EX-99.1 2 l31321aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
(TIMKEN LOGO)
The Timken Company
Media Contact: Jeff Dafler
Manager – Global Media &
Government Relations
Mail Code: GNW-37
1835 Dueber Avenue, S.W.
Canton, OH 44706 U.S.A.
Telephone: (330) 471-3514
Facsimile: (330) 471-7032
jeff.dafler@timken.com
Investor Contact: Steve Tschiegg
Manager – Investor Relations
Mail Code: GNE-26
1835 Dueber Avenue, S.W.
Canton, OH 44706 U.S.A.
Telephone: (330) 471-7446
Facsimile: (330) 471-2797
steve.tschiegg@timken.com
For Additional Information:
www.timken.com/media
www.timken.com/investors
NEWS RELEASE
Timken Reports Record First-Quarter Results
  •   Sales rise as global industrial demand remains strong
 
  •   Earnings improve on execution of strategic initiatives
 
  •   Company confirms expectations for record full-year earnings
     CANTON, Ohio – April 30, 2008 – The Timken Company (NYSE: TKR) today reported sales of $1.43 billion during the first quarter of 2008, an increase of 12 percent over the same period a year ago. The increase was driven by strong sales in global industrial markets, as the company benefited from its capacity-expansion initiatives, as well as the favorable impact of pricing, surcharges and currency.
     First-quarter income from continuing operations was $84.5 million, or $0.88 per diluted share, compared to $74.3 million, or $0.78 per diluted share, in the first quarter of 2007. Excluding special items, income from continuing operations increased 26 percent to $78.9 million or $0.82 per diluted share for the first quarter of 2008, compared to $62.5 million or $0.66 per diluted share in the prior-year period. Strong first-quarter earnings benefited from favorable pricing, volume, mix and currency, which were partially offset by higher LIFO charges related to increased material costs. Special items, net of tax, in the first quarter of 2008 totaled $5.6 million of income compared to $11.8 million of income in the same period last year and included a gain on a real estate divestment associated with a prior plant closure, partially offset by charges related to restructuring, rationalization and impairment.

 

 

     “We achieved record first-quarter earnings as execution of our strategic initiatives and a more efficient operating model allowed us to take better advantage of continued strong global demand for our industrial products,” said James W. Griffith, Timken’s president and chief executive officer. “We continue to have a positive outlook for 2008 performance as we bring more capacity online in attractive markets and advance our pricing and execution initiatives.”
     During the quarter, the company:
  •   Implemented the next wave of Project O.N.E., Timken’s business process improvement and global systems initiative, covering most of the company’s remaining U.S. and European operations;
 
  •   Completed construction of a new industrial bearing manufacturing plant in Chennai, India, and a new aerospace and precision products facility in Chengdu, China, which are part of Timken’s strategy of driving growth in key global industrial markets; and
 
  •   Acquired the assets of Boring Specialties Inc. (BSI), which provides steel components for the oil and gas industry, further expanding Timken’s ability to serve the growing market for high-performance energy products.
     Total debt was $873.3 million as of March 31, 2008, or 29.7 percent of capital. Net debt at March 31, 2008, was $805.1 million, or 28.0 percent of capital, compared to $693.0 million, or 26.1 percent, as of Dec. 31, 2007. The increase in net debt was due to seasonal working capital requirements and strong demand. In addition, net debt increased due to acquisitions, net of divestments, during the quarter. The company expects to end 2008 with lower net debt and leverage, providing additional financial capacity to pursue strategic investments.
     First-quarter financial reporting reflects changes to the company’s management structure to improve execution and accelerate profitable growth. The company operates under two major business groups, the Steel Group and the Bearings and Power Transmission Group, which includes three reporting segments – Mobile Industries, Process Industries, and Aerospace and Defense. The following group and segment results exclude special items and unallocated corporate expenses.
     
The Timken Company   -2-

 

 

Bearings and Power Transmission Group Results
     The Bearings and Power Transmission Group had first-quarter sales of $1.05 billion, up 13 percent from $0.93 billion for the same period last year, primarily resulting from organic growth in the Process Industries and Aerospace and Defense segments, and the favorable impact of acquisitions and currency. Earnings before interest and taxes (EBIT) for the first quarter were $93.7 million, up 72 percent from $54.5 million in the first quarter of 2007, benefiting from improvements across all three reporting segments.
Mobile Industries Segment Results
     Timken’s Mobile Industries business provides products and services for the automotive, mining, agriculture, construction and rail industries. These products and services include bearings and bearing assemblies used in a range of powertrain applications, seals, lubricants, sensor systems and repair services.
     In the first quarter, Mobile Industries sales were $635.3 million, an increase of 4 percent from $609.5 million for the same period a year ago. Higher sales were driven by stronger demand in the off-highway and heavy-truck market sectors, pricing and the impact of currency. These favorable factors were partially offset by lower demand from the North American light-vehicle market sector, which included the effects of a strike in the automotive industry.
     EBIT was $26.6 million, up 27 percent from $20.9 million in the first quarter of 2007, driven by improved pricing, as well as the favorable impact of mix, currency and restructuring, partially offset by the effects of a strike in the automotive industry.
     The company expects full-year results to improve for the Mobile Industries segment compared to the prior year, as it realizes the benefits of its pricing, portfolio-management and restructuring initiatives, which are expected to more than offset higher raw-material costs.
     
The Timken Company   -3-

 

 

Process Industries Segment Results
     Process Industries serves customers in power transmission, energy and heavy industry, including the metals, aggregate, cement, and pulp and paper sectors, with original equipment and aftermarket solutions. Timken’s Process Industries products are found in gear drives and a broad range of industrial machines.
     Process Industries had first-quarter sales of $312.6 million, up 25 percent from $249.2 million for the same period a year ago. The increase resulted from strong demand across broad industrial market sectors, new capacity coming online and advanced customer purchases ahead of Project O.N.E. implementation. In addition, the company benefited from strong pricing and currency.
     First-quarter EBIT was $59.9 million, up 121 percent from $27.1 million in the prior-year period. EBIT performance benefited from strong volume, increased capacity for large-bore products, pricing and currency. Partially offsetting these benefits were higher raw-material, manufacturing and logistics costs.
     Timken expects to see continued top-line growth in the Process Industries segment in 2008 compared to 2007, particularly in market sectors where the company has focused its growth initiatives, including energy, heavy industry and distribution, as well as in Asia. The company continues to expect strong results in Process Industries for the full year compared to 2007, although lower than first-quarter levels primarily due to high raw-material costs.
Aerospace and Defense Segment Results
     Timken’s Aerospace and Defense business serves the civil aviation, defense, health and machine-tool sectors with original equipment and aftermarket solutions. The company’s aerospace products are found in engines, gearboxes and helicopter transmissions.
     Aerospace and Defense had first-quarter sales of $102.1 million, up 39 percent from $73.7 million for the same period last year. The increase was driven primarily by the Purdy acquisition, completed in the fourth quarter of last year, as well as strong demand and favorable pricing. Excluding the Purdy acquisition, organic Aerospace and Defense sales rose approximately 10 percent.
     
The Timken Company   -4-

 

 

     First-quarter EBIT was $7.2 million, up 10 percent from $6.5 million in the prior-year period. Performance benefited from the Purdy acquisition and pricing, partially offset by investments in capacity expansions, including the aerospace and precision products plant in Chengdu, China, and higher manufacturing and logistics costs associated with managing strong demand through constrained facilities.
     Timken expects aerospace demand to remain strong and performance to benefit from the integration of the Purdy acquisition, improved manufacturing performance and pricing, driving margin improvement for 2008 compared to 2007.
Steel Group Results
     Sales for the Steel Group, including inter-group sales, were $425.0 million, an increase of 9 percent from $390.3 million for the same period last year. Excluding the net impact of the BSI acquisition and divestment of the group’s steel tube manufacturing operations in England in 2007, sales increased 16 percent. The increase was driven by raw-material surcharges and higher demand in the energy sector, partially offset by lower demand in automotive-related sectors.
     First-quarter EBIT was $53.4 million, down 19 percent from $65.5 million in the prior-year period. The company benefited from higher volume, favorable mix and surcharges, which were more than offset by the negative impact of higher LIFO expense, as well as significantly higher raw-material costs and inflation in manufacturing costs.
     The company expects Steel Group performance in 2008 to be comparable to 2007, as strong demand and the favorable impact of the BSI acquisition are anticipated to be offset by LIFO expense, driven by significant inflation in the cost of raw-materials and consumables.
Outlook
     The company expects earnings per diluted share for 2008, excluding special items, to be $2.75 to $2.95 for the year and $0.73 to $0.83 for the second quarter,
     
The Timken Company   -5-

 

 

compared to $2.40 and $0.73, respectively, for the same periods in 2007. Global industrial demand is expected to remain strong in 2008 as additional capacity comes online in key growth markets. Timken will continue to pursue pricing, portfolio management and better execution to improve operating results, which are expected to contribute to anticipated record performance for the company in 2008.
Conference Call Information
     The company will host a conference call for investors and analysts today to discuss financial results.
                 
 
   Conference Call:   Wednesday, April 30, 2008
 
           11 a.m. Eastern Time
 
 
   Live Dial-In:          800-344-0593 or 706-634-0975
 
           (Call in 10 minutes prior to be included.)
 
           Conference ID: 24734622
 
                
 
           Replay Dial-In through May 7, 2008:
 
           800-642-1687 or 706-645-9291
 
                
 
   Live Webcast:      www.timken.com/investors
About The Timken Company
     The Timken Company (NYSE: TKR, http://www.timken.com) keeps the world turning, with innovative friction management and power transmission products and services, enabling our customers to perform faster and more efficiently. With sales of $5.2 billion in 2007, operations in 27 countries and approximately 25,000 employees, Timken is Where You Turn™ for better performance.
     Certain statements in this news release (including statements regarding the company’s forecasts, estimates and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the future performance of the specific reporting segments and the company’s financial performance, including the information under the heading “Outlook,” are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the completion of the company’s financial statements for the first quarter of 2008; fluctuations in raw-material and energy costs and the operation of the company’s surcharge mechanisms; the company’s ability to respond to the changes in its end markets, especially the North American automotive industry; changes in the financial health of the company’s customers; changes in the expected costs associated with product warranty claims; and the impact on operations of general economic conditions, higher raw-material and energy costs, fluctuations in customer demand and the company’s ability to achieve the benefits of its future and ongoing programs and initiatives, including, without
     
The Timken Company   -6-

 

 

limitation, the implementation of its Mobile Industries segment restructuring program and initiatives and the rationalization of the company’s Canton bearing operations. These and additional factors are described in greater detail in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2007, page 8. The company undertakes no obligation to update or revise any forward-looking statement.
###
     
The Timken Company   -7-

 

 

(Unaudited)
                                 
CONDENSED CONSOLIDATED STATEMENT OF INCOME   AS REPORTED   ADJUSTED (1)
(Dollars in thousands, except share data)   Q1 2008   Q1 2007   Q1 2008   Q1 2007
     
Net sales
   $ 1,434,670     $ 1,284,513     $ 1,434,670     $ 1,284,513  
Cost of products sold
     1,121,759       1,016,651       1,121,759       1,016,651  
Manufacturing rationalization/reorganization expenses — cost of products sold
     1,374       11,843       —       —  
     
Gross Profit
   $ 311,537     $ 256,019     $ 312,911     $ 267,862  
Selling, administrative & general expenses (SG&A)
     177,138       162,973       177,138       162,973  
Manufacturing rationalization/reorganization expenses — SG&A
     808       1,330       —       —  
(Gain) loss on divestitures
     (8 )     354       —       —  
Impairment and restructuring
     2,876       13,776       —       —  
     
Operating Income
   $ 130,723     $ 77,586     $ 135,773     $ 104,889  
Other (expense)
     (5,772 )     (2,254 )     (5,772 )     (2,254 )
Special items — other income
     20,354       343       —       —  
     
Earnings Before Interest and Taxes (EBIT) (2)
   $ 145,305     $ 75,675     $ 130,001     $ 102,635  
Interest expense, net
     (9,600 )     (7,689 )     (9,600 )     (7,689 )
     
Income From Continuing Operations Before Income Taxes
   $ 135,705     $ 67,986     $ 120,401     $ 94,946  
Provision for income taxes
     51,240       (6,268 )     41,538       32,471  
     
Income From Continuing Operations
   $ 84,465     $ 74,254     $ 78,863     $ 62,475  
     
Income from discontinued operations net of income taxes, special items (3)
     —       940       —       —  
Income from discontinued operations net of income taxes, other (3)
     —       —       —       —  
     
Net Income
   $ 84,465     $ 75,194     $ 78,863     $ 62,475  
     
 
                                
Earnings Per Share — Continuing Operations
   $ 0.89     $ 0.79     $ 0.83     $ 0.66  
Earnings Per Share — Discontinued Operations
     —       0.01       —       —  
         
Earnings Per Share
   $ 0.89     $ 0.80     $ 0.83     $ 0.66  
 
                                
Diluted Earnings Per Share — Continuing Operations
   $ 0.88     $ 0.78     $ 0.82     $ 0.66  
Diluted Earnings Per Share — Discontinued Operations
     —       0.01       —       —  
         
Diluted Earnings Per Share
   $ 0.88     $ 0.79     $ 0.82     $ 0.66  
 
                                
Average Shares Outstanding
     95,254,264       93,963,797       95,254,264       93,963,797  
Average Shares Outstanding-assuming dilution
     95,982,217       94,811,930       95,982,217       94,811,930  
     

 

 

                 
BUSINESS SEGMENTS
(Dollars in thousands) (Unaudited)   Q1 2008     Q1 2007  
Mobile Industries Segment
                
Net sales to external customers
   $ 635,295     $ 609,455  
Adjusted earnings (loss) before interest and taxes (EBIT) * (2)
     26,609       20,888  
Adjusted EBIT Margin (2)
     4.2 %     3.4 %
 
                
Process Industries Segment
                
Net sales to external customers
   $ 312,169     $ 248,867  
Intergroup sales
     409       366  
     
Total net sales
   $ 312,578     $ 249,233  
Adjusted earnings before interest and taxes (EBIT) * (2)
     59,899       27,064  
Adjusted EBIT Margin (2)
     19.2 %     10.9 %
 
                
Aerospace and Defense Segment
                
Net sales to external customers
   $ 102,132     $ 73,714  
Adjusted earnings before interest and taxes (EBIT) * (2)
     7,177       6,509  
Adjusted EBIT Margin (2)
     7.0 %     8.8 %
 
                
Total Bearings and Power Transmission Group
                
Net sales to external customers
   $ 1,049,596     $ 932,036  
Intergroup sales
     409       366  
     
Total net sales
   $ 1,050,005     $ 932,402  
Adjusted earnings before interest and taxes (EBIT) * (2)
     93,685       54,461  
Adjusted EBIT Margin (2)
     8.9 %     5.8 %
 
                
Steel Group (3)
                
Net sales to external customers
   $ 385,074     $ 352,477  
Intergroup sales
     39,914       37,815  
     
Total net sales
   $ 424,988     $ 390,292  
Adjusted earnings before interest and taxes (EBIT) * (2)
     53,379       65,526  
Adjusted EBIT Margin (2)
     12.6 %     16.8 %
 
                
Unallocated corporate expense
   $ (16,425 )   $ (16,228 )
 
                
Intergroup eliminations income (expense) (4)
   $ (638 )   $ (1,124 )
 
                
Consolidated
                
Net sales to external customers
   $ 1,434,670     $ 1,284,513  
Adjusted earnings before interest and taxes (EBIT) * (2)
   $ 130,001     $ 102,635  
Adjusted EBIT Margin (2)
     9.1 %     8.0 %
 
(1)   “Adjusted” statements exclude the impact of impairment and restructuring, manufacturing rationalization/ reorganization and special charges and credits for all periods shown.
 
(2)   EBIT is defined as operating income plus other income (expense). EBIT Margin is EBIT as a percentage of net sales. EBIT and EBIT margin on a segment basis exclude certain special items set forth above. EBIT and EBIT Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting EBIT and EBIT Margin best reflect the performance of the company’s business segments and EBIT disclosures are responsive to investors.
 
(3)   Discontinued Operations reflects the December 8, 2006 sale of Timken Latrobe Steel. Steel Group Net sales and Adjusted EBIT have been changed to exclude Timken Latrobe Steel for all periods. Income From Discontinued Operations Net of Income Taxes, Special Items includes the gain on sale. Income From Discontinued Operations Net of Income Taxes, Other includes prior activity of Timken Latrobe Steel in accordance with the sales agreement.
 
(4)   Intergroup eliminations represent intergroup profit or loss between the Steel Group and the Bearings and Power Transmission Group

 

 

Reconciliation of Total Debt to Net Debt and the Ratio of Net Debt to Capital:
                 
(Dollars in thousands) (Unaudited)   Mar 31, 2008   Dec 31, 2007
 
Short-term debt
   $ 148,032     $ 142,568  
Long-term debt
     725,239       580,587  
     
Total Debt
     873,271       723,155  
Less: Cash and cash equivalents
     (68,206 )     (30,144 )
     
Net Debt
   $ 805,065     $ 693,011  
     
 
Shareholders’ equity
   $ 2,069,493     $ 1,960,669  
 
Ratio of Total Debt to Capital
     29.7 %     26.9 %
Ratio of Net Debt to Capital (Leverage)
     28.0 %     26.1 %
     
This reconciliation is provided as additional relevant information about Timken’s financial position. Capital is defined as total debt plus shareholder’s equity.
Management believes Net Debt is more indicative of Timken’s financial position, due to the amount of cash and cash equivalents.

 

 

Reconciliation of GAAP net income and EPS — diluted.
This reconciliation is provided as additional relevant information about the company’s performance. Management believes adjusted net income and adjusted earnings per share are more representative of the company’s performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP net income to adjusted net income in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets.
                                 
    First Quarter  
    2008     2007  
(Dollars in thousands, except per share data) (Unaudited)   $     EPS     $     EPS (1)  
 
Net income
   $ 84,465     $ 0.88     $ 75,194     $ 0.79  
 
                                
Pre-tax special items:
                                
Manufacturing rationalization/reorganization expenses — cost of products sold
     1,374       0.01       11,843       0.12  
Manufacturing rationalization/reorganization expenses — SG&A
     808       0.01       1,330       0.01  
(Gain) loss on divestiture
     (8 )     —       354       —  
Impairment and restructuring
     2,876       0.03       13,776       0.15  
Special items — other (income)
     (20,354 )     (0.21 )     (343 )     —  
Provision for income taxes (2)
     9,702       0.10       (38,739 )     (0.41 )
Income from discontinued operations net of income taxes, special items (3)
     —       —       (940 )     (0.01 )
 
                                
     
Adjusted net income
   $ 78,863     $ 0.82     $ 62,475     $ 0.66  
     
 
(1)   EPS amounts will not sum due to rounding differences.
 
(2)   Provision for income taxes includes the tax effect of pre-tax special items on our effective tax rate, as well as the impact of discrete tax items recorded during the quarter.
 
(3)   Discontinued Operations relates to the sale of Latrobe Steel on December 8, 2006.

 

 

Reconciliation of GAAP income from continuing operations and EPS — diluted.
This reconciliation is provided as additional relevant information about the company’s performance. Management believes adjusted income from continuing operations and adjusted earnings per share are more representative of the company’s performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP income from continuing operations to adjusted income from continuing operations in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets.
                                 
            First Quarter        
    2008   2007
(Dollars in thousands, except per share data) (Unaudited)   $   EPS   $   EPS (1)
 
Income from continuing operations
   $ 84,465     $ 0.88     $ 74,254     $ 0.78  
 
Pre-tax special items:
                                
Manufacturing rationalization/reorganization expenses — cost of products sold
    1,374       0.01       11,843       0.12  
Manufacturing rationalization/reorganization expenses — SG&A
     808       0.01       1,330       0.01  
(Gain) loss on divestiture
     (8 )     —       354       —  
Impairment and restructuring
     2,876       0.03       13,776       0.15  
Special items — other (income)
     (20,354 )     (0.21 )     (343 )     —  
Provision for income taxes (2)
     9,702       0.10       (38,739 )     (0.41 )
 
                                
     
Adjusted income from continuing operations
   $ 78,863     $ 0.82     $ 62,475     $ 0.66  
     
 
(1)   EPS amounts will not sum due to rounding differences.
 
(2)   Provision for income taxes includes the tax effect of pre-tax special items on our effective tax rate, as well as the impact of discrete tax items recorded during the quarter.
Reconciliation of Outlook Information.
Expected earnings per diluted share for the 2008 full year and second quarter exclude special items. Examples of such special items include impairment and restructuring, manufacturing rationalization/ reorganization expenses, gain/loss on the sale of non-strategic assets and payments under the CDSOA. It is not possible at this time to identify the potential amount or significance of these special items. Management cannot predict whether the company will receive any additional payments under the CDSOA in 2008 and if so, in what amount.

 

 

Reconciliation of GAAP Income from Continuing Operations before Income Taxes
This reconciliation is provided as additional relevant information about the company’s performance. Management believes Consolidated adjusted earnings before interest and taxes (EBIT) and Total Bearings and Power Transmission Group adjusted EBIT are more representative of the company’s performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP Income from Continuing Operations before Income Taxes to Consolidated adjusted EBIT in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets.
                 
    First Quarter  
    2008     2007  
(Thousands of U.S. dollars) (Unaudited)   $     $  
 
Income from Continuing Operations before Income Taxes
   $ 135,705     $ 67,986  
 
                
Pre-tax reconciling items:
                
Interest expense
     10,998       9,644  
Interest (income)
     (1,398 )     (1,955 )
Manufacturing rationalization/reorganization expenses — cost of products sold
     1,374       11,843  
Manufacturing rationalization/reorganization expenses — SG&A
     808       1,330  
(Gain) loss on divestiture
     (8 )     354  
Impairment and restructuring
     2,876       13,776  
Special items — other (income)
     (20,354 )     (343 )
 
                
     
Consolidated adjusted earnings before interest and taxes (EBIT)
   $ 130,001     $ 102,635  
     
 
                
Steel Group adjusted earnings before interest and taxes (EBIT)
     (53,379 )     (65,526 )
Unallocated corporate expense
     16,425       16,228  
Intergroup eliminations expense (income)
     638       1,124  
     
 
                
Total Bearings and Power Transmission Group
                
adjusted earnings before interest and taxes (EBIT)
   $ 93,685     $ 54,461  
     

 

 

                 
CONDENSED CONSOLIDATED BALANCE SHEET   Mar 31,   Dec 31,
(Dollars in thousands) (Unaudited)   2008   2007
 
ASSETS
                
Cash & cash equivalents
   $ 68,206     $ 30,144  
Accounts receivable
     845,927       748,483  
Inventories
     1,185,498       1,087,712  
Other current assets
     165,307       178,912  
 
Total Current Assets
     2,264,938       2,045,251  
Property, plant & equipment
     1,753,656       1,722,081  
Goodwill
     281,531       271,784  
Other assets
     351,119       340,121  
 
Total Assets
   $ 4,651,244     $ 4,379,237  
 
 
                
LIABILITIES
                
Accounts payable & other liabilities
   $ 519,616     $ 528,052  
Short-term debt
     148,032       142,568  
Income taxes
     60,982       21,787  
Accrued expenses
     198,686       212,015  
 
Total Current Liabilities
     927,316       904,422  
Long-term debt
     725,239       580,587  
Accrued pension cost
     163,590       169,364  
Accrued postretirement benefits cost
     660,850       662,379  
Other non-current liabilities
     104,756       101,816  
 
Total Liabilities
     2,581,751       2,418,568  
 
                
SHAREHOLDERS’ EQUITY
     2,069,493       1,960,669  
 
Total Liabilities and Shareholders’ Equity
   $ 4,651,244     $ 4,379,237  
 

 

 

                 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS   For the three months ended  
    Mar 31,     Mar 31,  
(Dollars in thousands) (Unaudited)   2008     2007  
 
Cash Provided (Used)
                
OPERATING ACTIVITIES
                
Net Income
   $ 84,465     $ 75,194  
Earnings from discontinued operations
     —       (940 )
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     57,475       54,500  
Pension and other postretirement expense
     25,811       32,733  
Pension and other postretirement benefit payments
     (25,867 )     (56,851 )
Accounts receivable
     (71,624 )     (64,776 )
Inventories
     (68,578 )     (17,791 )
Accounts payable and accrued expenses
     (1,973 )     (52,615 )
Other
     (12,620 )     23,904  
     
Net Cash (Used) by Operating Activities — Continuing Operations
     (12,911 )     (6,642 )
Net Cash Provided by Operating Activities — Discontinued Operations
     —       940  
     
Net Cash (Used) by Operating Activities
     (12,911 )     (5,702 )
 
                
INVESTING ACTIVITIES
                
Capital expenditures
     (52,417 )     (60,942 )
Other
     29,175       3,124  
Divestments
     —       —  
Acquisitions
     (55,329 )     (1,523 )
     
Net Cash Used by Investing Activities
     (78,571 )     (59,341 )
 
                
FINANCING ACTIVITIES
                
Cash dividends paid to shareholders
     (16,320 )     (15,152 )
Net proceeds from common share activity
     1,587       11,886  
Net borrowings (payments) on credit facilities
     139,556       66,815  
     
Net Cash Provided by Financing Activities
     124,823       63,549  
 
                
Effect of exchange rate changes on cash
     4,721       1,240  
 
                
Increase (Decrease) in Cash and Cash Equivalents
     38,062       (254 )
Cash and Cash Equivalents at Beginning of Period
     30,144       101,072  
     
 
                
Cash and Cash Equivalents at End of Period
   $ 68,206     $ 100,818