Mark
One
|
ý QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
For the quarterly period ended June 30, 2007
|
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE
SECURITIES EXCHANGE ACT OF
1934
|
Page
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3
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3
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3
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4
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5
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6
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6
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6
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6
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7
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7
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8
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8
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18
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20
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21
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22
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22
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22
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23
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24
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24
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25
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33
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33
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33
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35
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36
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41
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45
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47
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48
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50
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50
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51
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52
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52
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52
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53
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54
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|
55
|
(Unaudited)
|
||||||||||||||||
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
sales
|
$ |
549.0
|
$ |
501.0
|
$ |
1,051.3
|
$ |
1,028.3
|
||||||||
Cost
of sales
|
358.8
|
324.7
|
682.2
|
685.4
|
||||||||||||
Selling,
general and administrative expenses
|
95.2
|
90.7
|
188.9
|
182.0
|
||||||||||||
Research
and development
|
11.0
|
9.4
|
21.4
|
19.0
|
||||||||||||
Intangible
asset amortization (Note 3)
|
1.9
|
2.0
|
3.7
|
3.6
|
||||||||||||
Other
operating expense, net (Note 11)
|
7.6
|
8.6
|
20.7
|
15.8
|
||||||||||||
Profit
from operations
|
74.5
|
65.6
|
134.4
|
122.5
|
||||||||||||
Interest
and debt expense
|
17.8
|
16.7
|
35.0
|
37.4
|
||||||||||||
Vertac
response costs and litigation charges (Note
7)
|
17.5
|
106.0
|
19.0
|
106.0
|
||||||||||||
Other
expense, net (Note 12)
|
15.7
|
21.1
|
19.0
|
31.7
|
||||||||||||
Income
(loss) before income taxes, minority interests and equity
loss
|
23.5
|
(78.2 | ) |
61.4
|
(52.6 | ) | ||||||||||
(Benefit)
provision for income taxes (Note 13)
|
(11.5 | ) | (27.5 | ) | (48.1 | ) | (16.8 | ) | ||||||||
Income
(loss) before minority interests and equity loss
|
35.0
|
(50.7 | ) |
109.5
|
(35.8 | ) | ||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
(0.5 | ) | (0.3 | ) | (1.0 | ) | (0.4 | ) | ||||||||
Equity
loss of affiliated companies, net of tax
|
—
|
(0.6 | ) | (0.5 | ) | (1.0 | ) | |||||||||
Net
income (loss) from continuing operations before discontinued operations
and cumulative effect of change in accounting principle
|
34.5
|
(51.6 | ) |
108.0
|
(37.2 | ) | ||||||||||
Net
loss from discontinued operations, net of tax
|
—
|
(0.7 | ) |
—
|
(1.3 | ) | ||||||||||
Net
income (loss) before cumulative effect of change in accounting
principle
|
34.5
|
(52.3 | ) |
108.0
|
(38.5 | ) | ||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
0.9
|
||||||||||||
Net
income (loss)
|
$ |
34.5
|
$ | (52.3 | ) | $ |
108.0
|
$ | (37.6 | ) | ||||||
Earnings
(loss) per share (Note 14):
|
||||||||||||||||
Basic
earnings (loss) per share
|
||||||||||||||||
Continuing
operations
|
$ |
0.30
|
$ | (0.46 | ) | $ |
0.95
|
$ | (0.34 | ) | ||||||
Discontinued
operations
|
—
|
(0.01 | ) |
—
|
(0.01 | ) | ||||||||||
Cumulative
effect of change in
accounting principle
|
—
|
—
|
—
|
0.01
|
||||||||||||
Net
income (loss)
|
$ |
0.30
|
$ | (0.47 | ) | $ |
0.95
|
$ | (0.34 | ) | ||||||
Weighted
average number of shares
(millions)
|
114.6
|
110.8
|
114.3
|
110.5
|
||||||||||||
Diluted
earnings (loss) per share
|
||||||||||||||||
Continuing
operations
|
$ |
0.30
|
$ | (0.46 | ) | $ |
0.94
|
$ | (0.34 | ) | ||||||
Discontinued
operations
|
—
|
(0.01 | ) |
—
|
(0.01 | ) | ||||||||||
Cumulative
effect of change in
accounting principle
|
—
|
—
|
—
|
0.01
|
||||||||||||
Net
income (loss)
|
$ |
0.30
|
$ | (0.47 | ) | $ |
0.94
|
$ | (0.34 | ) | ||||||
Weighted
average number of shares
(millions)
|
115.3
|
110.8
|
115.0
|
110.5
|
||||||||||||
Net
income (loss)
|
$ |
34.5
|
$ | (52.3 | ) | $ |
108.0
|
$ | (37.6 | ) | ||||||
Foreign
currency translation
|
19.8
|
30.5
|
25.9
|
37.9
|
||||||||||||
Pension
and postretirement benefit adjustments, net of tax
|
7.4
|
(1.5 | ) |
13.8
|
62.9
|
|||||||||||
Revaluation
of hedges, net of tax
|
(2.9 | ) | (22.4 | ) | (7.5 | ) | (27.6 | ) | ||||||||
Comprehensive
income (loss)
|
$ |
58.8
|
$ | (45.7 | ) | $ |
140.2
|
$ |
35.6
|
(Dollars
in millions)
|
(Unaudited)
|
|||||||
June
30,
2007
|
December 31,
2006
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ |
237.9
|
$ |
171.8
|
||||
Accounts
receivable, net (Note 9)
|
376.7
|
326.6
|
||||||
Inventories
(Note 9)
|
223.2
|
210.6
|
||||||
Deferred
income taxes
|
37.5
|
70.2
|
||||||
Current
assets of discontinued operations
|
—
|
0.4
|
||||||
Income
taxes receivable
|
49.2
|
170.8
|
||||||
Other
current assets
|
44.7
|
34.1
|
||||||
Total
current assets
|
969.2
|
984.5
|
||||||
Property,
plant, and equipment, net (Note 9)
|
613.0
|
600.4
|
||||||
Intangible
assets, net (Note 3)
|
142.9
|
143.1
|
||||||
Goodwill
(Note 3)
|
496.1
|
481.5
|
||||||
Deferred
income taxes
|
389.6
|
374.6
|
||||||
Asbestos-related
assets (Note 7)
|
37.6
|
87.5
|
||||||
Deferred
charges and other assets
|
125.5
|
136.9
|
||||||
Total
assets
|
$ |
2,773.9
|
$ |
2,808.5
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ |
204.2
|
$ |
205.3
|
||||
Asbestos-related
liabilities (Note 7)
|
30.0
|
36.4
|
||||||
Current
debt obligations (Note 4)
|
126.1
|
35.8
|
||||||
Vertac
obligations (Note 7)
|
18.7
|
123.5
|
||||||
Accrued
expenses
|
207.3
|
216.8
|
||||||
Deferred
income taxes
|
11.6
|
11.8
|
||||||
Total
current liabilities
|
597.9
|
629.6
|
||||||
Long-term
debt (Note 4)
|
833.0
|
959.7
|
||||||
Deferred
income taxes
|
73.4
|
69.7
|
||||||
Pension
obligations
|
228.4
|
262.5
|
||||||
Other
postretirement benefit obligations
|
138.8
|
142.2
|
||||||
Deferred
credits and other liabilities
|
252.7
|
255.6
|
||||||
Asbestos-related
liabilities (Note 7)
|
232.5
|
233.6
|
||||||
Total
liabilities
|
2,356.7
|
2,552.9
|
||||||
Commitments
and contingencies (Note 7)
|
—
|
—
|
||||||
Minority
interests
|
13.7
|
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
|
438.0
|
454.9
|
||||||
Unearned
compensation
|
(32.7 | ) | (42.1 | ) | ||||
Accumulated
other comprehensive losses
|
(377.4 | ) | (409.6 | ) | ||||
Retained
earnings
|
1,844.0
|
1,734.1
|
||||||
1,955.2
|
1,820.6
|
|||||||
Reacquired
stock, at cost (2007 – 43.3 million shares; 2006 – 44.0 million
shares)
|
(1,551.7 | ) | (1,577.7 | ) | ||||
Total
stockholders’ equity
|
403.5
|
242.9
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
2,773.9
|
$ |
2,808.5
|
(Dollars
in millions)
|
(Unaudited)
|
|||||||
Six
Months Ended
June
30,
|
||||||||
2007
|
2006
|
|||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
income (loss)
|
$ |
108.0
|
$ | (37.6 | ) | |||
Adjustments
to reconcile net income (loss) to net cash provided by operating
activities:
|
||||||||
Depreciation
|
34.9
|
36.9
|
||||||
Amortization
|
19.1
|
11.7
|
||||||
Deferred
income tax provision
|
15.6
|
(32.8 | ) | |||||
Write-off
of debt issuance costs
|
—
|
1.5
|
||||||
Loss
on sale of 51% interest in FiberVisions
|
(0.3 | ) |
10.6
|
|||||
Minority
interests in earnings of consolidated subsidiaries
|
1.0
|
0.4
|
||||||
Stock-based
compensation
|
6.0
|
2.9
|
||||||
Other
non-cash charges and credits, net
|
(5.0 | ) |
0.2
|
|||||
Accruals
and deferrals of cash receipts and payments (net of acquisitions
and
dispositions):
|
||||||||
Accounts
receivable, net
|
(43.8 | ) | (30.3 | ) | ||||
Inventories
|
(9.9 | ) | (1.0 | ) | ||||
Asbestos-related
assets and liabilities, net
|
43.8
|
6.5
|
||||||
Other
current assets
|
(3.2 | ) |
3.4
|
|||||
Accounts
payable
|
(4.2 | ) |
2.2
|
|||||
Vertac
litigation liability
|
(104.8 | ) |
106.0
|
|||||
Accrued
expenses
|
7.5
|
0.2
|
||||||
Income
taxes receivable and payable
|
107.1
|
(5.2 | ) | |||||
Pension
and postretirement benefit obligations
|
(15.8 | ) |
12.7
|
|||||
Non-current
assets and liabilities
|
(15.5 | ) | (16.4 | ) | ||||
FiberVisions
net assets held for sale
|
—
|
(7.9 | ) | |||||
Net
cash provided by operating activities
|
140.5
|
64.0
|
||||||
Cash
Flows from Investing Activities:
|
||||||||
Capital
expenditures
|
(53.8 | ) | (22.9 | ) | ||||
Acquisitions
and investments, net of cash recognized upon consolidation
|
(0.9 | ) | (26.1 | ) | ||||
Proceeds
from sale of 51% interest in FiberVisions, net of transaction
costs
|
(1.2 | ) |
25.1
|
|||||
Proceeds
of asset disposals, net of transaction costs
|
11.4
|
0.3
|
||||||
Other,
net
|
(0.1 | ) | (1.0 | ) | ||||
Net
cash used in investing activities
|
(44.6 | ) | (24.6 | ) | ||||
Cash
Flows from Financing Activities:
|
||||||||
Long-term
debt issued by FiberVisions, net of issuance costs
|
—
|
83.7
|
||||||
Long-term
debt proceeds
|
3.3
|
—
|
||||||
Long-term
debt payments
|
(47.0 | ) | (122.7 | ) | ||||
Change
in short-term debt
|
5.8
|
(0.8 | ) | |||||
Proceeds
from the exercise of stock options
|
4.9
|
3.5
|
||||||
Other,
net including income tax benefits attributable to stock-based
compensation
|
2.1
|
0.4
|
||||||
Net
cash used in financing activities
|
(30.9 | ) | (35.9 | ) | ||||
Effect
of exchange rate changes on cash
|
1.1
|
1.1
|
||||||
Net
increase in cash and cash equivalents
|
66.1
|
4.6
|
||||||
Cash
and cash equivalents – beginning of period
|
171.8
|
77.3
|
||||||
Cash
and cash equivalents – end of period
|
$ |
237.9
|
$ |
81.9
|
1.
|
Basis
of
Presentation
|
2.
|
Recent
Accounting
Pronouncements
|
3.
|
Intangible
Assets and
Goodwill
|
June
30, 2007
|
December
31, 2006
|
|||||||||||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
Gross
|
Amortization
|
Net
|
Gross
|
Amortization
|
Net
|
|||||||||||||||||||
Customer
relationships
|
$ |
90.6
|
$ |
19.8
|
$ |
70.8
|
$ |
90.0
|
$ |
18.6
|
$ |
71.4
|
||||||||||||
Trademarks
and tradenames
|
73.9
|
16.6
|
57.3
|
73.9
|
15.6
|
58.3
|
||||||||||||||||||
Other
intangible assets
|
35.1
|
20.3
|
14.8
|
32.2
|
18.8
|
13.4
|
||||||||||||||||||
$ |
199.6
|
$ |
56.7
|
$ |
142.9
|
$ |
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
|
14.3
|
0.3
|
14.6
|
|||||||||
Balance
at June 30, 2007
|
$ |
443.8
|
$ |
52.3
|
$ |
496.1
|
4.
|
June
30,
2007
|
December 31,
2006
|
|||||||
Term
B Loan due 2010
|
$ |
328.0
|
$ |
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
|
214.6
|
214.1
|
||||||
Term
loans at rates ranging from 5.5575% to 6.1101% due in varying amounts
thru
2011
|
35.0
|
28.1
|
||||||
Other
|
13.1
|
9.8
|
||||||
959.1
|
995.5
|
|||||||
Less:
Current debt obligations
|
126.1
|
35.8
|
||||||
Long-term
debt
|
$ |
833.0
|
$ |
959.7
|
5.
|
Pension
and Other Postretirement
Benefits
|
Pension
Benefits
|
||||||||||||||||
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
periodic benefit cost:
|
||||||||||||||||
Service
cost
|
$ |
4.3
|
$ |
4.1
|
$ |
8.8
|
$ |
8.8
|
||||||||
Interest
cost
|
25.8
|
25.0
|
51.7
|
49.9
|
||||||||||||
Expected
return on plan assets
|
(30.4 | ) | (28.0 | ) | (60.7 | ) | (56.4 | ) | ||||||||
Amortization
and deferrals
|
(0.6 | ) | (0.5 | ) | (1.3 | ) | (1.0 | ) | ||||||||
Actuarial
losses recognized
|
10.6
|
10.5
|
21.5
|
22.5
|
||||||||||||
$ |
9.7
|
$ |
11.1
|
$ |
20.0
|
$ |
23.8
|
Other
Postretirement Benefits
|
||||||||||||||||
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
periodic benefit cost:
|
||||||||||||||||
Service
cost
|
$ |
0.1
|
$ |
0.1
|
$ |
0.2
|
$ |
0.3
|
||||||||
Interest
cost
|
1.9
|
2.2
|
4.1
|
4.3
|
||||||||||||
Amortization
and deferrals
|
(2.0 | ) | (1.9 | ) | (3.9 | ) | (4.0 | ) | ||||||||
Actuarial
losses recognized
|
2.1
|
1.9
|
4.3
|
3.6
|
||||||||||||
$ |
2.1
|
$ |
2.3
|
$ |
4.7
|
$ |
4.2
|
6.
|
Asset
Retirement
Obligations
|
Active
Sites
|
Inactive
Sites
|
Total
|
||||||||||
Balance
at December 31, 2006
|
$ |
9.9
|
$ |
66.4
|
$ |
76.3
|
||||||
Accretion
|
0.2
|
1.0
|
1.2
|
|||||||||
Settlement
payments
|
(1.0 | ) | (4.4 | ) | (5.4 | ) | ||||||
Foreign
currency translation
|
—
|
0.2
|
0.2
|
|||||||||
Other
|
(0.7 | ) |
0.4
|
(0.3 | ) | |||||||
Balance
at June 30, 2007
|
$ |
8.4
|
$ |
63.6
|
$ |
72.0
|
7.
|
Commitments
and
Contingencies
|
Balance
December 31, 2006
|
Interest
Income/
Additional
Accruals
|
Insurance
Recovered/
Liabilities
Settled
|
Accretion/
Reclassifi-
cation
|
Balance
June
30, 2007
|
||||||||||||||||
Asbestos-related
assets:
|
||||||||||||||||||||
Insurance
receivable
|
$ |
32.8
|
$ |
—
|
$ | (16.5 | ) | $ |
0.3
|
$ |
16.6
|
|||||||||
Restricted
cash in trust
|
54.7
|
1.1
|
(34.8 | ) |
—
|
21.0
|
||||||||||||||
Asbestos-related
assets
|
$ |
87.5
|
$ |
1.1
|
$ | (51.3 | ) | $ |
0.3
|
$ |
37.6
|
|||||||||
Asbestos-related
liabilities:
|
||||||||||||||||||||
Asbestos-related
liabilities, current
|
$ |
36.4
|
$ |
—
|
$ |
—
|
$ | (6.4 | ) | $ |
30.0
|
|||||||||
Asbestos-related
liabilities, non-current
|
233.6
|
—
|
(7.5 | ) | $ |
6.4
|
232.5
|
|||||||||||||
Total
asbestos-related liabilities
|
$ |
270.0
|
$ |
—
|
$ | (7.5 | ) | $ |
—
|
$ |
262.5
|
2007
|
2006
|
|||||||
Expected
volatility
|
30.00 | % | 30.10 | % | ||||
Expected
dividend yield
|
0.00 | % | 0.00 | % | ||||
Expected
life (in years)
|
6.0
|
6.0
|
||||||
Risk-free
interest rate
|
4.68 | % | 4.60 | % |
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
|
(343,822 | ) |
14.39
|
—
|
—
|
|||||||||||
Forfeited
|
(772,120 | ) |
38.86
|
(208,500 | ) |
40.20
|
||||||||||
Outstanding
at June 30, 2007
|
3,791,486
|
$ |
20.71
|
512,490
|
$ |
40.97
|
||||||||||
Exercisable
at June 30, 2007
|
3,212,954
|
$ |
21.53
|
27,290
|
$ |
38.75
|
Number
of
Shares
|
Weighted-Average
Grant Date Fair
Value
|
|||||||
Outstanding
at December 31, 2006
|
2,057,408
|
$ |
12.05
|
|||||
Granted
|
367,677
|
20.90
|
||||||
Vested(1)
|
(597,524 | ) |
11.88
|
|||||
Forfeited
|
(5,312 | ) |
19.49
|
|||||
Outstanding
at June 30, 2007
|
1,822,249
|
$ |
13.87
|
June
30,
2007
|
December 31,
2006
|
|||||||
Unrecognized
compensation cost:
|
||||||||
Stock
options
|
$ |
2.6
|
$ |
1.6
|
||||
Restricted
stock
|
$ |
14.7
|
$ |
12.9
|
||||
Weighted-average
remaining periods for recognition (years):
|
||||||||
Stock
options
|
1.9
|
1.9
|
||||||
Restricted
stock
|
3.8
|
3.5
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Compensation
cost recognized:
|
||||||||||||||||
Stock
options
|
$ |
0.5
|
$ |
0.7
|
$ |
1.0
|
$ |
1.0
|
||||||||
Restricted
stock (1)
|
$ |
1.2
|
$ |
1.0
|
$ |
5.0
|
$ |
1.9
|
||||||||
Fair
value of options granted (per share)
|
$ |
—
|
$ |
5.40
|
$ |
8.26
|
$ |
4.60
|
||||||||
Intrinsic
value of options exercised
|
$ |
0.4
|
$ |
1.1
|
$ |
1.8
|
$ |
1.1
|
||||||||
Tax
benefits recognized in Additional paid-in capital:
|
||||||||||||||||
Stock
options
|
$ |
0.1
|
$ |
0.3
|
$ |
0.6
|
$ |
0.3
|
||||||||
Restricted
stock
|
$ |
0.1
|
$ |
0.1
|
$ |
1.8
|
$ |
0.3
|
June
30,
2007
|
December 31,
2006
|
|||||||
Accounts
receivable, gross
|
$ |
381.4
|
$ |
332.2
|
||||
Allowance
for doubtful accounts
|
(4.7 | ) | (5.6 | ) | ||||
Accounts
receivable, net
|
$ |
376.7
|
$ |
326.6
|
||||
Inventories:
|
||||||||
Finished goods
|
$ |
123.0
|
$ |
115.4
|
||||
Raw materials and work-in-process
|
77.7
|
73.3
|
||||||
Supplies
|
22.5
|
21.9
|
||||||
$ |
223.2
|
$ |
210.6
|
|||||
Property,
plant and equipment:
|
||||||||
Land
|
$ |
16.4
|
$ |
16.4
|
||||
Buildings and equipment
|
1,636.2
|
1,643.0
|
||||||
Construction in progress
|
106.3
|
85.0
|
||||||
1,758.9
|
1,744.4
|
|||||||
Accumulated depreciation and amortization
|
(1,145.9 | ) | (1,144.0 | ) | ||||
Property,
plant and equipment, net
|
$ |
613.0
|
$ |
600.4
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Depreciation:
|
||||||||||||||||
Included in Cost of sales and Selling, general and administrative
(“SG&A”) expenses
|
$ |
17.6
|
$ |
16.9
|
$ |
34.4
|
$ |
33.0
|
||||||||
Accelerated depreciation included in Other operating expense,
net
|
0.2
|
0.9
|
0.5
|
3.9
|
||||||||||||
$ |
17.8
|
$ |
17.8
|
$ |
34.9
|
$ |
36.9
|
|||||||||
Amortization:
|
||||||||||||||||
Intangible
assets
|
$ |
1.9
|
$ |
2.0
|
$ |
3.7
|
$ |
3.6
|
||||||||
Capitalized
software (normal basis) included in SG&A expenses
|
3.9
|
3.7
|
7.7
|
7.4
|
||||||||||||
Accelerated amortization of capitalized software included in Other
operating expense, net
|
3.4
|
—
|
6.9
|
—
|
||||||||||||
Deferred
financing costs included in Interest and debt expense
|
0.4
|
0.2
|
0.8
|
0.7
|
||||||||||||
$ |
9.6
|
$ |
5.9
|
$ |
19.1
|
$ |
11.7
|
|||||||||
Cash
paid during the period for:
|
||||||||||||||||
Interest
|
$ |
20.2
|
$ |
30.8
|
$ |
33.6
|
$ |
45.8
|
||||||||
Income
taxes, net of refunds received
|
(178.7 | ) |
11.0
|
(171.6 | ) |
19.3
|
||||||||||
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
|
1.3
|
0.4
|
8.9
|
11.8
|
Severance
|
Other
Exit
Costs
|
Asset
Charges
|
Total
|
|||||||||||||
Research
and development consolidation
|
$ |
0.5
|
$ |
0.1
|
$ |
0.3
|
$ |
0.9
|
||||||||
Manufacturing
and Alliance-related rationalization
|
0.4
|
0.2
|
0.2
|
0.8
|
||||||||||||
Business
segment realignment
|
0.4
|
—
|
—
|
0.4
|
||||||||||||
Business
Infrastructure Project
|
9.7
|
3.5
|
6.9
|
20.1
|
||||||||||||
Total
by restructuring program
|
$ |
11.0
|
$ |
3.8
|
$ |
7.4
|
$ |
22.2
|
||||||||
Paper
Technologies and Ventures
|
0.4
|
0.3
|
0.3
|
1.0
|
||||||||||||
Aqualon
Group
|
0.4
|
—
|
—
|
0.4
|
||||||||||||
Corporate
|
10.2
|
3.5
|
7.1
|
20.8
|
||||||||||||
Total
by reporting segment
|
$ |
11.0
|
$ |
3.8
|
$ |
7.4
|
$ |
22.2
|
Six
Months Ended June 30,
|
||||||||
2007
|
2006
|
|||||||
Balance
at beginning of period
|
$ |
10.5
|
$ |
16.6
|
||||
Accrued
charges for severance and related benefits
|
11.0
|
10.9
|
||||||
Accrued
charges for other exit and restructuring costs
|
3.3
|
0.8
|
||||||
Cash
payments
|
(7.6 | ) | (13.4 | ) | ||||
Other,
including foreign currency translation
|
0.3
|
0.4
|
||||||
Balance
at end of period
|
$ |
17.5
|
$ |
15.3
|
11.
|
Other
Operating Expense,
Net
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Severance,
restructuring and other exit costs, net
|
$ |
6.2
|
$ |
5.6
|
$ |
14.8
|
$ |
12.9
|
||||||||
Accelerated
depreciation and amortization
|
3.7
|
0.9
|
7.4
|
3.9
|
||||||||||||
Legal
settlements
|
—
|
1.5
|
(0.2 | ) | (2.1 | ) | ||||||||||
Environmental
charges
|
0.1
|
0.1
|
0.2
|
0.2
|
||||||||||||
(Gains)
losses on asset dispositions, net
|
(4.1 | ) |
—
|
(4.0 | ) | (0.1 | ) | |||||||||
Dismantlement
costs
|
1.0
|
0.4
|
1.7
|
0.6
|
||||||||||||
Other
miscellaneous charges, net
|
0.7
|
0.1
|
0.8
|
0.4
|
||||||||||||
$ |
7.6
|
$ |
8.6
|
$ |
20.7
|
$ |
15.8
|
|
12.
|
Other
Expense,
Net
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Asbestos-related
costs, net
|
$ |
2.2
|
$ |
2.3
|
$ |
4.3
|
$ |
4.5
|
||||||||
Loss
on sale of 51% interest in FiberVisions
|
(0.1 | ) |
5.5
|
(0.3 | ) |
10.6
|
||||||||||
Loss
on repurchase of debt
|
—
|
10.5
|
—
|
11.9
|
||||||||||||
Environmental
charges
|
1.4
|
0.8
|
2.9
|
2.1
|
||||||||||||
Litigation
settlements and accruals
|
13.8
|
1.4
|
14.5
|
2.1
|
||||||||||||
Gains
on asset dispositions, net
|
(0.4 | ) |
—
|
(0.4 | ) |
—
|
||||||||||
Other,
net
|
(1.2 | ) |
0.6
|
(2.0 | ) |
0.5
|
||||||||||
$ |
15.7
|
$ |
21.1
|
$ |
19.0
|
$ |
31.7
|
13.
|
Income
Taxes
|
14.
|
Earnings
(Loss) Per
Share
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Weighted-average
number of common shares outstanding – Basic
|
114.6
|
110.8
|
114.3
|
110.5
|
||||||||||||
Dilutive
effect of:
|
||||||||||||||||
Convertible
debentures
|
0.2
|
0.2
|
0.2
|
0.2
|
||||||||||||
Share-based
compensation
plans
|
0.5
|
0.6
|
0.5
|
0.4
|
||||||||||||
Weighted-average
number of common shares outstanding - Diluted
|
115.3
|
111.6
|
115.0
|
111.1
|
||||||||||||
Items
excluded from computation of diluted earnings per share (exercise
price
exceeds market value):
|
||||||||||||||||
Options
to purchase common stock
|
1.9
|
4.9
|
1.9
|
5.2
|
||||||||||||
Warrants
to purchase common stock
|
6.6
|
6.7
|
6.6
|
6.7
|
||||||||||||
8.5
|
11.6
|
8.5
|
11.9
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Paper
Technology and Ventures
|
$ |
288.3
|
$ |
266.4
|
$ |
571.5
|
$ |
520.6
|
||||||||
Aqualon
Group
|
260.7
|
234.6
|
479.8
|
438.5
|
||||||||||||
FiberVisions
|
—
|
—
|
—
|
69.2
|
||||||||||||
|
$ |
549.0
|
$ |
501.0
|
$ |
1,051.3
|
$ |
1,028.3
|
||||||||
Profit
from operations(1):
|
||||||||||||||||
Paper
Technology and Ventures
|
$ |
26.2
|
$ |
16.6
|
$ |
54.2
|
$ |
31.2
|
||||||||
Aqualon
Group
|
57.7
|
54.7
|
105.3
|
94.2
|
||||||||||||
FiberVisions
|
—
|
—
|
—
|
0.5
|
||||||||||||
Corporate
items (2)
|
(9.4 | ) | (5.7 | ) | (25.1 | ) | (3.4 | ) | ||||||||
|
$ |
74.5
|
$ |
65.6
|
$ |
134.4
|
$ |
122.5
|
||||||||
Depreciation
and amortization:
|
||||||||||||||||
Paper
Technology and Ventures
|
$ |
10.2
|
$ |
10.8
|
$ |
20.3
|
$ |
23.5
|
||||||||
Aqualon
Group
|
12.0
|
11.1
|
23.2
|
21.1
|
||||||||||||
Corporate
items
|
5.2
|
1.8
|
10.5
|
4.0
|
||||||||||||
$ |
27.4
|
$ |
23.7
|
$ |
54.0
|
$ |
48.6
|
|||||||||
Research
and development:
|
||||||||||||||||
Paper
Technology and Ventures
|
$ |
4.3
|
$ |
4.6
|
$ |
8.7
|
$ |
9.0
|
||||||||
Aqualon
Group
|
6.5
|
4.6
|
12.4
|
9.3
|
||||||||||||
FiberVisions
|
—
|
—
|
—
|
0.4
|
||||||||||||
Corporate
items
|
0.2
|
0.2
|
0.3
|
0.3
|
||||||||||||
$ |
11.0
|
$ |
9.4
|
$ |
21.4
|
$ |
19.0
|
|||||||||
Capital
expenditures:
|
||||||||||||||||
Paper
Technology and Ventures
|
$ |
10.0
|
$ |
3.7
|
$ |
15.0
|
$ |
6.5
|
||||||||
Aqualon
Group
|
16.7
|
8.1
|
35.1
|
12.3
|
||||||||||||
Corporate
items
|
2.9
|
3.0
|
3.7
|
4.1
|
||||||||||||
|
$ |
29.6
|
$ |
14.8
|
$ |
53.8
|
$ |
22.9
|
June
30, 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
|
(0.1 | ) | (0.1 | ) | ||||||||||
Current
and long-term debt obligations
|
959.1
|
909.1
|
995.5
|
964.2
|
||||||||||||
Deferred
credits and other liabilities:
|
||||||||||||||||
Cross
currency interest rate swaps
|
64.7
|
64.7
|
53.2
|
53.2
|
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Three
Months Ended June 30, 2007
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
sales
|
$ |
155.4
|
$ |
116.5
|
$ |
326.1
|
$ | (49.0 | ) | $ |
549.0
|
|||||||||
Cost
of sales
|
109.6
|
82.0
|
216.7
|
(49.5 | ) |
358.8
|
||||||||||||||
Selling,
general and administrative expenses
|
25.8
|
31.0
|
38.4
|
—
|
95.2
|
|||||||||||||||
Research
and development
|
4.5
|
5.2
|
1.3
|
—
|
11.0
|
|||||||||||||||
Intangible
asset amortization
|
1.5
|
0.2
|
0.2
|
—
|
1.9
|
|||||||||||||||
Other
operating expense (income), net
|
10.0
|
0.8
|
(3.2 | ) |
—
|
7.6
|
||||||||||||||
Profit
(loss) from operations
|
4.0
|
(2.7 | ) |
72.7
|
0.5
|
74.5
|
||||||||||||||
Interest
and debt expense (income), net
|
46.7
|
(30.3 | ) |
1.4
|
—
|
17.8
|
||||||||||||||
Vertac
response costs and litigation charges
|
17.5
|
—
|
—
|
—
|
17.5
|
|||||||||||||||
Other
expense (income), net
|
15.2
|
0.8
|
(0.5 | ) |
0.2
|
15.7
|
||||||||||||||
Income
(loss) before income taxes, minority interests and equity (loss)
income
|
(75.4 | ) |
26.8
|
71.8
|
0.3
|
23.5
|
||||||||||||||
(Benefit)
provision for income taxes
|
(33.8 | ) |
9.1
|
13.1
|
0.1
|
(11.5 | ) | |||||||||||||
Income
(loss) before minority interests and equity (loss) income
|
(41.6 | ) |
17.7
|
58.7
|
0.2
|
35.0
|
||||||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(0.5 | ) |
—
|
(0.5 | ) | |||||||||||||
Equity
(loss) income of affiliated companies
|
—
|
(0.2 | ) |
0.8
|
(0.6 | ) |
—
|
|||||||||||||
Equity
income (loss) from consolidated subsidiaries
|
76.1
|
—
|
—
|
(76.1 | ) |
—
|
||||||||||||||
Net
income
|
$ |
34.5
|
$ |
17.5
|
$ |
59.0
|
$ | (76.5 | ) | $ |
34.5
|
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Six
Months Ended June 30, 2007
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
sales
|
$ |
310.0
|
$ |
225.4
|
$ |
611.3
|
$ | (95.4 | ) | $ |
1,051.3
|
|||||||||
Cost
of sales
|
217.8
|
157.8
|
402.4
|
(95.8 | ) |
682.2
|
||||||||||||||
Selling,
general and administrative expenses
|
52.1
|
63.2
|
73.6
|
—
|
188.9
|
|||||||||||||||
Research
and development
|
9.1
|
9.7
|
2.6
|
—
|
21.4
|
|||||||||||||||
Intangible
asset amortization
|
3.0
|
0.4
|
0.3
|
—
|
3.7
|
|||||||||||||||
Other
operating expense (income), net
|
21.9
|
0.9
|
(2.1 | ) |
—
|
20.7
|
||||||||||||||
Profit
(loss) from operations
|
6.1
|
(6.6 | ) |
134.5
|
0.4
|
134.4
|
||||||||||||||
Interest
and debt expense (income), net
|
91.9
|
(59.3 | ) |
2.4
|
—
|
35.0
|
||||||||||||||
Vertac
response costs and litigation charges
|
19.0
|
—
|
—
|
—
|
19.0
|
|||||||||||||||
Other
expense, net
|
17.2
|
1.8
|
—
|
—
|
19.0
|
|||||||||||||||
Income
(loss) before income taxes, minority interests and equity (loss)
income
|
(122.0 | ) |
50.9
|
132.1
|
0.4
|
61.4
|
||||||||||||||
(Benefit)
provision for income taxes
|
(92.7 | ) |
17.9
|
26.5
|
0.2
|
(48.1 | ) | |||||||||||||
Income
(loss) before minority interests and equity (loss) income
|
(29.3 | ) |
33.0
|
105.6
|
0.2
|
109.5
|
||||||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(1.0 | ) |
—
|
(1.0 | ) | |||||||||||||
Equity
(loss) income of affiliated companies
|
—
|
(0.5 | ) |
1.0
|
(1.0 | ) | (0.5 | ) | ||||||||||||
Equity
income (loss) from consolidated subsidiaries
|
137.3
|
—
|
—
|
(137.3 | ) |
—
|
||||||||||||||
Net
income
|
$ |
108.0
|
$ |
32.5
|
$ |
105.6
|
$ | (138.1 | ) | $ |
108.0
|
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Three
Months Ended June 30, 2006
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
sales
|
$ |
148.1
|
$ |
114.3
|
$ |
281.5
|
$ | (42.9 | ) | $ |
501.0
|
|||||||||
Cost
of sales
|
104.0
|
80.4
|
183.7
|
(43.4 | ) |
324.7
|
||||||||||||||
Selling,
general and administrative expenses
|
27.2
|
26.0
|
37.5
|
—
|
90.7
|
|||||||||||||||
Research
and development
|
4.7
|
4.1
|
0.6
|
—
|
9.4
|
|||||||||||||||
Intangible
asset amortization
|
1.5
|
0.4
|
0.1
|
—
|
2.0
|
|||||||||||||||
Other
operating expense (income), net
|
5.9
|
(1.0 | ) |
3.7
|
—
|
8.6
|
||||||||||||||
Profit
from operations
|
4.8
|
4.4
|
55.9
|
0.5
|
65.6
|
|||||||||||||||
Interest
and debt expense (income), net
|
41.3
|
(24.8 | ) |
0.2
|
—
|
16.7
|
||||||||||||||
Vertac
response costs and litigation charges
|
106.0
|
—
|
—
|
—
|
106.0
|
|||||||||||||||
Other
expense, net
|
18.8
|
2.1
|
0.2
|
—
|
21.1
|
|||||||||||||||
(Loss)
income before income taxes, minority interests and equity (loss)
income
|
(161.3 | ) |
27.1
|
55.5
|
0.5
|
(78.2 | ) | |||||||||||||
(Benefit) provision
for income taxes
|
(52.1 | ) |
9.6
|
14.7
|
0.3
|
(27.5 | ) | |||||||||||||
(Loss)
income before minority interests and equity (loss) income
|
(109.2 | ) |
17.5
|
40.8
|
0.2
|
(50.7 | ) | |||||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(0.3 | ) |
—
|
(0.3 | ) | |||||||||||||
Equity
(loss) income of affiliated companies
|
—
|
(1.0 | ) |
0.7
|
(0.3 | ) | (0.6 | ) | ||||||||||||
Equity
income (loss) from consolidated subsidiaries
|
57.6
|
(2.5 | ) |
2.5
|
(57.6 | ) |
—
|
|||||||||||||
Net
(loss) income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle
|
(51.6 | ) |
14.0
|
43.7
|
(57.7 | ) | (51.6 | ) | ||||||||||||
Net
loss from discontinued operations, net of tax
|
(0.7 | ) |
—
|
—
|
—
|
(0.7 | ) | |||||||||||||
Net
(loss) income before cumulative effect of change in accounting
principle
|
(52.3 | ) |
14.0
|
43.7
|
(57.7 | ) | (52.3 | ) | ||||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Net
(loss) income
|
$ | (52.3 | ) | $ |
14.0
|
$ |
43.7
|
$ | (57.7 | ) | $ | (52.3 | ) |
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Six
Months Ended June 30, 2006
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
sales
|
$ |
288.5
|
$ |
254.1
|
$ |
567.6
|
$ | (81.9 | ) | $ |
1,028.3
|
|||||||||
Cost
of sales
|
201.6
|
185.7
|
380.6
|
(82.5 | ) |
685.4
|
||||||||||||||
Selling,
general and administrative expenses
|
50.6
|
58.3
|
73.1
|
—
|
182.0
|
|||||||||||||||
Research
and development
|
9.3
|
8.6
|
1.1
|
—
|
19.0
|
|||||||||||||||
Intangible
asset amortization
|
3.0
|
0.4
|
0.2
|
—
|
3.6
|
|||||||||||||||
Other
operating expense, net
|
4.6
|
1.7
|
9.5
|
—
|
15.8
|
|||||||||||||||
Profit
(loss) from operations
|
19.4
|
(0.6 | ) |
103.1
|
0.6
|
122.5
|
||||||||||||||
Interest
and debt expense (income), net
|
84.7
|
(47.8 | ) |
0.5
|
—
|
37.4
|
||||||||||||||
Vertac
response costs and litigation charges
|
106.0
|
—
|
—
|
—
|
106.0
|
|||||||||||||||
Other
expense, net
|
27.7
|
3.6
|
0.4
|
—
|
31.7
|
|||||||||||||||
(Loss)
income before income taxes, minority interests and equity (loss)
income
|
(199.0 | ) |
43.6
|
102.2
|
0.6
|
(52.6 | ) | |||||||||||||
(Benefit)
provision for income taxes
|
(53.8 | ) |
15.6
|
21.1
|
0.3
|
(16.8 | ) | |||||||||||||
(Loss)
income before minority interests and equity (loss) income
|
(145.2 | ) |
28.0
|
81.1
|
0.3
|
(35.8 | ) | |||||||||||||
Minority
interests in earnings of consolidated subsidiaries
|
—
|
—
|
(0.4 | ) |
—
|
(0.4 | ) | |||||||||||||
Equity
(loss) income of affiliated companies
|
—
|
(1.1 | ) |
0.4
|
(0.3 | ) | (1.0 | ) | ||||||||||||
Equity
income (loss) from consolidated subsidiaries
|
108.0
|
0.5
|
(0.8 | ) | (107.7 | ) |
—
|
|||||||||||||
Net
(loss) income from continuing operations before discontinued operations
and cumulative effect of change in accounting principle
|
(37.2 | ) |
27.4
|
80.3
|
(107.7 | ) | (37.2 | ) | ||||||||||||
Net
loss from discontinued operations, net of tax
|
(1.3 | ) |
—
|
—
|
—
|
(1.3 | ) | |||||||||||||
Net
(loss) income before cumulative effect of change in accounting
principle
|
(38.5 | ) |
27.4
|
80.3
|
(107.7 | ) | (38.5 | ) | ||||||||||||
Cumulative
effect of change in accounting principle, net of tax
|
0.9
|
—
|
—
|
—
|
0.9
|
|||||||||||||||
Net
(loss) income
|
$ | (37.6 | ) | $ |
27.4
|
$ |
80.3
|
$ | (107.7 | ) | $ | (37.6 | ) |
Condensed
Consolidating Balance Sheet
|
||||||||||||||||||||
As
of June 30, 2007
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Eliminations
and
|
||||||||||||||||||
Assets
|
Parent
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Consolidated
|
|||||||||||||||
Current
assets
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ |
124.3
|
$ |
1.2
|
$ |
112.4
|
$ |
—
|
$ |
237.9
|
||||||||||
Accounts
receivable, net
|
66.9
|
47.0
|
260.5
|
2.3
|
376.7
|
|||||||||||||||
Intercompany
receivables (payables)
|
66.1
|
12.7
|
(3.0 | ) | (75.8 | ) |
—
|
|||||||||||||
Inventories
|
57.9
|
71.8
|
94.5
|
(1.0 | ) |
223.2
|
||||||||||||||
Deferred
income taxes
|
26.4
|
2.9
|
8.2
|
—
|
37.5
|
|||||||||||||||
Income
taxes receivable
|
49.2
|
—
|
—
|
—
|
49.2
|
|||||||||||||||
Other
current assets
|
21.0
|
2.8
|
20.9
|
—
|
44.7
|
|||||||||||||||
Total
current assets
|
411.8
|
138.4
|
493.5
|
(74.5 | ) |
969.2
|
||||||||||||||
Property,
plant and equipment, net
|
130.4
|
144.6
|
338.0
|
—
|
613.0
|
|||||||||||||||
Investments
in subsidiaries and advances, net
|
2,678.2
|
84.8
|
—
|
(2,763.0 | ) |
—
|
||||||||||||||
Intangible
assets, net
|
129.3
|
2.6
|
11.0
|
—
|
142.9
|
|||||||||||||||
Goodwill
|
58.8
|
37.6
|
399.7
|
—
|
496.1
|
|||||||||||||||
Deferred
income taxes
|
373.9
|
—
|
18.5
|
(2.8 | ) |
389.6
|
||||||||||||||
Asbestos-related
assets
|
37.6
|
—
|
—
|
—
|
37.6
|
|||||||||||||||
Deferred
charges and other assets
|
75.1
|
29.1
|
21.1
|
0.2
|
125.5
|
|||||||||||||||
Total
assets
|
$ |
3,895.1
|
$ |
437.1
|
$ |
1,281.8
|
$ | (2,840.1 | ) | $ |
2,773.9
|
|||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||
Current
liabilities
|
||||||||||||||||||||
Accounts
payable
|
$ |
54.9
|
$ |
35.5
|
$ |
113.8
|
$ |
—
|
$ |
204.2
|
||||||||||
Intercompany
payables
|
2.1
|
46.9
|
24.6
|
(73.6 | ) |
—
|
||||||||||||||
Asbestos-related
liabilities
|
30.0
|
—
|
—
|
—
|
30.0
|
|||||||||||||||
Current
debt obligations
|
104.2
|
—
|
21.9
|
—
|
126.1
|
|||||||||||||||
Vertac
litigation liability
|
18.7
|
—
|
—
|
—
|
18.7
|
|||||||||||||||
Accrued
expenses
|
50.8
|
98.0
|
58.5
|
—
|
207.3
|
|||||||||||||||
Deferred
income taxes
|
—
|
—
|
11.6
|
—
|
11.6
|
|||||||||||||||
Total
current liabilities
|
260.7
|
180.4
|
230.4
|
(73.6 | ) |
597.9
|
||||||||||||||
Long-term
debt
|
806.7
|
—
|
26.3
|
—
|
833.0
|
|||||||||||||||
Deferred
income taxes
|
—
|
3.1
|
73.1
|
(2.8 | ) |
73.4
|
||||||||||||||
Pension
obligations
|
172.5
|
—
|
55.9
|
—
|
228.4
|
|||||||||||||||
Other
postretirement benefit obligations
|
135.6
|
—
|
3.2
|
—
|
138.8
|
|||||||||||||||
Deferred
credits and other liabilities
|
220.1
|
15.2
|
17.4
|
—
|
252.7
|
|||||||||||||||
Asbestos-related
liabilities
|
232.5
|
—
|
—
|
—
|
232.5
|
|||||||||||||||
Intercompany
notes payable (receivable)
|
1,663.5
|
(1,484.9 | ) | (178.8 | ) |
0.2
|
—
|
|||||||||||||
Minority
interests
|
—
|
—
|
13.7
|
—
|
13.7
|
|||||||||||||||
Total
stockholders' equity
|
403.5
|
1,723.3
|
1,040.6
|
(2,763.9 | ) |
403.5
|
||||||||||||||
Total
liabilities and stockholders' equity
|
$ |
3,895.1
|
$ |
437.1
|
$ |
1,281.8
|
$ | (2,840.1 | ) | $ |
2,773.9
|
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
Six
Months Ended June 30, 2007
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
Cash Provided By Operating Activities
|
$ |
164.0
|
$ |
74.6
|
$ |
65.9
|
$ | (164.0 | ) | $ |
140.5
|
|||||||||
Cash
Flow From Investing Activities:
|
||||||||||||||||||||
Capital
expenditures
|
(9.1 | ) | (18.8 | ) | (25.9 | ) |
—
|
(53.8 | ) | |||||||||||
Acquisitions
and investments, net
|
—
|
(0.9 | ) |
—
|
—
|
(0.9 | ) | |||||||||||||
Proceeds
from sale of 51% interest in FiberVisions, net of
transaction costs
|
(1.2 | ) |
—
|
—
|
—
|
(1.2 | ) | |||||||||||||
Proceeds
of asset disposals, net of transaction costs
|
—
|
—
|
11.4
|
—
|
11.4
|
|||||||||||||||
Other,
net
|
(0.1 | ) |
—
|
—
|
—
|
(0.1 | ) | |||||||||||||
Net
cash used in investing activities
|
(10.4 | ) | (19.7 | ) | (14.5 | ) |
—
|
(44.6 | ) | |||||||||||
Cash
Flow From Financing Activities:
|
||||||||||||||||||||
Long-term
debt proceeds
|
—
|
—
|
3.3
|
—
|
3.3
|
|||||||||||||||
Long-term
debt payments
|
(47.0 | ) |
—
|
—
|
—
|
(47.0 | ) | |||||||||||||
Change
in short-term debt
|
—
|
—
|
5.8
|
—
|
5.8
|
|||||||||||||||
Change
in intercompany advances
|
(79.0 | ) | (54.2 | ) | (26.4 | ) |
159.6
|
—
|
||||||||||||
Proceeds
from the exercise of stock options
|
4.9
|
—
|
—
|
—
|
4.9
|
|||||||||||||||
Dividends
paid
|
—
|
—
|
(4.4 | ) |
4.4
|
—
|
||||||||||||||
Other,
net
|
2.1
|
—
|
—
|
—
|
2.1
|
|||||||||||||||
Net
cash used in financing activities
|
(119.0 | ) | (54.2 | ) | (21.7 | ) |
164.0
|
(30.9 | ) | |||||||||||
Effect
of exchange rate changes on cash
|
—
|
—
|
1.1
|
—
|
1.1
|
|||||||||||||||
Net
increase in cash and cash equivalents
|
34.6
|
0.7
|
30.8
|
—
|
66.1
|
|||||||||||||||
Cash
and cash equivalents - beginning of period
|
89.7
|
0.5
|
81.6
|
—
|
171.8
|
|||||||||||||||
Cash
and cash equivalents - end of period
|
$ |
124.3
|
$ |
1.2
|
$ |
112.4
|
$ |
—
|
$ |
237.9
|
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
Six
Months Ended June 30, 2006
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
Cash Provided By (Used In) Operating
Activities
|
$ | (64.4 | ) | $ |
71.7
|
$ |
365.8
|
$ | (309.1 | ) | $ |
64.0
|
||||||||
Cash
Flow From Investing Activities:
|
||||||||||||||||||||
Capital
expenditures
|
(5.9 | ) | (8.6 | ) | (8.4 | ) |
—
|
(22.9 | ) | |||||||||||
Acquisitions
and investments, net
|
—
|
(22.7 | ) | (3.4 | ) |
—
|
(26.1 | ) | ||||||||||||
Proceeds
from sale of 51%
interest
in FiberVisions, net
|
25.1
|
—
|
—
|
—
|
25.1
|
|||||||||||||||
Proceeds
of asset disposals, net of transaction costs
|
—
|
0.1
|
0.2
|
—
|
0.3
|
|||||||||||||||
Other,
net
|
(0.2 | ) |
—
|
(0.8 | ) |
—
|
(1.0 | ) | ||||||||||||
Net
cash (used in) provided by investing activities
|
19.0
|
(31.2 | ) | (12.4 | ) |
—
|
(24.6 | ) | ||||||||||||
Cash
Flow From Financing Activities:
|
||||||||||||||||||||
Long-term
debt issued by FiberVisions, net
of issuance costs
|
83.7
|
—
|
—
|
—
|
83.7
|
|||||||||||||||
Long-term
debt payments
|
(115.9 | ) |
—
|
(6.8 | ) |
—
|
(122.7 | ) | ||||||||||||
Change
in short-term debt
|
—
|
—
|
(0.8 | ) |
—
|
(0.8 | ) | |||||||||||||
Change
in intercompany advances
|
77.8
|
(41.0 | ). | (246.6 | ) |
209.8
|
—
|
|||||||||||||
Proceeds
from the exercise of stock options
|
3.5
|
—
|
—
|
—
|
3.5
|
|||||||||||||||
Dividends
paid
|
—
|
—
|
(99.3 | ) |
99.3
|
—
|
||||||||||||||
Other,
net
|
0.4
|
—
|
—
|
—
|
0.4
|
|||||||||||||||
Net
cash (used in) provided by financing activities
|
49.5
|
(41.0 | ) | (353.5 | ) |
309.1
|
(35.9 | ) | ||||||||||||
Effect
of exchange rate changes on cash
|
—
|
—
|
1.1
|
—
|
1.1
|
|||||||||||||||
Net
increase (decrease) in cash and cash equivalents
|
4.1
|
(0.5 | ) |
1.0
|
—
|
4.6
|
||||||||||||||
Cash
and cash equivalents - beginning of period
|
6.5
|
1.0
|
69.8
|
—
|
77.3
|
|||||||||||||||
Cash
and cash equivalents - end of period
|
$ |
10.6
|
$ |
0.5
|
$ |
70.8
|
$ |
—
|
$ |
81.9
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
North
America
|
46 | % | 48 | % | 48 | % | 49 | % | ||||||||
Europe
|
37 | % | 35 | % | 36 | % | 34 | % | ||||||||
Asia
Pacific
|
12 | % | 12 | % | 11 | % | 11 | % | ||||||||
Latin
America
|
5 | % | 5 | % | 5 | % | 6 | % | ||||||||
Consolidated
|
100 | % | 100 | % | 100 | % | 100 | % |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Paper
Technologies and Ventures
|
53 | % | 53 | % | 54 | % | 51 | % | ||||||||
Aqualon
Group
|
47 | % | 47 | % | 46 | % | 43 | % | ||||||||
FiberVisions
|
—
|
—
|
—
|
6 | % | |||||||||||
Consolidated
|
100 | % | 100 | % | 100 | % | 100 | % |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Net
sales
|
$ |
549.0
|
$ |
501.0
|
$ |
48.0
|
$ |
1,051.3
|
$ |
1,028.3
|
$ |
23.0
|
Three
Months Ended June 30,
|
%
Change
Excluding
|
|||||||||||||||
Regions
|
2007
|
2006
|
%Change
|
ROE
|
||||||||||||
North
America
|
$ |
252.3
|
$ |
242.6
|
4 | % | 4 | % | ||||||||
Europe
|
203.3
|
176.0
|
16 | % | 8 | % | ||||||||||
Asia
Pacific
|
63.8
|
57.3
|
11 | % | 10 | % | ||||||||||
Latin
America
|
29.6
|
25.1
|
18 | % | 14 | % | ||||||||||
All
regions
|
$ |
549.0
|
$ |
501.0
|
10 | % | 7 | % |
Six
Months Ended June 30,
|
%
Change
Excluding
|
|||||||||||||||
Regions
|
2007
|
2006
|
%Change
|
ROE
|
||||||||||||
North
America
|
$ |
500.0
|
$ |
505.4
|
(1 | )% | (1 | )% | ||||||||
Europe
|
378.2
|
353.1
|
7 | % | (1 | )% | ||||||||||
Asia
Pacific
|
116.7
|
114.7
|
2 | % | 1 | % | ||||||||||
Latin
America
|
56.4
|
55.1
|
2 | % |
—
|
|||||||||||
All
regions
|
$ |
1,051.3
|
$ |
1,028.3
|
2 | % | (1 | )% |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Cost
of sales
|
$ |
358.8
|
$ |
324.7
|
$ |
34.1
|
$ |
682.2
|
$ |
685.4
|
$ | (3.2 | ) | |||||||||||
As
a % of sales
|
65 | % | 65 | % | 65 | % | 67 | % |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Selling,
general and administrative
expenses
|
$ |
95.2
|
$ |
90.7
|
$ |
4.5
|
$ |
188.9
|
$ |
182.0
|
$ |
6.9
|
||||||||||||
As
a % of sales
|
17 | % | 18 | % | 18 | % | 18 | % |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Research
and development
|
$ |
11.0
|
$ |
9.4
|
$ |
1.6
|
$ |
21.4
|
$ |
19.0
|
$ |
2.4
|
||||||||||||
As
a % of sales
|
2 | % | 2 | % | 2 | % | 2 | % |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Intangible
asset amortization
|
$ |
1.9
|
$ |
2.0
|
$ | (0.1 | ) | $ |
3.7
|
$ |
3.6
|
$ |
0.1
|
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Other
operating expense, net
|
$ |
7.6
|
$ |
8.6
|
$ | (1.0 | ) | $ |
20.7
|
$ |
15.8
|
$ |
4.9
|
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Interest
and debt expense
|
$ |
17.8
|
$ |
16.7
|
$ |
1.1
|
$ |
35.0
|
$ |
37.4
|
$ | (2.4 | ) |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Vertac
response costs and litigation charges
|
$ |
17.5
|
$ |
106.0
|
$ | (88.5 | ) | $ |
19.0
|
$ |
106.0
|
$ | (87.0 | ) |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Other
expense, net
|
$ |
15.7
|
$ |
21.1
|
$ | (5.4 | ) | $ |
19.0
|
$ |
31.7
|
$ | (12.7 | ) |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
(Benefit)
provision for income taxes
|
$ | (11.5 | ) | $ | (27.5 | ) | $ |
16.0
|
$ | (48.1 | ) | $ | (16.8 | ) | $ | (31.3 | ) | |||||||
Effective
tax rate
|
(49 | %) | (35 | %) | (78 | %) | 32 | % |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Minority
interests in earnings of consolidated
subsidiaries
|
$ | (0.5 | ) | $ | (0.3 | ) | $ | (0.2 | ) | $ | (1.0 | ) | $ | (0.4 | ) | $ | (0.6 | ) |
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Equity
loss of affiliated companies, net of tax
|
$ |
—
|
$ | (0.6 | ) | $ |
0.6
|
$ | (0.5 | ) | $ | (1.0 | ) | $ |
0.5
|
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Net
loss from discontinued operations, net of tax
|
$ |
—
|
$ | (0.7 | ) | $ |
0.7
|
$ |
—
|
$ | (1.3 | ) | $ |
1.3
|
Three
Months
|
Six
Months
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Cumulative
effect of change in accounting principle, net of
tax
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
0.9
|
$ | (0.9 | ) |
Three
Months Ended June 30,
|
||||||||||||||||
2007
|
2006
|
Change
|
%
Change
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Paper
Technologies and Ventures
|
$ |
288.3
|
$ |
266.4
|
$ |
21.9
|
8 | % | ||||||||
Aqualon
Group
|
260.7
|
234.6
|
26.1
|
11 | % | |||||||||||
Consolidated
|
$ |
549.0
|
$ |
501.0
|
$ |
48.0
|
10 | % | ||||||||
Profit
from operations:
|
||||||||||||||||
Paper
Technologies and Ventures
|
$ |
26.2
|
$ |
16.6
|
$ |
9.6
|
57 | % | ||||||||
Aqualon
Group
|
57.7
|
54.7
|
3.0
|
5 | % | |||||||||||
Corporate
Items
|
(9.4 | ) | (5.7 | ) | (3.7 | ) | (65 | )% | ||||||||
Consolidated
|
$ |
74.5
|
$ |
65.6
|
$ |
8.9
|
14 | % |
Six
Months Ended June 30,
|
||||||||||||||||
2007
|
2006
|
Change
|
%
Change
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Paper
Technologies and Ventures
|
$ |
571.5
|
$ |
520.6
|
$ |
50.9
|
10 | % | ||||||||
Aqualon
Group
|
479.8
|
438.5
|
41.3
|
9 | % | |||||||||||
FiberVisions
|
—
|
69.2
|
(69.2 | ) | (100 | )% | ||||||||||
Consolidated
|
$ |
1,051.3
|
$ |
1,028.3
|
$ |
23.0
|
2 | % | ||||||||
Profit
from operations:
|
||||||||||||||||
Paper
Technologies and Ventures
|
$ |
54.2
|
$ |
31.2
|
$ |
23.0
|
74 | % | ||||||||
Aqualon
Group
|
105.3
|
94.2
|
11.1
|
12 | % | |||||||||||
FiberVisions
|
—
|
0.5
|
(0.5 | ) | (100 | )% | ||||||||||
Corporate
Items
|
(25.1 | ) | (3.4 | ) | (21.7 | ) |
NM
|
|||||||||
Consolidated
|
$ |
134.4
|
$ |
122.5
|
$ |
11.9
|
10 | % |
Three
Months Ended June 30, 2007
|
Net
Sales Percentage Increase (Decrease) from Prior Year Due
To:
|
|||||||||||||||||||
Volume
|
Product
Mix
|
Price
|
Rates
of
Exchange
|
Total
|
||||||||||||||||
Paper
Technologies and Ventures
|
8 | % | (5 | )% | 2 | % | 3 | % | 8 | % | ||||||||||
Aqualon
Group
|
7 | % |
—
|
1 | % | 3 | % | 11 | % | |||||||||||
Consolidated
|
7 | % | (1 | )% | 1 | % | 3 | % | 10 | % |
Six
Months Ended June 30, 2007
|
Net
Sales Percentage Increase (Decrease) from Prior Year Due
To:
|
|||||||||||||||||||
Volume
|
Product
Mix
|
Price
|
Rates
of
Exchange
|
Total
|
||||||||||||||||
Paper
Technologies and Ventures
|
7 | % | (2 | )% | 2 | % | 3 | % | 10 | % | ||||||||||
Aqualon
Group
|
5 | % | (1 | )% | 2 | % | 3 | % | 9 | % | ||||||||||
FiberVisions
|
(100 | )% |
—
|
—
|
—
|
(100 | )% | |||||||||||||
Consolidated
|
—
|
(3 | )% | 2 | % | 3 | % | 2 | % |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Paper
Technologies
|
$ |
227.6
|
$ |
208.6
|
$ |
448.9
|
$ |
406.7
|
||||||||
Ventures
|
60.7
|
57.8
|
122.6
|
113.9
|
||||||||||||
$ |
288.3
|
$ |
266.4
|
$ |
571.5
|
$ |
520.6
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Coatings
and Construction
|
$ |
129.5
|
$ |
118.9
|
$ |
230.2
|
$ |
211.2
|
||||||||
Regulated
Industries
|
63.3
|
56.3
|
123.4
|
112.6
|
||||||||||||
Energy
and Specialties
|
67.9
|
59.4
|
126.2
|
114.7
|
||||||||||||
$ |
260.7
|
$ |
234.6
|
$ |
479.8
|
$ |
438.5
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Severance,
restructuring and other exit costs
|
$ |
6.0
|
$ |
1.7
|
$ |
13.7
|
$ |
2.6
|
||||||||
Accelerated
depreciation and amortization
|
3.5
|
0.3
|
7.1
|
0.6
|
||||||||||||
Gains
on asset dispositions, net
|
(4.1 | ) |
—
|
(4.1 | ) |
—
|
||||||||||
Legal
settlements, net
|
—
|
0.3
|
—
|
(3.3 | ) | |||||||||||
Dismantlement
costs
|
0.9
|
0.3
|
1.5
|
0.5
|
||||||||||||
Unallocated
corporate costs
|
3.2
|
2.2
|
6.7
|
2.2
|
||||||||||||
Other
miscellaneous expense (income), net
|
(0.1 | ) |
0.9
|
0.2
|
0.8
|
|||||||||||
Total
Corporate items – expense (income)
|
$ |
9.4
|
$ |
5.7
|
$ |
25.1
|
$ |
3.4
|
Six
Months Ended June 30,
|
||||||||
Operating
Activities
|
2007
|
2006
|
||||||
Net
income (loss), depreciation, amortization and all other non-cash
items
|
$ |
179.3
|
$ | (6.2 | ) | |||
Changes
in working capital, net
|
(57.9 | ) | (29.1 | ) | ||||
All
other sources and (uses) of cash
|
19.1
|
99.3
|
||||||
Net
cash provided by operating activities
|
$ |
140.5
|
$ |
64.0
|
Six
Months Ended June 30,
|
||||||||
Investing
Activities
|
2007
|
2006
|
||||||
Capital
expenditures
|
$ |
53.8
|
$ |
22.9
|
||||
Acquisitions
and investments, net
|
0.9
|
26.1
|
||||||
Proceeds
from asset and investment dispositions and all other sources,
net
|
(10.1 | ) | (24.4 | ) | ||||
Net
cash used in investing activities
|
$ |
44.6
|
$ |
24.6
|
Six
Months Ended June 30,
|
||||||||
Financing
Activities
|
2007
|
2006
|
||||||
Long-term
debt payments
|
$ |
47.0
|
$ |
122.7
|
||||
Long-term
debt proceeds and changes in short-term debt, net
|
(9.1 | ) |
0.8
|
|||||
Long-term
debt issued by FiberVisions, net of issuance costs
|
—
|
(83.7 | ) | |||||
Proceeds
from the exercise of stock options and all other sources,
net
|
(7.0 | ) | (3.9 | ) | ||||
Net
cash used by financing activities
|
$ |
30.9
|
$ |
35.9
|
1.
|
Election
of Directors
|
Director
Name
|
For
|
Withheld
Authority
|
Broker
Non-Votes
|
|||||||||
John
C. Hunter, III
|
101,460,053
|
2,923,891
|
—
|
|||||||||
Robert
D. Kennedy
|
101,804,933
|
2,579,011
|
—
|
|||||||||
Craig
A. Rogerson
|
101,887,915
|
2,496,029
|
—
|
2.
|
Ratification
of BDO Seidman, LLP as Hercules’ Independent Registered Public Accountants
for 2007, which received more than a majority of the votes necessary
for
ratification.
|
For
|
Against
|
Abstain
|
Broker Non-Votes
|
|||||||||||
103,369,049
|
185,024
|
829,871
|
—
|
3.
|
Amendments
to Hercules’ Amended and Restated Certificate of Incorporation and
Hercules’ Revised and Amended By-Laws, which received more than a majority
of the votes necessary for
approval.
|
For
|
Against
|
Abstain
|
Broker Non-Votes
|
|||||||||||
102,005,834
|
1,454,483
|
923,627
|
—
|
|
(a)
|
Exhibits
|
HERCULES
INCORPORATED
|
|||
By:
|
/s/
Allen A. Spizzo
|
||
Allen
A. Spizzo
|
|||
Vice
President and Chief Financial Officer
|
|||
(Principal
Financial Officer and Duly
|
|||
Authorized
Signatory)
|
|||
August
1, 2007
|
Number
|
Description
|
|
10.1*
|
Second
Amendment to Amended and Restated Credit Agreement dated as of June
29,
2005, among Hercules Incorporated and the Guarantors listed on Schedule
A
thereto and Credit Suisse First Boston LLC and Wachovia Bank National
Association
|
|
10.2*
|
Fourth
Amendment to Amended and Restated Credit Agreement dated as of July
11,
2007, among Hercules Incorporated and the Guarantors listed on Schedule
A
thereto and Credit Suisse First Boston LLC and Wachovia Bank National
Association
|
|
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
|