
|
$
|
412.4
|
$
|
1,188.6
|
$
|
(2,754.0
|
)
|
$
|
2,851.7
|
|||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||
Current
liabilities
|
||||||||||||||||
Accounts
payable
|
$
|
54.8
|
$
|
31.1
|
$
|
102.7
|
$
|
—
|
$
|
188.6
|
||||||
Intercompany
payables
|
1.4
|
45.3
|
9.9
|
(56.6
|
)
|
—
|
||||||||||
Asbestos-related
liabilities
|
36.4
|
—
|
—
|
—
|
36.4
|
|||||||||||
Current
debt obligations
|
20.1
|
—
|
15.2
|
—
|
35.3
|
|||||||||||
Vertac
litigation liability
|
124.9
|
—
|
—
|
—
|
124.9
|
|||||||||||
Accrued
expenses
|
69.7
|
87.5
|
70.8
|
—
|
228.0
|
|||||||||||
Total
current liabilities
|
307.3
|
163.9
|
198.6
|
(56.6
|
)
|
613.2
|
||||||||||
Long-term
debt
|
916.6
|
—
|
25.2
|
—
|
941.8
|
|||||||||||
Deferred
income taxes
|
—
|
2.2
|
72.0
|
(2.1
|
)
|
72.1
|
||||||||||
Pension
obligations
|
187.2
|
—
|
55.2
|
—
|
242.4
|
|||||||||||
Other
postretirement benefit obligations
|
137.5
|
—
|
3.0
|
—
|
140.5
|
|||||||||||
Deferred
credits and other liabilities
|
223.5
|
15.9
|
18.0
|
—
|
257.4
|
|||||||||||
Asbestos-related
liabilities
|
230.2
|
—
|
—
|
—
|
230.2
|
|||||||||||
Intercompany
notes payable (receivable)
|
1,661.5
|
(1,455.0
|
)
|
(206.5
|
)
|
—
|
—
|
|||||||||
Minority
interests
|
—
|
—
|
13.2
|
—
|
13.2
|
|||||||||||
Total
stockholders' equity
|
340.9
|
1,685.4
|
1,009.9
|
(2,695.3
|
)
|
340.9
|
||||||||||
Total
liabilities and stockholders' equity
|
$
|
4,004.7
|
$
|
412.4
|
$
|
1,188.6
|
$
|
(2,754.0
|
)
|
$
|
2,851.7
|
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||
Three
Months Ended March 31, 2007
|
||||||||||||||||
Unconsolidated
|
||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||
Net
Cash Provided By Operating Activities
|
$
|
57.7
|
$
|
50.2
|
$
|
5.9
|
$
|
(88.0
|
)
|
$
|
25.8
|
|||||
Cash
Flow From Investing Activities:
|
||||||||||||||||
Capital
expenditures
|
(2.9
|
)
|
(6.9
|
)
|
(14.4
|
)
|
—
|
(24.2
|
)
|
|||||||
Acquisitions
and investments, net
|
—
|
(0.9
|
)
|
—
|
—
|
(0.9
|
)
|
|||||||||
Net
cash used in investing activities
|
(2.9
|
)
|
(7.8
|
)
|
(14.4
|
)
|
—
|
(25.1
|
)
|
|||||||
Cash
Flow From Financing Activities:
|
||||||||||||||||
Long-term
debt proceeds
|
—
|
—
|
2.8
|
—
|
2.8
|
|||||||||||
Long-term
debt payments
|
(21.0
|
)
|
—
|
(1.2
|
)
|
—
|
(22.2
|
)
|
||||||||
Change
in short-term debt
|
—
|
—
|
0.6
|
—
|
0.6
|
|||||||||||
Change
in intercompany advances
|
(34.0
|
)
|
(42.4
|
)
|
(10.5
|
)
|
86.9
|
—
|
||||||||
Proceeds
from the exercise of stock options
|
3.8
|
—
|
—
|
—
|
3.8
|
|||||||||||
Dividends
paid
|
—
|
—
|
(1.1
|
)
|
1.1
|
—
|
||||||||||
Other,
net
|
2.0
|
—
|
—
|
—
|
2.0
|
|||||||||||
Net
cash used in financing activities
|
(49.2
|
)
|
(42.4
|
)
|
(9.4
|
)
|
88.0
|
(13.0
|
)
|
|||||||
Effect
of exchange rate changes on cash
|
—
|
—
|
0.3
|
—
|
0.3
|
|||||||||||
Net
(decrease) increase in cash and cash
equivalents
|
5.6
|
—
|
(17.6
|
)
|
—
|
(12.0
|
)
|
|||||||||
Cash
and cash equivalents at beginning of period
|
89.7
|
0.5
|
81.6
|
—
|
171.8
|
|||||||||||
Cash
and cash equivalents at end of period
|
$
|
95.3
|
$
|
0.5
|
$
|
64.0
|
$
|
—
|
$
|
159.8
|
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||
Three
Months Ended March 31, 2006
|
||||||||||||||||
Unconsolidated
|
||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||
Net
Cash Provided By (Used In)
Operating Activities
|
$
|
21.5
|
$
|
(15.5
|
)
|
$
|
100.7
|
$
|
(79.0
|
)
|
$
|
27.7
|
||||
Cash
Flow From Investing Activities:
|
||||||||||||||||
Capital
expenditures
|
(2.0
|
)
|
(3.5
|
)
|
(2.6
|
)
|
—
|
(8.1
|
)
|
|||||||
Acquisitions
and investments, net
|
—
|
(21.4
|
)
|
(5.0
|
)
|
—
|
(26.4
|
)
|
||||||||
Proceeds
from sale of 51%
interest
in FiberVisions, net
|
27.0
|
—
|
—
|
—
|
27.0
|
|||||||||||
Other,
net
|
(0.2
|
)
|
—
|
0.1
|
—
|
(0.1
|
)
|
|||||||||
Net
cash (used in) provided by investing activities
|
24.8
|
(24.9
|
)
|
(7.5
|
)
|
—
|
(7.6
|
)
|
||||||||
Cash
Flow From Financing Activities:
|
||||||||||||||||
Long-term
debt issued by FiberVisions,
net
of issuance costs
|
83.7
|
—
|
—
|
—
|
83.7
|
|||||||||||
Long-term
debt payments
|
(12.0
|
)
|
—
|
(6.8
|
)
|
—
|
(18.8
|
)
|
||||||||
Change
in short-term debt
|
—
|
—
|
(2.5
|
)
|
—
|
(2.5
|
)
|
|||||||||
Change
in intercompany advances
|
(13.5
|
)
|
41.8
|
(18.7
|
)
|
(9.6
|
)
|
—
|
||||||||
Proceeds
from the exercise of stock options
|
0.1
|
—
|
—
|
—
|
0.1
|
|||||||||||
Dividends
paid
|
—
|
—
|
(88.6
|
)
|
88.6
|
—
|
||||||||||
Other,
net
|
0.1
|
—
|
—
|
—
|
0.1
|
|||||||||||
Net
cash provided by (used in) financing
activities
|
58.4
|
41.8
|
(116.6
|
)
|
79.0
|
62.6
|
||||||||||
Effect
of exchange rate changes on cash
|
—
|
—
|
0.5
|
—
|
0.5
|
|||||||||||
Net
increase (decrease) in cash and cash
equivalents
|
104.7
|
1.4
|
(22.9
|
)
|
—
|
83.2
|
||||||||||
Cash
and cash equivalents at beginning of period
|
6.5
|
1.0
|
69.8
|
—
|
77.3
|
|||||||||||
Cash
and cash equivalents at end of period
|
$
|
111.2
|
$
|
2.4
|
$
|
46.9
|
$
|
—
|
$
|
160.5
|
2007
|
2006
|
||||||
North
America
|
49
|
%
|
47
|
%
|
|||
Europe
|
35
|
%
|
37
|
%
|
|||
Asia
Pacific
|
11
|
%
|
11
|
%
|
|||
Latin
America
|
5
|
%
|
5
|
%
|
|||
Consolidated
|
100
|
%
|
100
|
%
|
2007
|
2006
|
||||||
Paper
Technologies and Ventures
|
56
|
%
|
48
|
%
|
|||
Aqualon
Group
|
44
|
%
|
39
|
%
|
|||
FiberVisions
|
—
|
13
|
%
|
||||
Consolidated
|
100
|
%
|
100
|
%
|
2007
|
2006
|
Change
|
||||||||
Net
sales
|
$
|
502.3
|
$
|
527.3
|
$
|
(25.0
|
)
|
%
Change
Excluding
|
|||||||||||||
Regions
|
2007
|
2006
|
%Change
|
ROE
|
|||||||||
North
America
|
$
|
247.7
|
$
|
262.6
|
(6
|
)%
|
(6
|
)%
|
|||||
Europe
|
174.9
|
177.1
|
(1
|
)%
|
(9
|
)%
|
|||||||
Asia
Pacific
|
52.9
|
57.5
|
(8
|
)%
|
(9
|
)%
|
|||||||
Latin
America
|
26.8
|
30.1
|
(11
|
)%
|
(12
|
)%
|
|||||||
All
regions
|
$
|
502.3
|
$
|
527.3
|
(5
|
)%
|
(7
|
)%
|
2007
|
2006
|
Change
|
||||||||
Cost
of sales
|
$
|
323.4
|
$
|
360.7
|
$
|
(37.3
|
)
|
|||
As
a % of sales
|
64
|
%
|
68
|
%
|
2007
|
2006
|
Change
|
||||||||
Selling,
general and administrative
expenses
|
$
|
93.7
|
$
|
91.3
|
$
|
2.4
|
||||
As
a % of sales
|
19
|
%
|
17
|
%
|
2007
|
2006
|
Change
|
||||||||
Research
and development
|
$
|
10.4
|
$
|
9.6
|
$
|
0.8
|
||||
As
a % of sales
|
2
|
%
|
2
|
%
|
2007
|
2006
|
Change
|
||||||||
Intangible
asset amortization
|
$
|
1.8
|
$
|
1.6
|
$
|
0.2
|
2007
|
2006
|
Change
|
||||||||
Other
operating expense, net
|
$
|
13.1
|
$
|
7.2
|
$
|
5.9
|
2007
|
2006
|
Change
|
||||||||
Interest
and debt expense
|
$
|
17.2
|
$
|
20.7
|
$
|
(3.5
|
)
|
2007
|
2006
|
Change
|
||||||||
Vertac
litigation charge
|
$
|
1.5
|
$
|
—
|
$
|
1.5
|
2007
|
2006
|
Change
|
||||||||
Other
expense, net
|
$
|
3.3
|
$
|
10.6
|
$
|
(7.3
|
)
|
2007
|
2006
|
Change
|
||||||||
(Benefit)
provision for income taxes
|
$
|
(36.6
|
)
|
$
|
10.7
|
$
|
(47.3
|
)
|
||
Effective
(benefit) tax rate
|
(97
|
%)
|
42
|
%
|
2007
|
2006
|
Change
|
||||||||
Minority
interests in earnings of consolidated
subsidiaries
|
$
|
(0.5
|
)
|
$
|
(0.1
|
)
|
$
|
(0.4
|
)
|
2007
|
2006
|
Change
|
||||||||
Equity
(loss) income of affiliated companies, net of tax
|
$
|
(0.5
|
)
|
$
|
(0.4
|
)
|
$
|
(0.1
|
)
|
2007
|
2006
|
Change
|
||||||||
Net
loss from discontinued operations, net of tax
|
$
|
—
|
$
|
(0.6
|
)
|
$
|
0.6
|
2007
|
2006
|
Change
|
||||||||
Cumulative
effect of change in accounting principle, net of
tax
|
$
|
—
|
$
|
0.9
|
$
|
(0.9
|
)
|
2007
|
2006
|
Change
|
%
Change
|
||||||||||
Net
sales:
|
|||||||||||||
Paper
Technologies and Ventures
|
$
|
283.2
|
$
|
254.2
|
$
|
29.0
|
11
|
%
|
|||||
Aqualon
Group
|
219.1
|
203.9
|
15.2
|
7
|
%
|
||||||||
FiberVisions
|
—
|
69.2
|
(69.2
|
)
|
(100
|
)%
|
|||||||
Consolidated
|
$
|
502.3
|
$
|
527.3
|
$
|
(25.0
|
)
|
(5
|
)%
|
||||
Profit
from operations:
|
|||||||||||||
Paper
Technologies and Ventures
|
$
|
28.0
|
$
|
14.6
|
$
|
13.4
|
92
|
%
|
|||||
Aqualon
Group
|
47.6
|
39.5
|
8.1
|
21
|
%
|
||||||||
FiberVisions
|
—
|
0.5
|
(0.5
|
)
|
(100
|
)%
|
|||||||
Corporate
Items
|
(15.7
|
)
|
2.3
|
(18.0
|
)
|
NM
|
|||||||
Consolidated
|
$
|
59.9
|
$
|
56.9
|
$
|
3.0
|
5
|
%
|
Net
Sales Percentage Increase (Decrease) from Prior Year Due
To:
|
||||||||||||||||
Volume
|
Product
Mix
|
Price
|
Rates
of
Exchange
|
Total
|
||||||||||||
Paper
Technologies and Ventures
|
7
|
%
|
(1)
|
%
|
2
|
%
|
3
|
%
|
11
|
%
|
||||||
Aqualon
Group
|
5
|
%
|
(3)
|
%
|
2
|
%
|
3
|
%
|
7
|
%
|
||||||
FiberVisions
|
(100
|
)%
|
—
|
—
|
—
|
(100
|
)%
|
|||||||||
Consolidated
|
(9
|
)%
|
(1
|
)%
|
2
|
%
|
3
|
%
|
(5
|
)%
|
2007
|
2006
|
||||||
Paper
Technologies
|
$
|
221.5
|
$
|
198.1
|
|||
Ventures
|
61.7
|
56.1
|
|||||
$
|
283.2
|
$
|
254.2
|
2007
|
2006
|
||||||
Coatings
and Construction
|
$
|
100.7
|
$
|
92.1
|
|||
Regulated
|
60.1
|
56.6
|
|||||
Energy
and Specialties
|
58.3
|
55.2
|
|||||
$
|
219.1
|
$
|
203.9
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
||||||
Severance,
restructuring and other exit costs
|
$
|
7.7
|
$
|
0.9
|
|||
Accelerated
depreciation and amortization
|
3.6
|
0.3
|
|||||
Legal
settlements, net
|
—
|
(3.6
|
)
|
||||
Dismantlement
costs
|
0.6
|
0.2
|
|||||
Unallocated
corporate costs
|
3.5
|
—
|
|||||
Other
miscellaneous expense (income), net
|
0.3
|
(0.1
|
)
|
||||
Total
Corporate items - expense (income)
|
$
|
15.7
|
$
|
(2.3
|
)
|
Operating
Activities
|
2007
|
2006
|
|||||
Net
income, depreciation, amortization and all other non-cash
items
|
$
|
91.5
|
$
|
48.1
|
|||
Changes
in working capital, net
|
(48.3
|
)
|
(18.4
|
)
|
|||
All
other sources and uses of cash
|
(17.4
|
)
|
(2.0
|
)
|
|||
Net
cash provided by operating activities
|
$
|
25.8
|
$
|
27.7
|
Investing
Activities
|
2007
|
2006
|
|||||
Capital
expenditures
|
$
|
24.2
|
$
|
8.1
|
|||
Acquisitions
and investments, net
|
0.9
|
26.4
|
|||||
Proceeds
from asset and investment dispositions and all other sources,
net
|
—
|
(26.9
|
)
|
||||
Net
cash used in investing activities
|
$
|
25.1
|
$
|
7.6
|
Financing
Activities
|
2007
|
2006
|
|||||
Long-term
debt payments
|
$
|
(22.2
|
)
|
$
|
(18.8
|
)
|
|
Long-term
debt proceeds and changes in short-term debt
|
3.4
|
(2.5
|
)
|
||||
Long-term
debt issued by FiberVisions, net of issuance costs
|
—
|
83.7
|
|||||
Proceeds
from the exercise of stock options and all other sources,
net
|
5.8
|
0.2
|
|||||
Net
cash (used in) provided by financing activities
|
$
|
(13.0
|
)
|
$
|
62.6
|
HERCULES
INCORPORATED
|
|||
By:
|
/s/
Allen A. Spizzo
|
||
Allen
A. Spizzo
|
|||
Vice
President and Chief Financial Officer
|
|||
(Principal
Financial Officer and Duly
|
|||
Authorized
Signatory)
|
|||
May
1, 2007
|
Number
|
Description
|
|
31.1*
|
Certification
of President and Chief Executive Officer Pursuant to Exchange Act
Rule 13a-14(a)/15d-14(a)
|
|
31.2*
|
Certification
of Vice President and Chief Financial Officer Pursuant to Exchange
Act
Rule 13a-14(a)/15d-14(a)
|
|
32.1*
|
Section 1350
Certification of President and Chief Executive Officer
|
|
32.2*
|
Section 1350
Certification of Vice President and Chief Financial
Officer
|