Mark
One
|
ý QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For
the quarterly period ended March 31, 2008
OR
|
oTRANSITION 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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6
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38
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39
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(Unaudited)
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||||||||
Three
Months Ended
March
31,
|
||||||||
As
Adjusted
|
||||||||
(Note 5)
|
||||||||
2008
|
2007
|
|||||||
Net
sales
|
$ | 558.3 | $ | 502.3 | ||||
Cost
of sales
|
374.4 | 323.4 | ||||||
Selling,
general and administrative expenses
|
94.6 | 83.4 | ||||||
Research
and development
|
11.1 | 10.4 | ||||||
Intangible
asset amortization (Note 3)
|
2.6 | 1.8 | ||||||
Other
operating expense, net (Note 11)
|
8.2 | 13.1 | ||||||
Profit
from operations
|
67.4 | 70.2 | ||||||
Interest
and debt expense
|
16.7 | 17.2 | ||||||
Vertac
response costs and litigation charges (Note
7)
|
0.2 | 1.5 | ||||||
Other
expense, net (Note 12)
|
6.9 | 3.3 | ||||||
Income
before income taxes, minority interests and equity loss
|
43.6 | 48.2 | ||||||
Provision
(benefit) for income taxes (Note 13)
|
11.5 | (33.1 | ) | |||||
Income
before minority interests and equity loss
|
32.1 | 81.3 | ||||||
Minority
interests in losses (earnings) of consolidated
subsidiaries
|
1.2 | (0.5 | ) | |||||
Equity
loss of affiliated companies, net of tax
|
(0.9 | ) | (0.5 | ) | ||||
Net
income
|
$ | 32.4 | $ | 80.3 | ||||
Earnings
per share (Note 14):
|
||||||||
Basic
earnings per share
|
$ | 0.29 | $ | 0.70 | ||||
Weighted
average number of shares (millions)
|
111.8 | 114.1 | ||||||
Diluted
earnings per share
|
$ | 0.29 | $ | 0.70 | ||||
Weighted
average number of shares (millions)
|
112.4 | 114.9 | ||||||
Dividends
declared per share
|
$ | 0.05 | — | |||||
Net
income
|
$ | 32.4 | $ | 80.3 | ||||
Other
comprehensive income:
|
||||||||
Foreign
currency translation
|
44.6 | 5.6 | ||||||
Pension
and postretirement benefit adjustments, net of tax
|
0.4 | 0.1 | ||||||
Revaluation
of net investment hedges, net of tax
|
(33.3 | ) | (4.6 | ) | ||||
11.7 | 1.1 | |||||||
Comprehensive
income
|
$ | 44.1 | $ | 81.4 |
(Dollars
in millions)
|
As
Adjusted
|
|||||||
(Unaudited)
|
(Note 5)
|
|||||||
March
31,
2008
|
December 31,
2007
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 99.1 | $ | 116.5 | ||||
Accounts
receivable, net of allowance (2008 – $5.2; 2007 – $4.5)
|
390.2 | 366.8 | ||||||
Inventories
(Note 9)
|
249.2 | 224.0 | ||||||
Deferred
income taxes
|
43.0 | 41.0 | ||||||
Income
taxes receivable
|
23.0 | 20.2 | ||||||
Asbestos-related
assets (Note 7)
|
— | 4.0 | ||||||
Other
current assets
|
41.6 | 41.8 | ||||||
Total
current assets
|
846.1 | 814.3 | ||||||
Property,
plant, and equipment, net (Note 9)
|
687.3 | 660.0 | ||||||
Intangible
assets, net (Note 3)
|
159.1 | 161.2 | ||||||
Goodwill
(Note 3)
|
542.6 | 527.9 | ||||||
Deferred
income taxes
|
382.8 | 370.8 | ||||||
Asbestos-related
assets (Note 7)
|
17.4 | 24.1 | ||||||
Deferred
charges and other assets
|
116.8 | 120.1 | ||||||
Total
assets
|
$ | 2,752.1 | $ | 2,678.4 | ||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ | 229.0 | $ | 222.0 | ||||
Asbestos-related
liabilities (Note 7)
|
28.0 | 28.0 | ||||||
Current
debt obligations (Note 4)
|
45.1 | 33.7 | ||||||
Vertac
obligations (Note 7)
|
20.2 | 20.0 | ||||||
Accrued
expenses
|
183.2 | 207.7 | ||||||
Income
taxes payable
|
14.2 | 13.3 | ||||||
Deferred
income taxes
|
9.8 | 9.5 | ||||||
Total
current liabilities
|
529.5 | 534.2 | ||||||
Long-term
debt (Note 4)
|
762.5 | 762.3 | ||||||
Deferred
income taxes
|
79.7 | 74.3 | ||||||
Pension
obligations
|
162.2 | 158.7 | ||||||
Other
postretirement benefit obligations
|
120.2 | 123.1 | ||||||
Deferred
credits and other liabilities
|
353.0 | 298.7 | ||||||
Asbestos-related
liabilities (Note 7)
|
221.0 | 227.0 | ||||||
Total
liabilities
|
2,228.1 | 2,178.3 | ||||||
Commitments
and contingencies (Note 7)
|
— | — | ||||||
Minority
interests
|
20.9 | 22.1 | ||||||
Stockholders’
equity (Note 8)
|
||||||||
Series preferred
stock
|
— | — | ||||||
Common
stock, $25/48 par value (shares issued: 2008 and 2007 – 160.0
million)
|
83.3 | 83.3 | ||||||
Additional
paid-in capital
|
421.1 | 438.3 | ||||||
Unearned
compensation
|
(17.1 | ) | (29.8 | ) | ||||
Accumulated
other comprehensive losses
|
(11.1 | ) | (22.8 | ) | ||||
Retained
earnings
|
1,636.9 | 1,610.1 | ||||||
2,113.1 | 2,079.1 | |||||||
Reacquired
stock, at cost (2008 – 46.9 million shares; 2007 – 46.0 million
shares)
|
(1,610.0 | ) | (1,601.1 | ) | ||||
Total
stockholders’ equity
|
503.1 | 478.0 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 2,752.1 | $ | 2,678.4 |
(Dollars
in millions)
|
(Unaudited)
|
|||||||
Three
Months Ended
March
31,
|
||||||||
As
Adjusted
|
||||||||
(Note 5)
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows from Operating Activities:
|
||||||||
Net
income
|
$ | 32.4 | $ | 80.3 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
|
18.3 | 17.1 | ||||||
Amortization
|
10.0 | 9.5 | ||||||
Deferred
income tax provision
|
4.6 | (12.7 | ) | |||||
Gain
on disposal of assets and investments, net
|
(0.4 | ) | — | |||||
Dilution
of investment and loss on sale of 51% interest in
FiberVisions
|
— | (0.2 | ) | |||||
Minority
interests in (losses) earnings of consolidated
subsidiaries
|
(1.2 | ) | 0.5 | |||||
Stock-based
compensation
|
2.3 | 4.4 | ||||||
Other
non-cash charges and credits, net
|
1.8 | (0.6 | ) | |||||
Accruals
and deferrals of cash receipts and payments (net of acquisitions and
dispositions):
|
||||||||
Accounts
receivable, net
|
(10.6 | ) | (11.2 | ) | ||||
Inventories
|
(17.9 | ) | (18.9 | ) | ||||
Asbestos-related
assets and liabilities, net
|
4.2 | 43.1 | ||||||
Other
current assets
|
1.3 | (0.5 | ) | |||||
Accounts
payable
|
(1.9 | ) | (18.2 | ) | ||||
Vertac
obligations
|
0.2 | 1.5 | ||||||
Accrued
expenses
|
(11.0 | ) | (6.2 | ) | ||||
Income
taxes receivable and payable, net
|
0.4 | (33.1 | ) | |||||
Pension
and other postretirement benefit obligations
|
(3.4 | ) | (18.5 | ) | ||||
Non-current
assets and liabilities
|
0.6 | (10.5 | ) | |||||
Net
cash provided by operating activities
|
29.7 | 25.8 | ||||||
Cash
Flows from Investing Activities:
|
||||||||
Capital
expenditures
|
(22.1 | ) | (24.2 | ) | ||||
Acquisitions
and investments, net
|
(1.5 | ) | (0.9 | ) | ||||
Net
cash used in investing activities
|
(23.6 | ) | (25.1 | ) | ||||
Cash
Flows from Financing Activities:
|
||||||||
Long-term
debt proceeds
|
— | 2.8 | ||||||
Long-term
debt payments
|
(1.0 | ) | (22.2 | ) | ||||
Change
in short-term debt
|
10.1 | 0.6 | ||||||
Repurchase
of common stock
|
(31.5 | ) | — | |||||
Dividends
paid
|
(5.8 | ) | — | |||||
Proceeds
from the exercise of stock options
|
0.2 | 3.8 | ||||||
Other,
net including income tax benefits attributable to stock-based
compensation
|
— | 2.0 | ||||||
Net
cash used in financing activities
|
(28.0 | ) | (13.0 | ) | ||||
Effect
of exchange rate changes on cash
|
4.5 | 0.3 | ||||||
Net
decrease in cash and cash equivalents
|
(17.4 | ) | (12.0 | ) | ||||
Cash
and cash equivalents – beginning of period
|
116.5 | 171.8 | ||||||
Cash
and cash equivalents – end of period
|
$ | 99.1 | $ | 159.8 |
1.
|
Basis of Presentation
|
2.
|
Recent
Accounting Pronouncements
|
March
31, 2008
|
December
31, 2007
|
|||||||||||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
Gross
|
Amortization
|
Net
|
Gross
|
Amortization
|
Net
|
|||||||||||||||||||
Customer
relationships
|
$ | 95.6 | $ | 21.8 | $ | 73.8 | $ | 95.6 | $ | 21.1 | $ | 74.5 | ||||||||||||
Trademarks
and tradenames
|
76.2 | 18.1 | 58.1 | 76.2 | 17.6 | 58.6 | ||||||||||||||||||
Other
intangible assets
|
51.5 | 24.3 | 27.2 | 51.0 | 22.9 | 28.1 | ||||||||||||||||||
$ | 223.3 | $ | 64.2 | $ | 159.1 | $ | 222.8 | $ | 61.6 | $ | 161.2 |
Paper
Technology and Ventures
|
Aqualon
Group
|
Total
|
||||||||||
Balance
at January 1, 2008
|
$ | 471.6 | $ | 56.3 | $ | 527.9 | ||||||
Foreign
currency translation and other changes
|
13.7 | 1.0 | 14.7 | |||||||||
Balance
at March 31, 2008
|
$ | 485.3 | $ | 57.3 | $ | 542.6 |
4.
|
Debt
|
March
31,
2008
|
December 31,
2007
|
|||||||
Term
B Loan due 2010
|
$ | 260.0 | $ | 261.0 | ||||
6.6%
notes due 2027
|
15.9 | 15.9 | ||||||
6.75%
senior subordinated notes due 2029
|
250.0 | 250.0 | ||||||
8%
convertible subordinated debentures due 2010
|
2.2 | 2.3 | ||||||
6.5%
junior subordinated deferrable interest debentures due
2029
|
215.3 | 215.1 | ||||||
Term
loans of Hercules Tianpu at rates ranging from 4.33% to 10.93% through
2011(1)
|
47.3 | 42.4 | ||||||
Term
loans of Hercules Jiangmen at rates ranging from 6.24% to 8.22% through
2010
|
12.3 | 7.5 | ||||||
Other
|
4.6 | 1.8 | ||||||
807.6 | 796.0 | |||||||
Less:
Current debt obligations
|
45.1 | 33.7 | ||||||
Long-term
debt
|
$ | 762.5 | $ | 762.3 |
Pension
and Other Postretirement Benefits
|
Three
Months Ended
|
||||||||||||
March
31, 2007
|
||||||||||||
As
|
Effect
of
|
As
|
||||||||||
Reported
|
Change
|
Adjusted
|
||||||||||
Selling,
general and administrative expenses
|
$ | 93.7 | $ | (10.3 | ) | $ | 83.4 | |||||
Profit
from operations
|
59.9 | 10.3 | 70.2 | |||||||||
(Benefit)
provision for income taxes
|
(36.6 | ) | 3.5 | (33.1 | ) | |||||||
Net
income from continuing operations
|
73.5 | 6.8 | 80.3 | |||||||||
Net
income
|
73.5 | 6.8 | 80.3 | |||||||||
Basic
earnings per share
|
$ | 0.64 | $ | 0.06 | $ | 0.70 | ||||||
Diluted
earnings per share
|
$ | 0.64 | $ | 0.06 | $ | 0.70 |
Three
Months Ended
|
||||||||||||
March
31, 2008
|
||||||||||||
Previous
|
Effect
of
|
Current
|
||||||||||
Method
|
Change
|
Method
|
||||||||||
Selling,
general and administrative expenses
|
$ | 105.6 | $ | (11.0 | ) | $ | 94.6 | |||||
Profit
from operations
|
56.4 | 11.0 | 67.4 | |||||||||
Provision
for income taxes
|
7.7 | 3.8 | 11.5 | |||||||||
Net
income from continuing operations
|
25.2 | 7.2 | 32.4 | |||||||||
Net
income
|
25.2 | 7.2 | 32.4 | |||||||||
Basic
earnings per share
|
$ | 0.23 | $ | 0.06 | $ | 0.29 | ||||||
Diluted
earnings per share
|
$ | 0.23 | $ | 0.06 | $ | 0.29 |
Pension
Benefits
|
Other
Postretirement Benefits
|
|||||||||||||||
Three
Months Ended
March
31,
|
Three
Months Ended
March
31,
|
|||||||||||||||
As
Adjusted
|
||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
periodic benefit cost:
|
||||||||||||||||
Service
cost
|
$ | 4.0 | $ | 4.5 | $ | 0.1 | $ | 0.1 | ||||||||
Interest
cost
|
27.0 | 25.9 | 1.9 | 2.2 | ||||||||||||
Expected
return on plan assets
|
(27.9 | ) | (31.2 | ) | — | — | ||||||||||
Amortization
and deferrals
|
(0.7 | ) | (0.7 | ) | (1.7 | ) | (1.9 | ) | ||||||||
Actuarial
losses recognized
|
1.0 | 1.5 | 2.5 | 2.2 | ||||||||||||
$ | 3.4 | $ | — | $ | 2.8 | $ | 2.6 |
6.
|
Asset
Retirement Obligations and Environmental
Contingencies
|
Active
Sites
|
Inactive
Sites
|
Total
|
||||||||||
Balance
at January 1, 2008
|
$ | 10.8 | $ | 67.5 | $ | 78.3 | ||||||
Settlement
payments, net of cost recoveries
|
(0.3 | ) | 1.2 | 0.9 | ||||||||
Changes
in estimated obligations and accretion
|
0.3 | 2.4 | 2.7 | |||||||||
Foreign
currency translation
|
0.1 | 0.4 | 0.5 | |||||||||
Balance
at March 31, 2008
|
$ | 10.9 | $ | 71.5 | $ | 82.4 |
7.
|
Commitments
and Contingencies
|
Balance
January 1, 2008
|
Interest
Income/
Accrual
adjustments, net
|
Insurance
Recovered/
Liabilities
Settled
|
Accretion/
Reclassifi-
cation
|
Balance
March 31, 2008
|
||||||||||||||||
Asbestos-related
assets:
|
||||||||||||||||||||
Insurance
receivable – current
|
$ | 4.0 | $ | — | $ | (4.0 | ) | $ | — | $ | — | |||||||||
Insurance
receivable – non-current
|
16.8 | (0.4 | ) | (16.4 | ) | — | — | |||||||||||||
Restricted
cash in trust
|
7.3 | — | 10.1 | — | 17.4 | |||||||||||||||
Noncurrent
asbestos-related assets
|
24.1 | (0.4 | ) | (6.3 | ) | — | 17.4 | |||||||||||||
Total
asbestos-related assets
|
$ | 28.1 | $ | (0.4 | ) | $ | (10.3 | ) | $ | — | $ | 17.4 | ||||||||
Asbestos-related
liabilities:
|
||||||||||||||||||||
Current
reserve for claims
|
$ | 28.0 | $ | — | $ | — | $ | — | $ | 28.0 | ||||||||||
Noncurrent
reserve for claims
|
227.0 | — | (6.0 | ) | — | 221.0 | ||||||||||||||
Total
asbestos-related liabilities
|
$ | 255.0 | $ | — | $ | (6.0 | ) | $ | — | $ | 249.0 |
Common
Stock
|
Reacquired
Stock
|
|||||||
Balances
at January 1, 2008
|
160,004,908 | 46,006,780 | ||||||
Conversion
of debentures
|
1,677 | — | ||||||
Exercise
of stock options
|
— | (20,341 | ) | |||||
Issuance
of stock awards, net of forfeitures
|
— | (373,934 | ) | |||||
Sales
for taxes
|
— | 7,233 | ||||||
Contribution
of shares to defined contribution benefit plan
|
— | (10,864 | ) | |||||
Repurchases
of common stock
|
— | 1,323,100 | ||||||
Balances
at March 31, 2008
|
160,006,585 | 46,931,974 |
March
31, 2008
|
December 31,
2007
|
|||||||
Inventories:
|
||||||||
Finished
goods
|
$ | 138.1 | $ | 125.5 | ||||
Raw
materials and work-in-process
|
86.3 | 74.9 | ||||||
Supplies
|
24.8 | 23.6 | ||||||
$ | 249.2 | $ | 224.0 | |||||
Property,
plant and equipment:
|
||||||||
Land
|
$ | 16.5 | $ | 16.0 | ||||
Buildings
and equipment
|
1,798.0 | 1,726.4 | ||||||
Construction
in progress
|
120.2 | 113.7 | ||||||
1,934.7 | 1,856.1 | |||||||
Accumulated
depreciation and amortization
|
(1,247.4 | ) | (1,196.1 | ) | ||||
$ | 687.3 | $ | 660.0 |
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Depreciation:
|
||||||||
Included
in Cost of sales and Selling, general and administrative (“SG&A”)
expenses
|
$ | 18.2 | $ | 16.8 | ||||
Accelerated
depreciation included in Other operating expense, net
|
0.1 | 0.3 | ||||||
$ | 18.3 | $ | 17.1 | |||||
Amortization:
|
||||||||
Intangible
assets
|
$ | 2.6 | $ | 1.8 | ||||
Capitalized
software (normal basis) included in SG&A expenses
|
3.8 | 3.8 | ||||||
Accelerated
amortization of capitalized software included in Other operating expense,
net
|
3.4 | 3.5 | ||||||
Deferred
financing costs included in Interest and debt expense
|
0.2 | 0.4 | ||||||
$ | 10.0 | $ | 9.5 | |||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 15.1 | $ | 13.4 | ||||
Income
taxes, net of refunds received
|
6.9 | 7.3 |
Severance
and Other
Exit
Costs
|
Asset
Charges
|
Total
|
||||||||||
Business
and Corporate infrastructure projects
|
$ | 0.8 | $ | 3.4 | $ | 4.2 | ||||||
All
other restructuring programs
|
2.3 | 0.1 | 2.4 | |||||||||
$ | 3.1 | $ | 3.5 | $ | 6.6 | |||||||
Paper
Technologies and Ventures
|
$ | 0.4 | $ | — | $ | 0.4 | ||||||
Aqualon
Group
|
0.1 | — | 0.1 | |||||||||
Corporate
|
2.6 | 3.5 | 6.1 | |||||||||
$ | 3.1 | $ | 3.5 | $ | 6.6 |
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Balance
at beginning of period
|
$ | 19.1 | $ | 10.5 | ||||
Accrued
charges for severance and other exit costs
|
2.4 | 8.4 | ||||||
Cash
payments
|
(5.4 | ) | (4.1 | ) | ||||
Other,
including foreign currency translation
|
1.0 | 0.1 | ||||||
Balance
at end of period
|
$ | 17.1 | $ | 14.9 |
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Severance,
restructuring and other exit costs, net
|
$ | 3.1 | $ | 8.6 | ||||
Accelerated
depreciation and amortization
|
3.5 | 3.7 | ||||||
Legal
settlements
|
— | (0.2 | ) | |||||
Asset
retirement and environmental charges (active sites)
|
0.2 | 0.1 | ||||||
(Gains)
losses on asset dispositions, net
|
(0.2 | ) | 0.1 | |||||
Dismantlement
costs
|
0.8 | 0.7 | ||||||
Other
miscellaneous charges, net
|
0.8 | 0.1 | ||||||
$ | 8.2 | $ | 13.1 |
|
12.
|
Other
Expense, Net
|
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Asbestos-related
costs, net
|
$ | 3.0 | $ | 2.1 | ||||
Investment
dilution and loss on sale of 51% interest in FiberVisions
|
— | (0.2 | ) | |||||
Asset
retirement and environmental charges (inactive sites)
|
2.6 | 1.5 | ||||||
Litigation
settlements and accruals
|
0.8 | 0.7 | ||||||
Other,
net
|
0.5 | (0.8 | ) | |||||
$ | 6.9 | $ | 3.3 |
13.
|
Income
Taxes
|
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Weighted-average
number of common shares outstanding – Basic
|
111.8 | 114.1 | ||||||
Dilutive
effect of:
|
||||||||
Convertible
debentures
|
0.2 | 0.2 | ||||||
Share-based compensation
plans
|
0.4 | 0.6 | ||||||
Weighted-average
number of common shares outstanding – Diluted
|
112.4 | 114.9 | ||||||
The
following were antidilutive and therefore excluded from the computation of
diluted earnings per share:
|
||||||||
Options
to purchase common stock
|
2.0 | 2.7 | ||||||
Warrants
to purchase common stock
|
6.6 | 6.6 | ||||||
8.6 | 9.3 |
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Net
sales:
|
||||||||
Paper
Technology and Ventures
|
$ | 302.9 | $ | 283.2 | ||||
Aqualon
Group
|
255.4 | 219.1 | ||||||
|
$ | 558.3 | $ | 502.3 | ||||
Profit
from operations(1)(2):
|
||||||||
Paper
Technology and Ventures
|
$ | 29.7 | $ | 33.6 | ||||
Aqualon
Group
|
48.0 | 52.3 | ||||||
Corporate
items (3)
|
(10.3 | ) | (15.7 | ) | ||||
|
$ | 67.4 | $ | 70.2 | ||||
Depreciation
and amortization:
|
||||||||
Paper
Technology and Ventures
|
$ | 10.7 | $ | 10.1 | ||||
Aqualon
Group
|
12.7 | 11.2 | ||||||
Corporate
items (1)(4)
|
4.9 | 5.3 | ||||||
$ | 28.3 | $ | 26.6 | |||||
Research
and development:
|
||||||||
Paper
Technology and Ventures
|
$ | 4.5 | $ | 4.4 | ||||
Aqualon
Group
|
6.4 | 5.9 | ||||||
Corporate
items
|
0.2 | 0.1 | ||||||
$ | 11.1 | $ | 10.4 | |||||
Capital
expenditures:
|
||||||||
Paper
Technology and Ventures
|
$ | 5.1 | $ | 5.0 | ||||
Aqualon
Group
|
13.9 | 18.4 | ||||||
Corporate
items
|
3.1 | 0.8 | ||||||
|
$ | 22.1 | $ | 24.2 |
March
31, 2008
|
December
31, 2007
|
|||||||||||||||
Notional
|
Fair
Value
|
Notional
|
Fair
Value
|
|||||||||||||
Foreign
exchange contracts(1)
|
$ | 36.8 | $ | 1.0 | $ | 35.6 | $ | 0.3 | ||||||||
Cross
currency interest rate swaps(2)
|
(500.0 | ) | (163.3 | ) | (500.0 | ) | (112.1 | ) |
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Foreign
exchange contracts, net
|
||||||||
Losses
recognized in Other expense, net
|
$ | (0.2 | ) | $ | (0.4 | ) | ||
Cross
currency interest rate swaps:
|
||||||||
Losses
recognized in OCI (1)
|
(51.2 | ) | (7.1 | ) | ||||
(Losses)
gains recognized in Interest and debt expense
|
(2.6 | ) | 1.2 |
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Three
Months Ended March 31, 2008
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
sales
|
$ | 159.1 | $ | 129.2 | $ | 318.1 | $ | (48.1 | ) | $ | 558.3 | |||||||||
Cost
of sales
|
115.5 | 92.4 | 214.6 | (48.1 | ) | 374.4 | ||||||||||||||
Selling,
general and administrative expenses
|
24.4 | 29.2 | 41.0 | — | 94.6 | |||||||||||||||
Research
and development
|
4.5 | 5.1 | 1.5 | — | 11.1 | |||||||||||||||
Intangible
asset amortization
|
1.6 | 0.2 | 1.0 | (0.2 | ) | 2.6 | ||||||||||||||
Other
operating expense, net
|
4.8 | 0.9 | 2.5 | — | 8.2 | |||||||||||||||
Profit
from operations
|
8.3 | 1.4 | 57.5 | 0.2 | 67.4 | |||||||||||||||
Interest
and debt expense (income), net
|
30.4 | (14.6 | ) | 0.9 | — | 16.7 | ||||||||||||||
Vertac
response costs and litigation charges
|
0.2 | — | — | — | 0.2 | |||||||||||||||
Other
expense (income), net
|
6.6 | 0.6 | (0.5 | ) | 0.2 | 6.9 | ||||||||||||||
Income
(loss) before income taxes, minority interests and equity
loss
|
(28.9 | ) | 15.4 | 57.1 | — | 43.6 | ||||||||||||||
Provision
(benefit) for income taxes
|
(4.7 | ) | 5.5 | 10.8 | (0.1 | ) | 11.5 | |||||||||||||
Income
(loss) before minority interests and equity loss
|
(24.2 | ) | 9.9 | 46.3 | 0.1 | 32.1 | ||||||||||||||
Minority
interests in losses of consolidated subsidiaries
|
— | — | 1.2 | — | 1.2 | |||||||||||||||
Equity
loss of affiliated companies
|
— | (0.9 | ) | (1.2 | ) | 1.2 | (0.9 | ) | ||||||||||||
Equity
income from consolidated subsidiaries
|
56.6 | — | — | (56.6 | ) | — | ||||||||||||||
Net
income
|
$ | 32.4 | $ | 9.0 | $ | 46.3 | $ | (55.3 | ) | $ | 32.4 |
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
Three
Months Ended March 31, 2007
|
||||||||||||||||||||
As
Adjusted (Note 5)
|
||||||||||||||||||||
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
|
16.2 | 32.2 | 35.0 | — | 83.4 | |||||||||||||||
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
|
12.2 | (3.9 | ) | 62.0 | (0.1 | ) | 70.2 | |||||||||||||
Interest
and debt expense (income), net
|
45.2 | (29.0 | ) | 1.0 | — | 17.2 | ||||||||||||||
Vertac
response costs and 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
|
(36.5 | ) | 24.1 | 60.5 | 0.1 | 48.2 | ||||||||||||||
(Benefit)
provision for income taxes
|
(55.5 | ) | 8.8 | 13.5 | 0.1 | (33.1 | ) | |||||||||||||
Income
before minority interests and equity (loss) income
|
19.0 | 15.3 | 47.0 | — | 81.3 | |||||||||||||||
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 from consolidated subsidiaries
|
61.3 | — | — | (61.3 | ) | — | ||||||||||||||
Net
income
|
$ | 80.3 | $ | 15.0 | $ | 46.7 | $ | (61.7 | ) | $ | 80.3 |
Condensed
Consolidating Balance Sheet
|
||||||||||||||||||||
As
of March 31, 2008
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Guarantor
|
Non-Guarantor
|
Eliminations
and
|
||||||||||||||||||
Assets
|
Parent
|
Subsidiaries
|
Subsidiaries
|
Adjustments
|
Consolidated
|
|||||||||||||||
Current
assets
|
||||||||||||||||||||
Cash
and cash equivalents
|
$ | 4.4 | $ | 2.2 | $ | 92.5 | $ | — | $ | 99.1 | ||||||||||
Accounts
receivable, net
|
69.0 | 59.1 | 262.1 | — | 390.2 | |||||||||||||||
Intercompany
receivables (payables)
|
66.8 | 14.3 | (1.9 | ) | (79.2 | ) | — | |||||||||||||
Inventories
|
59.9 | 71.7 | 118.3 | (0.7 | ) | 249.2 | ||||||||||||||
Deferred
income taxes
|
30.4 | 4.0 | 8.6 | — | 43.0 | |||||||||||||||
Income
taxes receivable
|
71.7 | — | — | (48.7 | ) | 23.0 | ||||||||||||||
Other
current assets
|
19.0 | 3.9 | 18.7 | — | 41.6 | |||||||||||||||
Total
current assets
|
321.2 | 155.2 | 498.3 | (128.6 | ) | 846.1 | ||||||||||||||
Property,
plant and equipment, net
|
130.4 | 155.8 | 401.1 | — | 687.3 | |||||||||||||||
Investments
in subsidiaries and advances, net
|
1,745.4 | 80.8 | — | (1,826.2 | ) | — | ||||||||||||||
Intangible
assets, net
|
132.6 | 2.0 | 24.5 | — | 159.1 | |||||||||||||||
Goodwill
|
59.3 | 39.7 | 443.6 | — | 542.6 | |||||||||||||||
Deferred
income taxes
|
376.2 | — | 13.3 | (6.7 | ) | 382.8 | ||||||||||||||
Asbestos-related
assets
|
17.4 | — | — | — | 17.4 | |||||||||||||||
Deferred
charges and other assets
|
60.1 | 25.1 | 31.6 | — | 116.8 | |||||||||||||||
Total
assets
|
$ | 2,842.6 | $ | 458.6 | $ | 1,412.4 | $ | (1,961.5 | ) | $ | 2,752.1 | |||||||||
Liabilities
and Stockholders' Equity
|
||||||||||||||||||||
Current
liabilities
|
||||||||||||||||||||
Accounts
payable
|
$ | 58.4 | $ | 41.0 | $ | 129.6 | $ | — | $ | 229.0 | ||||||||||
Intercompany
payables
|
2.4 | 48.3 | 28.8 | (79.5 | ) | — | ||||||||||||||
Asbestos-related
liabilities
|
28.0 | — | — | — | 28.0 | |||||||||||||||
Current
debt obligations
|
4.0 | — | 41.1 | — | 45.1 | |||||||||||||||
Vertac
obligations
|
20.2 | — | — | — | 20.2 | |||||||||||||||
Accrued
expenses
|
94.5 | 21.5 | 66.9 | 0.3 | 183.2 | |||||||||||||||
Income
taxes payable
|
— | 53.2 | 9.7 | (48.7 | ) | 14.2 | ||||||||||||||
Deferred income
taxes
|
— | — | 9.8 | — | 9.8 | |||||||||||||||
Total
current liabilities
|
207.5 | 164.0 | 285.9 | (127.9 | ) | 529.5 | ||||||||||||||
Long-term
debt
|
739.4 | — | 23.1 | — | 762.5 | |||||||||||||||
Deferred
income taxes
|
— | 6.7 | 79.7 | (6.7 | ) | 79.7 | ||||||||||||||
Pension
obligations
|
108.8 | — | 53.4 | — | 162.2 | |||||||||||||||
Other
postretirement benefit obligations
|
116.8 | — | 3.4 | — | 120.2 | |||||||||||||||
Deferred
credits and other liabilities
|
318.9 | 15.1 | 19.0 | — | 353.0 | |||||||||||||||
Asbestos-related
liabilities
|
221.0 | — | — | — | 221.0 | |||||||||||||||
Intercompany
notes payable (receivable)
|
627.1 | (743.0 | ) | 115.9 | — | — | ||||||||||||||
Minority
interests
|
— | — | 20.9 | — | 20.9 | |||||||||||||||
Total
stockholders' equity
|
503.1 | 1,015.8 | 811.1 | (1,826.9 | ) | 503.1 | ||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 2,842.6 | $ | 458.6 | $ | 1,412.4 | $ | (1,961.5 | ) | $ | 2,752.1 |
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
Three
Months Ended March 31, 2008
|
||||||||||||||||||||
Unconsolidated
|
||||||||||||||||||||
Parent
|
Guarantor
Subsidiaries
|
Non-
Guarantor
Subsidiaries
|
Eliminations
and
Adjustments
|
Consolidated
|
||||||||||||||||
Net
Cash Provided by Operating Activities
|
$ | 11.9 | $ | 35.0 | $ | 38.4 | $ | (55.6 | ) | $ | 29.7 | |||||||||
Cash
Flows From Investing Activities:
|
||||||||||||||||||||
Capital
expenditures
|
(4.6 | ) | (4.2 | ) | (13.3 | ) | — | (22.1 | ) | |||||||||||
Acquisitions and investments,
net
|
— | (1.5 | ) | — | — | (1.5 | ) | |||||||||||||
Net cash used in investing
activities
|
(4.6 | ) | (5.7 | ) | (13.3 | ) | — | (23.6 | ) | |||||||||||
Cash
Flows From Financing Activities:
|
||||||||||||||||||||
Long-term debt
payments
|
(1.0 | ) | — | — | — | (1.0 | ) | |||||||||||||
Change in short-term
debt
|
— | — | 10.1 | — | 10.1 | |||||||||||||||
Change
in intercompany advances
|
8.3 | (28.6 | ) | (26.7 | ) | 47.0 | — | |||||||||||||
Repurchase
of common stock
|
(31.5 | ) | — | — | — | (31.5 | ) | |||||||||||||
Dividends
paid
|
(5.8 | ) | — | — | — | (5.8 | ) | |||||||||||||
Intercompany dividends
paid
|
— | — | (8.6 | ) | 8.6 | — | ||||||||||||||
Proceeds from the exercise of
stock options
|
0.2 | — | — | — | 0.2 | |||||||||||||||
Net
cash used in financing activities
|
(29.8 | ) | (28.6 | ) | (25.2 | ) | 55.6 | (28.0 | ) | |||||||||||
Effect of
exchange rate changes on cash
|
— | — | 4.5 | — | 4.5 | |||||||||||||||
Net
(decrease) increase in cash and cash equivalents
|
(22.5 | ) | 0.7 | 4.4 | — | (17.4 | ) | |||||||||||||
Cash and
cash equivalents - beginning of period
|
26.9 | 1.5 | 88.1 | — | 116.5 | |||||||||||||||
Cash and
cash equivalents - end of period
|
$ | 4.4 | $ | 2.2 | $ | 92.5 | $ | — | $ | 99.1 |
Condensed
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
Three
Months Ended March 31, 2007
|
||||||||||||||||||||
As
Adjusted (Note 5)
|
||||||||||||||||||||
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
Flows 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
Flows 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 | — | ||||||||||||
Intercompany dividends
paid
|
— | — | (1.1 | ) | 1.1 | — | ||||||||||||||
Proceeds from the exercise of
stock options
|
3.8 | — | — | — | 3.8 | |||||||||||||||
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 cashequivalents
|
5.6 | — | (17.6 | ) | — | (12.0 | ) | |||||||||||||
Cash and
cash equivalents - beginning of period
|
89.7 | 0.5 | 81.6 | — | 171.8 | |||||||||||||||
Cash and
cash equivalents - end of period
|
$ | 95.3 | $ | 0.5 | $ | 64.0 | $ | — | $ | 159.8 |
2008
|
2007
|
|||||||
North
America
|
47 | % | 49 | % | ||||
Europe
|
36 | % | 35 | % | ||||
Asia
Pacific
|
11 | % | 11 | % | ||||
Latin
America
|
6 | % | 5 | % | ||||
Consolidated
|
100 | % | 100 | % |
2008
|
2007
|
|||||||
Paper
Technologies and Ventures
|
54 | % | 56 | % | ||||
Aqualon
Group
|
46 | % | 44 | % | ||||
Consolidated
|
100 | % | 100 | % |
2008
|
2007
|
Change
|
||||||||||
Net
sales
|
$ | 558.3 | $ | 502.3 | $ | 56.0 |
Three
Months Ended March 31,
|
%
Change
Excluding
|
|||||||||||||||
Regions
|
2008
|
2007
|
%
Change
|
ROE
|
||||||||||||
North
America
|
$ | 263.7 | $ | 247.7 | 6 | % | 5 | % | ||||||||
Europe
|
200.5 | 174.9 | 15 | % | 3 | % | ||||||||||
Asia
Pacific
|
60.8 | 52.9 | 15 | % | 12 | % | ||||||||||
Latin
America
|
33.3 | 26.8 | 24 | % | 15 | % | ||||||||||
All
regions
|
$ | 558.3 | $ | 502.3 | 11 | % | 6 | % |
2008
|
2007
|
Change
|
||||||||||
Cost
of sales
|
$ | 374.4 | $ | 323.4 | $ | 51.0 | ||||||
As
a % of sales
|
67 | % | 64 | % |
2008
|
2007
|
Change
|
||||||||||
Selling,
general and administrative expenses
|
$ | 94.6 | $ | 83.4 | $ | 11.2 | ||||||
As
a % of sales
|
17 | % | 17 | % |
2008
|
2007
|
Change
|
||||||||||
Research
and development
|
$ | 11.1 | $ | 10.4 | $ | 0.7 | ||||||
As
a % of sales
|
2 | % | 2 | % |
2008
|
2007
|
Change
|
||||||||||
Intangible
asset amortization
|
$ | 2.6 | $ | 1.8 | $ | 0.8 |
2008
|
2007
|
Change
|
||||||||||
Other
operating expense, net
|
$ | 8.2 | $ | 13.1 | $ | (4.9 | ) |
2008
|
2007
|
Change
|
||||||||||
Interest
and debt expense
|
$ | 16.7 | $ | 17.2 | $ | (0.5 | ) |
2008
|
2007
|
Change
|
||||||||||
Vertac
response costs and litigation charges
|
$ | 0.2 | $ | 1.5 | $ | (1.3 | ) |
2008
|
2007
|
Change
|
||||||||||
Other
expense, net
|
$ | 6.9 | $ | 3.3 | $ | 3.6 |
2008
|
2007
|
Change
|
||||||||||
Provision
(benefit) for income taxes
|
$ | 11.5 | $ | (33.1 | ) | $ | 44.6 | |||||
Effective
tax rate
|
26 | % | (69 | %) |
2008
|
2007
|
Change
|
||||||||||
Minority
interests in losses (earnings) of consolidated
subsidiaries
|
$ | 1.2 | $ | (0.5 | ) | $ | 1.7 |
2008
|
2007
|
Change
|
||||||||||
Equity
income (loss) of affiliated companies, net of tax
|
$ | (0.9 | ) | $ | (0.5 | ) | $ | (0.4 | ) |
2008
|
2007
|
Change
|
%
Change
|
|||||||||||||
Net
sales:
|
||||||||||||||||
Paper
Technologies and Ventures
|
||||||||||||||||
Paper
Technologies
|
$ | 226.7 | $ | 221.2 | $ | 5.5 | 2 | % | ||||||||
Ventures
|
76.2 | 62.0 | 14.2 | 23 | % | |||||||||||
302.9 | 283.2 | 19.7 | 7 | % | ||||||||||||
Aqualon
Group
|
||||||||||||||||
Coatings
& Construction
|
119.1 | 100.3 | 18.8 | 19 | % | |||||||||||
Regulated
|
68.9 | 60.3 | 8.6 | 14 | % | |||||||||||
Energy
& Specialties
|
67.4 | 58.5 | 8.9 | 15 | % | |||||||||||
255.4 | 219.1 | 36.3 | 17 | % | ||||||||||||
$ | 558.3 | $ | 502.3 | $ | 56.0 | 11 | % | |||||||||
Profit
from operations:
|
||||||||||||||||
Paper
Technologies and Ventures
|
$ | 29.7 | $ | 33.6 | $ | (3.9 | ) | (12 | ) % | |||||||
Aqualon
Group
|
48.0 | 52.3 | (4.3 | ) | (8 | ) % | ||||||||||
Corporate
Items
|
(10.3 | ) | (15.7 | ) | 5.4 | 34 | % | |||||||||
Consolidated
|
$ | 67.4 | $ | 70.2 | $ | (2.8 | ) | (4 | ) % |
Net
Sales Percentage Increase (Decrease) from 2007 Due To:
|
||||||||||||||||||||
Volume
|
Mix
|
Price
|
Rates
of Exchange
|
Total
|
||||||||||||||||
Paper
Technologies
|
— | (3 | )% | (1 | )% | 6 | % | 2 | % | |||||||||||
Ventures
|
7 | % | 4 | % | 7 | % | 5 | % | 23 | % | ||||||||||
2 | % | (2 | )% | 1 | % | 6 | % | 7 | % |
Analysis
of Changes in Profitability
|
||||||||
2007
Profit from operations
|
$ | 33.6 | ||||||
Changes
due to:
|
||||||||
Volume
|
1.6 | |||||||
Regional
and product mix
|
(0.8 | ) | ||||||
Price
|
2.3 | |||||||
Raw
material, transportation and utility costs
|
(4.9 | ) | ||||||
All
other manufacturing costs
|
(1.2 | ) | ||||||
ROE
|
2.8 | |||||||
SG&A
and other expenses
|
2.2 | |||||||
Restructuring,
severance and other exit costs, accelerated depreciation and other
charges
|
(0.3 | ) | ||||||
Impact
of change in accounting method for pensions
|
(5.6 | ) | ||||||
Net
change
|
(3.9 | ) | ||||||
2008
Profit from operations
|
$ | 29.7 |
Net
Sales Percentage Increase (Decrease) from 2007 Due To:
|
||||||||||||||||||||
Volume
|
Mix
|
Price
|
Rates
of Exchange
|
Total
|
||||||||||||||||
Coatings
& Construction
|
15 | % | (4 | )% | 1 | % | 7 | % | 19 | % | ||||||||||
Regulated
|
5 | % | 3 | % | 2 | % | 4 | % | 14 | % | ||||||||||
Energy
& Specialties
|
19 | % | (8 | )% | 1 | % | 3 | % | 15 | % | ||||||||||
|
14 | % | (3 | )% | 1 | % | 5 | % | 17 | % |
Analysis
of Changes in Profitability
|
||||||||
2007
Profit from operations
|
$ | 52.3 | ||||||
Changes
due to:
|
||||||||
Volume
|
12.1 | |||||||
Regional
and product mix
|
(8.5 | ) | ||||||
Price
|
3.2 | |||||||
Raw
material, transportation and utility costs
|
(9.0 | ) | ||||||
All
other manufacturing costs
|
2.9 | |||||||
ROE
|
0.2 | |||||||
SG&A
and other expenses
|
(0.9 | ) | ||||||
Restructuring,
severance and other exit costs and accelerated depreciation and other
charges
|
0.4 | |||||||
Impact
of change in accounting method for pensions
|
(4.7 | ) | ||||||
Net
change
|
(4.3 | ) | ||||||
2008
Profit from operations
|
$ | 48.0 |
2008
|
2007
|
|||||||
Severance,
restructuring and other exit costs
|
$ | 2.6 | $ | 7.7 | ||||
Accelerated
depreciation and amortization
|
3.5 | 3.6 | ||||||
Asset
retirement and environmental charges
|
0.2 | 0.1 | ||||||
Gains
on asset dispositions, net
|
(0.3 | ) | — | |||||
Dismantlement
costs
|
0.7 | 0.6 | ||||||
Other
unallocated corporate costs
|
3.4 | 3.5 | ||||||
Other
miscellaneous expense, net
|
0.2 | 0.2 | ||||||
$ | 10.3 | $ | 15.7 |
Three
Months Ended March 31,
|
||||||||
Operating Activities
|
2008
|
2007
|
||||||
Net
income, depreciation, amortization and all other non-cash charges and
credits, net
|
$ | 67.8 | $ | 98.3 | ||||
Changes
in working capital, net
|
(30.4 | ) | (48.3 | ) | ||||
Income
tax payments net of refunds
|
(6.9 | ) | (7.3 | ) | ||||
Interest
paid
|
(15.1 | ) | (13.4 | ) | ||||
Voluntary
pension plan contributions
|
— | (17.1 | ) | |||||
Other
postretirement benefits payments, net
|
(4.9 | ) | (4.0 | ) | ||||
Restructuring,
severance and other exit cost payments
|
(6.1 | ) | (4.3 | ) | ||||
ARO
and environmental contingency payments, net of recoveries
|
0.9 | (2.3 | ) | |||||
Asbestos
trust receipts, net of settlement payments
|
4.3 | 43.1 | ||||||
All
other accruals, deferrals and other cash receipts and (payments),
net
|
20.1 | (18.9 | ) | |||||
Net
cash provided by operating activities
|
$ | 29.7 | $ | 25.8 |
Three
Months Ended March 31,
|
||||||||
Investing Activities
|
2008
|
2007
|
||||||
Capital
expenditures
|
$ | 22.1 | $ | 24.2 | ||||
Acquisitions
and investments, net
|
1.5 | 0.9 | ||||||
Net
cash used in investing activities
|
$ | 23.6 | $ | 25.1 |
Three
Months Ended March 31,
|
||||||||
Financing Activities
|
2008
|
2007
|
||||||
Long-term
debt payments
|
$ | 1.0 | $ | 22.2 | ||||
Long-term
debt proceeds and changes in short-term debt, net
|
(10.1 | ) | (3.4 | ) | ||||
Repurchase
of common stock
|
31.5 | — | ||||||
Dividends
paid
|
5.8 | — | ||||||
Proceeds
from the exercise of stock options and all other sources,
net
|
(0.2 | ) | (5.8 | ) | ||||
Net
cash used in financing activities
|
$ | 28.0 | $ | 13.0 |
Period
|
Total
Number of Shares Purchased (1)
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs (1)
|
Approximate
Dollar Value of Shares That May Yet Be Purchased Under Plans or Programs
(1)
|
||||||||||||
Cumulative
through 2007
|
2,800,860 | 2,800,860 | $ | 145,651,609 | ||||||||||||
January
1 – 31, 2008
|
200,000 | $ | 18.15 | 200,000 | $ | 142,020,954 | ||||||||||
February
1 – 29, 2008
|
500,000 | $ | 17.31 | 500,000 | $ | 133,367,544 | ||||||||||
March
1 – 31, 2008
|
623,100 | $ | 17.73 | 623,100 | $ | 122,319,595 | ||||||||||
Totals
for 2008
|
1,323,100 | 1,323,100 | ||||||||||||||
Cumulative
through 2008
|
4,123,960 | 4,123,960 | $ | 122,319,595 |
|
(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)
|
|||
April
28, 2008
|
Number
|
Description
|
|
18.1*
|
Letter
Regarding Change in Accounting Principle
|
|
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
|