Kennametal (KMT) 8-K Kennametal Reports Strong Third Quarter Results

EXHIBIT 99.1

FISCAL 2005 THIRD QUARTER EARNINGS ANNOUNCEMENT

	FROM:	KENNAMETAL INC.
		P.O. Box 231
		Latrobe, PA 15650
		724-539-6141
		Investor Relations
		Contact: Beth A. Riley
		Media Relations
		Contact: Joy Chandler
	DATE:	April 27, 2005
	FOR RELEASE:	Immediate

KENNAMETAL REPORTS STRONG THIRD QUARTER RESULTS

—   Q3 05 sales up 14 percent

—   Adjusted Earnings per diluted share (EPS) of $0.92, up 39 percent

—   Adjusted EPS outlook for FY05 increased to $3.17 — $3.22

LATROBE, Pa., April 27, 2005- Kennametal Inc. (NYSE: KMT) today reported fiscal 2005 third-quarter adjusted EPS of $0.92 compared with prior year reported EPS of $0.66 and original guidance of $0.80 to $0.85. Third quarter reported EPS of $0.80 includes $0.12 of charges related to the Full Service Supply (FSS) divestiture.

For the first nine months of fiscal 2005, adjusted EPS were $2.26 compared with prior year adjusted EPS of $1.34. Reported EPS for the current period were $2.15 and include special items totaling $0.11 related to the FSS divestiture. Prior year period reported EPS were $1.20 and included special items totaling $0.14.

Kennametal Chairman, President and Chief Executive Officer, Markos I. Tambakeras, said, “Building on the momentum of the first half, we sustained a robust rate of growth on top of the 14 percent growth posted in the third quarter of fiscal 2004. As a result, we delivered the highest quarterly sales and earnings in Kennametal’s history, while continuing to generate strong cash flow. Consistent execution of our strategies through the Kennametal Value Business System supported growth in every geography and nearly every market, despite our modest automotive exposure—representing only 18 percent of sales, less than half of which is in North America. We also continued to proactively improve the growth and profitability profile of our portfolio with the Extrude Hone acquisition and the announced divestiture of the Full Service Supply business.”

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Highlights of the Fiscal 2005 Third Quarter

•   Sales of $597 million up 14 percent versus the same quarter last year, including 12 percent organic sales growth, 3 percent benefit from foreign currency exchange and 2 percent from acquisitions offset by 3 percent from fewer workdays.

•   Reported net income was $31 million versus $24 million, as improved sales volume was leveraged against a more productive operating structure offset by charges related to the FSS divestiture.

•   Net cash flow from operations was $66 million versus $54 million last year. Free operating cash flow was $45 million versus the prior year level of $41 million due primarily to increased operating leverage.

•   Debt to capital decreased to 32 percent versus 37 percent at the end of the prior year quarter, including the impact of the Extrude Hone acquisition.

•   Adjusted Return on Invested Capital improved 290 basis points to 9.1 percent versus 6.2 percent in the prior year.

•   Completed the acquisition of Extrude Hone Corporation for approximately $133.6 million, net of acquired cash and direct acquisition costs.

Highlights of First Nine Months of Fiscal 2005

•   Sales of $1.7 billion up 18 percent on 14 percent organic sales growth, 3 percent benefit from foreign currency exchange and 2 percent from acquisitions offset by 1 percent from fewer workdays.

•   Reported net income was $82 million versus $44 million in the same period last year, reflecting the benefits of increased operating leverage, partially offset by charges related to the FSS divestiture.

•   Net cash flow from operations was $150 million versus $109 million last year. Free operating cash flow totaled $96 million for the nine-month period versus $76 million in last year’s comparable period, due to growth in cash from operations offset by increased capital spending.

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Divestiture

As previously announced, Kennametal Inc. has signed a definitive agreement to sell its FSS business unit. During the quarter ended March 31, 2005, the Company recognized an impairment charge related to FSS goodwill of $5 million and recorded a loss on assets held for sale of $1 million. The impact on EPS was $0.12 during the quarter and $0.11 for the nine-month period.

This transaction is expected to close during Kennametal’s Fiscal 2005 fourth quarter.

Outlook

Tambakeras said, “We are pleased to be on pace for a record year of sales and earnings, and remain steadfastly focused on delivering superior shareowner value.”

Organic sales for the fourth quarter of fiscal 2005 are expected to grow 9 to 11 percent, despite significantly tougher comparisons. Reported EPS is expected to be $0.90 to $0.95. The effective tax rate for the fourth quarter is expected to be approximately 36 percent (this is an increase versus prior expectations of 32 percent). The full year rate is expected to be approximately 33 percent. As stated previously, the execution of our business strategy, as well as the impact of tax planning, will result in fluctuations of the tax rate from quarter to quarter.

Kennametal anticipates net cash flow provided by operating activities of approximately $190 to $215 million, or between 8 and 9 percent of sales, in fiscal 2005. Purchases of property, plant and equipment, net of proceeds from disposals of property, plant and equipment are still expected to be approximately $75 to $80 million. Adjusting net cash flow provided by operating activities for the above items, Kennametal expects to generate between $115 and $130 million of free operating cash flow for fiscal 2005.

Kennametal advises shareowners to note monthly order trends, for which the company makes a disclosure ten business days after the conclusion of each month. This information is available on the Investor Relations section of Kennametal’s corporate web site atwww.kennametal.com.

Dividend Declared
Kennametal also announced its Board of Directors declared a quarterly cash dividend of $0.17 cents per share, payable May 24, 2005, to shareowners of record as of the close of business on May 9, 2005.

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Third quarter results will be discussed in a live Internet broadcast at 10:00 a.m. (Eastern) today. Access the live or archived conference by visiting the Investor Relations section of Kennametal’s corporate web site atwww.kennametal.com.

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the fact they use words such as “should,” “anticipate,” “estimate,” “approximate,” “expect,” “may,” “will,” “project,” “intend,” “plan,” “believe,” and others words of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to relate to, among other things, our goals, plans and projections regarding our financial position, results of operations, market position and product development, which are based on current expectations that involve inherent risks and uncertainties, including factors that could delay, divert or change any of them in the next several years. Although it is not possible to predict or identify all factors, they may include the following: global economic conditions; future terrorist attacks; epidemics; risks associated with integrating and divesting businesses and achieving the expected savings and synergies; demands on management resources; risks associated with international markets such as currency exchange rates, and social and political environments; competition; labor relations; commodity prices; demand for and marketacceptance of new and existing products; and risks associated with the implementation of restructuring plans and environmental remediation matters. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

Kennametal Inc. (NYSE:KMT) is the world’s premier supplier of tooling, engineered components and advanced materials consumed in production processes. The company improves customers’ competitiveness by providing superior economic returns through the delivery of application knowledge and advanced technology to master the toughest of materials application demands. Companies producing everything from airframes to coal, from medical implants to oil wells and from turbochargers to motorcycle parts recognize Kennametal for extraordinary contributions to their value chains. Customers buy over $2.2 billion annually of Kennametal products and services—delivered by our 14,000 talented employees in over 60 countries—with almost 50 percent of these revenues coming from outside the United States. Visit us at www.Kennametal.com.

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FINANCIAL HIGHLIGHTS

Consolidated Statements of Income (Unaudited)

	Quarter Ended				Nine Months Ended
(in thousands, except per share amounts)	March 31,				March 31,
	2005		2004		2005			2004
Sales	$	597,355	$	524,230	$	1,685,009		$	1,429,583
Cost of goods sold(1)		386,094		348,376		1,118,939			961,990
Gross profit		211,261		175,854		566,070			467,593
Operating expense(2)		147,968		132,218		418,430			378,180
Restructuring and asset impairment charges(3)		4,707		—		4,707			3,670
Amortization of intangibles		723		614		1,894			1,570
Operating income		57,863		43,022		141,039			84,173
Interest expense		6,803		6,332		19,380			19,479
Other expense (income), net(4)		28		508		(2,786	)		(2,010	)
Income before provision for income taxes and minority interest		51,032		36,182		124,445			66,704
Provision for income taxes		18,933		11,579		39,540			21,345
Minority interest		1,449		533		3,354			1,632
Net income	$	30,650	$	24,070	$	81,551		$	43,727
Basic earnings per share	$	0.83	$	0.67	$	2.22		$	1.23
Diluted earnings per share	$	0.80	$	0.66	$	2.15		$	1.20
Dividends per share	$	0.17	$	0.17	$	0.51		$	0.51
Basic weighted average shares outstanding		37,093		35,828		36,736			35,589
Diluted weighted average shares outstanding		38,253		36,662		37,935			36,307

1)	For the nine months ended March 31, 2004, these amounts include charges of $0.1 million for integration activities related to the Widia acquisition, $2.9 million related to restructuring programs, and $0.8 million for a pension curtailment.
2)	For the quarter and nine months ended March 31, 2005, these amounts include a loss on assets held for sale of $1.5 million. For the nine months ended March 31, 2004, these amounts include charges of $1.4 million for integration activities related to the Widia acquisition, $1.8 million related to a reserve for a note receivable from a divestiture of a business by Kennametal in 2002, and $0.5 million related to a pension curtailment.
3)	For the quarter and nine months ended March 31, 2005, these amounts include $4.7 million related to a FSS goodwill impairment charge. For the nine months ended March 31, 2004, these amounts include $3.7 million related to restructuring programs.
4)	For the nine months ended March 31, 2004, these amounts include income of $4.4 million related to a gain on the sale of Toshiba Tungaloy investment and a charge of $0.2 million on a reserve for a note receivable from a divestiture of a business by Kennametal in 2002.

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FINANCIAL HIGHLIGHTS (Continued)

In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables also include, where appropriate, a reconciliation of results excluding special items, free operating cash flow, debt to capital, and adjusted return on invested capital (which are non-GAAP measures), to the most directly comparable GAAP measures. Management believes that the investor should have available the same information that management uses to assess operating performance, determine compensation, and assess the capital structure of the Company. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies.

RECONCILIATION TO GAAP – QUARTER ENDED MARCH 31, 2005 (Unaudited)

								Other				Diluted
			Operating			Operating		(Income) /		Net		Earnings
	Gross Profit		Expense			Income		Expense		Income		Per Share
2005 Reported Results	$	211,261	$	147,968		$	57,863	$	28	$	30,650	$	0.80
FSS goodwill impairment charge		—		—			4,707		—		3,306		0.09
Loss on assets held for sale		—		(1,546	)		1,546		—		1,086		0.03
2005 Results, excluding special items	$	211,261	$	146,422		$	64,116	$	28	$	35,042	$	0.92

     Reported EPS for the quarter ended March 31, 2005 of $0.80 is up 21 percent from reported EPS of $0.66 for the quarter ended March 31, 2004. Adjusted EPS for the quarter ended March 31, 2005 of $0.92 is up 39 percent from reported EPS of $0.66 for the quarter ended March 31, 2004.

RECONCILIATION TO GAAP – NINE MONTHS ENDED MARCH 31, 2005 (Unaudited)

								Other					Diluted
			Operating			Operating		(Income) /			Net		Earnings
	Gross Profit		Expense			Income		Expense			Income		Per Share
2005 Reported Results	$	566,070	$	418,430		$	141,039	$	(2,786	)	$	81,551	$	2.15
FSS goodwill impairment charge		—		—			4,707		—			3,277		0.08
Loss on assets held for sale		—		(1,546	)		1,546		—			1,076		0.03
2005 Results, excluding special items	$	566,070	$	416,884		$	147,292	$	(2,786	)	$	85,904	$	2.26

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FINANCIAL HIGHLIGHTS (Continued)

For the quarter ended March 31, 2004, there were no special items.

RECONCILIATION TO GAAP – NINE MONTHS ENDED MARCH 31, 2004 (Unaudited)

								Other						Diluted
			Operating			Operating		(Income) /			Net			Earnings
	Gross Profit		Expense			Income		Expense			Income			Per Share
2004 Reported Results	$	467,593	$	378,180		$	84,173	$	(2,010	)	$	43,727		$	1.20
MSSG restructuring		2,850		—			5,023		—			3,416			0.10
AMSG restructuring		—		—			1,497		—			1,018			0.03
Widia integration costs – MSSG		63		(1,448	)		1,511		—			1,027			0.03
Widia integration costs — AMSG		48		—			48		—			33			—
Pension curtailment		779		(520	)		1,299		—			883			0.02
Gain on Toshiba investment		—		—			—		4,397			(2,990	)		(0.08	)
Note receivable		—		(1,817	)		1,817		(183	)		1,360			0.04
2004 Results, excluding special items	$	471,333	$	374,395		$	95,368	$	2,204		$	48,474		$	1.34

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FINANCIAL HIGHLIGHTS (Continued)

SEGMENT DATA (Unaudited):

	Quarter Ended						Nine Months Ended
	March 31,						March 31,
	2005			2004			2005			2004
Outside Sales:
Metalworking Solutions and Services Group	$	357,197		$	317,506		$	1,009,297		$	872,128
Advanced Materials Solutions Group		135,460			111,464			375,673			299,846
J&L Industrial Supply		67,054			60,074			189,809			158,554
Full Service Supply		37,644			35,186			110,230			99,055
Total Outside Sales	$	597,355		$	524,230		$	1,685,009		$	1,429,583
Sales By Geographic Region:
Within the United States	$	323,484		$	289,506		$	926,791		$	791,151
International		273,871			234,724			758,218			638,432
Total Sales by Geographic Region	$	597,355		$	524,230		$	1,685,009		$	1,429,583
Operating Income (Loss), as reported:
Metalworking Solutions and Services Group	$	53,555		$	36,751		$	135,150		$	82,937
Advanced Materials Solutions Group		22,211			15,146			50,613			36,375
J&L Industrial Supply		7,915			6,419			19,502			13,410
Full Service Supply		(5,036	)		376			(4,370	)		(64	)
Corporate and eliminations(1)		(20,782	)		(15,670	)		(59,856	)		(48,485	)
Total Operating Income, as reported	$	57,863		$	43,022		$	141,039		$	84,173
Operating Income (Loss), excluding special items:
Metalworking Solutions and Services Group	$	53,555		$	36,751		$	135,150		$	89,471
Advanced Materials Solutions Group		22,211			15,146			50,613			37,920
J&L Industrial Supply		7,915			6,419			19,502			13,410
Full Service Supply		1,217			376			1,883			(64	)
Corporate and eliminations(1)		(20,782	)		(15,670	)		(59,856	)		(45,369	)
Total Operating Income, excluding special items	$	64,116		$	43,022		$	147,292		$	95,368

(1) Includes corporate functional shared services and intercompany eliminations.

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FINANCIAL HIGHLIGHTS (Continued)

OPERATING INCOME (LOSS) RECONCILIATION (Unaudited) :

	QUARTER ENDED MARCH 31,
	MSSG		AMSG		J&L		FSS			Corp & Elim			Total
2005 Reported Operating Income (Loss)	$	53,555	$	22,211	$	7,915	$	(5,036	)	$	(20,782	)	$	57,863
FSS goodwill impairment charge		—		—		—		4,707			—			4,707
Loss on assets held for sale		—		—		—		1,546			—			1,546
2005 Operating Income (Loss), excluding special items	$	53,555	$	22,211	$	7,915	$	1,217		$	(20,782	)	$	64,116

	NINE MONTHS ENDED MARCH 31,
	MSSG		AMSG		J&L		FSS			Corp & Elim			Total
2005 Reported Operating Income (Loss)	$	135,150	$	50,613	$	19,502	$	(4,370	)	$	(59,856	)	$	141,039
FSS goodwill impairment charge		—		—		—		4,707			—			4,707
Loss on assets held for sale		—		—		—		1,546			—			1,546
2005 Operating Income (Loss), excluding special items	$	135,150	$	50,613	$	19,502	$	1,883		$	(59,856	)	$	147,292

For the quarter ended March 31, 2004, there were no special items.

	NINE MONTHS ENDED MARCH 31,
	MSSG		AMSG		J&L		FSS			Corp & Elim			Total
2004 Reported Operating Income (Loss)	$	82,937	$	36,375	$	13,410	$	(64	)	$	(48,485	)	$	84,173
Restructuring		5,023		1,497		—		—			—			6,520
Widia integration costs		1,511		48		—		—			—			1,559
Pension curtailment		—		—		—		—			1,299			1,299
Note receivable		—		—		—		—			1,817			1,817
2004 Operating Income (Loss), excluding special items	$	89,471	$	37,920	$	13,410	$	(64	)	$	(45,369	)	$	95,368

RECONCILIATION TO FREE OPERATING CASH FLOW INFORMATION (Unaudited) :

	Quarter Ended						Nine Months Ended
	March 31,						March 31,
	2005			2004			2005			2004
Net income	$	30,650		$	24,070		$	81,551		$	43,727
Other non-cash items		12,332			4,238			16,565			15,457
Depreciation and amortization		16,931			16,913			48,540			48,753
Change in inventory		(8,751	)		(1,969	)		(21,481	)		13,468
Change in accounts receivable		(29,766	)		(26,610	)		(14,774	)		(3,213	)
Change in accounts payable		12,340			18,260			991			9,080
Change in other assets and liabilities		32,569			19,222			38,339			(17,805	)
Net cash flow provided by operating activities		66,305			54,124			149,731			109,467
Purchase of property, plant and equipment		(21,523	)		(14,207	)		(57,292	)		(36,060	)
Proceeds from disposals of property, plant and equipment		579			610			3,912			2,998
Free operating cash flow	$	45,361		$	40,527		$	96,351		$	76,405

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FINANCIAL HIGHLIGHTS (Continued)

CONDENSED BALANCE SHEETS (Unaudited) :

	03/31/05			12/31/04			09/30/04			06/30/04			03/31/04
ASSETS
Cash and equivalents	$	34,792		$	32,168		$	28,688		$	25,940		$	27,528
Trade receivables, net of allowance		382,188			367,940			369,008			364,725			357,795
Receivables securitized		(120,749	)		(115,253	)		(115,309	)		(117,480	)		(108,916	)
Accounts receivable, net		261,439			252,687			253,699			247,245			248,879
Inventories		408,713			421,183			404,478			388,077			387,202
Deferred income taxes		98,063			99,731			96,144			95,240			88,480
Current assets held for sale		50,469			—			—			—			—
Other current assets		32,353			39,605			37,178			40,443			38,803
Total current assets		885,829			845,374			820,187			796,945			790,892
Property, plant and equipment, net		512,806			506,253			487,616			484,475			481,793
Goodwill and intangible assets, net		661,908			543,062			546,487			542,014			554,614
Assets held for sale		2,715			—			—			—			—
Other assets		135,873			133,451			115,733			115,229			57,743
Total	$	2,199,131		$	2,028,140		$	1,970,023		$	1,938,663		$	1,885,042
LIABILITIES
Short-term debt, including notes payable	$	56,225		$	28,888		$	116,446		$	126,807		$	8,193
Accounts payable		142,268			142,465			146,543			148,216			132,246
Current liabilities held for sale		14,437			—			—			—			—
Accrued liabilities		245,534			226,568			217,636			211,504			200,304
Total current liabilities		458,464			397,921			480,625			486,527			340,743
Long-term debt		428,943			376,268			318,989			313,400			486,119
Deferred income taxes		91,088			56,340			65,973			67,426			39,132
Other liabilities		179,786			174,855			162,627			167,926			192,546
Total liabilities		1,158,281			1,005,384			1,028,214			1,035,279			1,058,540
MINORITY INTEREST		19,664			19,249			17,377			16,232			16,598
SHAREOWNERS’ EQUITY		1,021,186			1,003,507			924,432			887,152			809,904
Total	$	2,199,131		$	2,028,140		$	1,970,023		$	1,938,663		$	1,885,042

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FINANCIAL HIGHLIGHTS (Continued)

Debt to Capital Reconciliation (Unaudited):

	March 31,
	2005			2004
Total debt	$	485,168		$	494,312
Total shareowners’ equity		1,021,186			809,904
Debt to equity, GAAP		47.5	%		61.0	%
Total debt	$	485,168		$	494,312
Minority interest		19,664			16,598
Total shareowners’ equity		1,021,186			809,904
Total capital	$	1,526,018		$	1,320,814
Debt to Capital		31.8	%		37.4	%

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FINANCIAL HIGHLIGHTS (Continued)

RETURN ON INVESTED CAPITAL (Unaudited):

For the Period Ended March 31, 2005

	3/31/2005		12/31/2004		9/30/2004		6/30/2004		3/31/2004		Average
Invested Capital
Debt	$	485,168	$	405,156	$	435,435	$	440,207	$	494,312	$	452,056
Accounts receivable securitized		120,749		115,253		115,309		117,480		108,916		115,541
Minority interest		19,664		19,249		17,377		16,232		16,598		17,824
Shareowners’ equity		1,021,186		1,003,507		924,432		887,152		809,904		929,236
Total	$	1,646,767	$	1,543,165	$	1,492,553	$	1,461,071	$	1,429,730	$	1,514,657

					Quarter Ended
	3/31/2005		12/31/2004		9/30/2004		6/30/2004		Total
Interest Expense
Interest expense	$	6,803	$	6,121	$	6,456	$	6,405	$	25,785
Securitization interest		868		757		580		443		2,648
Total interest expense	$	7,671	$	6,878	$	7,036	$	6,848	$	28,433
Income tax benefit										9,099
Total Interest Expense, net of tax									$	19,334

	Quarter Ended
	3/31/2005		12/31/2004		9/30/2004		6/30/2004			Total
Total Income
Net Income, as reported	$	30,650	$	28,181	$	22,720	$	29,852		$	111,403
Restructuring and asset impairment charges		3,306		—		—		—			3,306
Loss on assets held for sale		1,086		—		—		—			1,086
Minority interest expense		1,449		928		977		(36	)		3,318
Total Income, excluding special items	$	36,491	$	29,109	$	23,697	$	29,816		$	119,113
Total Income, excluding special items										$	119,113
Total Interest Expense, net of tax											19,334
										$	138,447
Average invested capital										$	1,514,657
Adjusted Return on Invested Capital											9.1	%
Return on Invested Capital calculated utilizing Net Income, as reported is as follows:
Net Income, as reported										$	111,403
Total Interest Expense, net of tax											19,334
										$	130,737
Average invested capital										$	1,514,657
Return on Invested Capital											8.6	%

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FINANCIAL HIGHLIGHTS (Continued)

RETURN ON INVESTED CAPITAL (Unaudited):

For the Period Ended March 31, 2004

	3/31/2004		12/31/2003		9/30/2003		6/30/2003		3/31/2003		Average
Invested Capital
Debt	$	494,312	$	481,327	$	520,138	$	525,687	$	580,135	$	520,320
Accounts receivable securitized		108,916		101,422		95,318		99,316		93,614		99,717
Minority interest		16,598		16,286		16,089		18,880		18,070		17,185
Shareowners’ equity		809,904		791,442		746,562		721,577		756,511		765,199
Total	$	1,429,730	$	1,390,477	$	1,378,107	$	1,365,460	$	1,448,330	$	1,402,421

					Quarter Ended
	3/31/2004		12/31/2003			9/30/2003		6/30/2003		Total
Interest Expense
Interest expense	$	6,332	$	6,547		$	6,600	$	9,108	$	28,587
Securitization interest		356		483			397		413		1,649
Total interest expense	$	6,688	$	7,030		$	6,997	$	9,521	$	30,236
Income tax benefit											9,676
Total interest expense, net of tax										$	20,560

						Quarter Ended
	3/31/2004		12/31/2003			9/30/2003		6/30/2003			Total
Total Income
Net income, as reported	$	24,070	$	10,892		$	8,764	$	(4,868	)	$	38,858
Minority interest expense		533		404			695		74			1,706
MSSG restructuring		—		1,109			2,307		2,194			5,610
AMSG restructuring		—		1,018			—		857			1,875
Corporate restructuring		—		—			—		(69	)		(69	)
J&L restructuring		—		—			—		(45	)		(45	)
Widia integration costs — MSSG		—		—			1,027		1,758			2,785
Widia integration costs — AMSG		—		—			33		818			851
AMSG electronics impairment		—		—			—		15,269			15,269
Pension curtailment		—		883			—		—			883
Gain on Toshiba investment		—		(2,990	)		—		—			(2,990	)
Note receivable		—		1,360			—		—			1,360
Total Income, excluding special items	$	24,603	$	12,676		$	12,826	$	15,988		$	66,093
Total Income, excluding special items											$	66,093
Total Interest Expense, net of tax												20,560
											$	86,653
Average invested capital											$	1,402,421
Adjusted Return on Invested Capital												6.2	%
Return on Invested Capital calculated utilizing Net Income, as reported is as follows:
Net Income, as reported											$	38,858
Total Interest Expense, net of tax												20,560
											$	59,418
Average invested capital											$	1,402,421
Return on Invested Capital												4.2	%

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