Exhibit 99.1
WALTER INDUSTRIES ANNOUNCES FOURTH QUARTER AND FULL-YEAR 2006 RESULTS
- Fourth Quarter Earnings of $0.69 per Diluted Share; $0.55 from Continuing
Operations -
- Full-Year Earnings of $3.87 per Diluted Share; $2.86 from Continuing
Operations -
- Natural Resources Reports Solid Fourth Quarter Coal Production -
- Board of Directors Announces 25 Percent Increase in Quarterly Dividend to
$0.05 per Share -
TAMPA, Fla., Feb. 7 /PRNewswire-FirstCall/ -- Walter Industries, Inc. (NYSE:
WLT) today reported net income of $35.9 million, or $0.69 per diluted share for
the fourth quarter ended Dec. 31, 2006 and $198.4 million, or $3.87 per diluted
share for the full year 2006. Income from continuing operations for the fourth
quarter, excluding earnings of Mueller Water Products, which was spun off in
December 2006, totaled $28.4 million, or $0.55 per diluted share, compared with
a loss from continuing operations of $29.4 million, or $0.75 per share in the
fourth quarter last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020429/FLM010LOGO-c)
Full-year income from continuing operations in 2006 totaled $145.6 million, or
$2.86 per diluted share compared with $34.4 million, or $0.78 per diluted share
in 2005. Prior-year results for the fourth quarter and full-year included a
pre-tax goodwill impairment charge at Homebuilding of $63.2 million.
"Walter Industries accomplished significant strategic actions in 2006, including
the initial public offering and spin-off of Mueller Water Products," said Walter
Industries Chairman Michael T. Tokarz. "With these key initiatives now
successfully completed, we are well positioned to continue our value creation
strategy."
Separately, the Company's Board of Directors announced a 25 percent increase in
the Company's regular quarterly dividend, from $0.04 to $0.05 per share, payable
on March 16, 2007 to shareholders of record at the close of business on Feb. 20,
2007.
"The Board views this dividend increase as a reflection of our confidence in the
Company's future prospects," Tokarz added.
Fourth Quarter 2006 Financial Results
Net sales and revenues from continuing operations for the fourth quarter totaled
$316.8 million, down from $324.9 million in the prior-year period. Revenues at
Natural Resources were $17.3 million lower versus the prior-year period, driven
by reduced coal sales volumes. As previously reported, lower volumes resulted
from delays in shipments originally scheduled for December 2006, as well as low
inventory levels entering the fourth quarter. These negative impacts were
partially offset by revenue growth of 9.8 percent in the Financing and
Homebuilding group, principally as a result of higher unit completions and
increased home selling prices.
Operating income from continuing operations for the fourth quarter totaled $73.7
million compared to an operating loss of $3.2 million in the fourth quarter
2005. Results in the current-year period include income of $23.4 million related
to the settlement of an insurance claim associated with the 2005 water ingress
problem at Mine No. 5, a $4.1 million reduction in employee post-retirement
benefits expense and $2.9 million in incremental stock compensation expense at
Financing and Homebuilding, as well as a $3.4 million property impairment charge
at Homebuilding's modular division. Operating income in the prior year reflected
a goodwill impairment charge of $63.2 million at Homebuilding. Excluding these
unusual items, operating income from continuing operations declined $7.5
million, primarily driven by the lower coal sales volumes, partially offset by
operating improvements at Homebuilding.
Jim Walter Resources Chief Executive Officer George R. Richmond said, "I am
pleased with our operating performance in the fourth quarter, despite some
delays in metallurgical coal shipments. Our mining operation delivered solid
results at Mine Nos. 4 and 7, and we completed production at Mine No. 5 as
planned in December 2006. Even with this mine closure, our total monthly
production improved sequentially throughout the quarter and these production
improvements have continued through January 2007."
Full Year 2006 Financial Results
Net sales and revenues from continuing operations for the full year 2006
increased 15.1 percent versus the prior year. The significant increase in
revenues stemmed primarily from higher pricing at Natural Resources as well as
increased pricing and volumes at Homebuilding.
Operating income from continuing operations for the full year 2006 was $269.8
million, versus $94.5 million in the prior year. Excluding the insurance claim
income of $23.4 million and the $63.2 million goodwill impairment charge in
2005, operating income increased approximately 56 percent. The improvement was
primarily driven by higher metallurgical coal pricing at Natural Resources, plus
increased on-your-lot completions and reduced operating expenses at
Homebuilding.
Fourth Quarter Results by Operating Group
Natural Resources & Sloss
Natural Resources, which include the operations of Jim Walter Resources and
Kodiak Mining, reported revenues of $153.0 million in the fourth quarter, down
$17.3 million versus the same period last year. This reduction was primarily due
to lower coal sales volumes and natural gas prices, partially offset by the Mine
No. 5 insurance settlement recorded as miscellaneous revenue, as well as higher
average coal prices. These higher average prices reflect a change in sales mix
from a combination of metallurgical and steam coal sold in the prior-year period
to 100 percent metallurgical coal sales in the current-year period.
Natural Resources sold 1.1 million tons of metallurgical coal during the quarter
at an average price of $101.59 per short ton FOB port, compared to 1.2 million
tons of metallurgical coal at an average price of $113.59 per ton and 273,000
tons of steam coal at $34.84 per ton during the same period last year. Shipments
equating to approximately 180,000 tons originally scheduled for delivery in
December 2006 were delayed until the first quarter 2007.
Jim Walter Resources produced 1.4 million tons for the quarter, a 25.0 percent
increase over the prior-year period. In the fourth quarter 2005, production at
Mine No. 7 was negatively impacted by unfavorable geologic conditions. Fourth
quarter 2006 production improved 17.9 percent sequentially versus the third
quarter 2006, as longwall advance rates at Mine No. 4 returned to normal levels
as expected. Average coal production costs per ton improved 14.5 percent
compared to the prior year and 15.6 percent versus the third quarter 2006,
primarily due to positive impacts from higher volumes. Mine No. 5, which
contributed 152,000 tons during the fourth quarter 2006, closed in December as
planned.
The natural gas operation sold 1.9 billion cubic feet of gas at an average price
of $8.44 per thousand cubic feet in the fourth quarter 2006, versus 1.7 billion
cubic feet of gas at $10.54 per thousand cubic feet in the prior-year period.
Natural gas prices realized in the current-year period include the benefit of
hedging approximately 56 percent of production at an average price of $10.05 per
thousand cubic feet, compared with approximately 65 percent of production hedged
in the prior year at an average of $9.10. Spot prices in the current-year period
averaged $6.46 per thousand cubic feet versus $12.72 in the prior-year period.
Natural Resources reported operating income of $63.7 million in the fourth
quarter, compared to $51.7 million in the prior-year period. Operating income in
the current-year period includes income of $23.4 million from the previously
mentioned insurance settlement, as well as higher average coal prices. These
positive impacts were partially offset by lower coal sales volumes and lower gas
prices. Results for the current-year period also reflect lower idle mine charges
and slightly improved production costs versus the prior-year period.
Sloss Industries, which is now reported as a separate segment, generated fourth
quarter revenues of $30.4 million, down $2.7 million from the prior- year period
due to lower furnace coke sales volumes and a reduction in revenues associated
with the sale of its chemicals division in November 2006. Operating income for
the quarter totaled $2.5 million, down $1.6 million from the prior-year period,
primarily reflecting lower volumes.
Financing & Homebuilding
The Financing and Homebuilding group reported combined revenues of $131.5
million for the fourth quarter 2006, compared to $119.8 million in the prior-
year period. The increase of $11.7 million versus the prior-year period was
primarily due to an 11.2 percent increase in on-your-lot home completions and a
21.4 percent increase in average on-your-lot selling prices.
The Financing and Homebuilding group's combined operating income was $8.0
million for the quarter, compared to an operating loss of $54.2 million in last
year's fourth quarter. Results for the fourth quarter 2005 included a goodwill
impairment charge of $63.2 million at Homebuilding, while results in the
current-year period include a $4.1 million reduction in post-retirement benefits
expense, a $3.4 million property impairment charge at the segment's modular home
manufacturing business, and $2.9 million in incremental stock compensation
expense. Excluding these unusual items, operating income in the current-year
period increased 13.7 percent versus the prior-year period, due to higher
on-your-lot completions, higher average net selling prices and improved gross
margins, partially offset by higher interest costs and lower prepayment income
on the mortgage portfolio.
On-your-lot completions in the fourth quarter 2006 increased 72 units,
reflecting improvements in contractor availability, and average net selling
prices at Homebuilding increased 21.4 percent to $97,700. Modular home shipments
in the current quarter declined 148 units, reflecting the discontinued
production of certain low-margin products. The Company said today that it will
exit the internal manufacture of its modular homes product line since sufficient
capacity is available in the industry.
Financing continued its strong financial performance in the fourth quarter and
full year despite lower prepayment income and higher stock compensation expense.
At Dec. 31, 2006, delinquencies on the mortgage portfolio (the percentage of
amounts outstanding more than 30 days past due) were 4.4 percent, an improvement
from 5.2 percent at Dec. 31, 2005.
Other
Results in the "Other" segment, which includes the Company's corporate expenses
and land subsidiaries, improved $3.7 million versus the same period last year,
reflecting lower corporate expenses in the current-year period aided by lower
employee and benefit-related costs, as well as lower legal expenses.
Interest expense for the fourth quarter declined $4.1 million versus the same
period in 2005, reflecting significantly lower corporate debt. Results for the
current quarter also reflect debt conversion expenses of $17.8 million,
representing previously announced inducement premiums and other costs related to
the conversion of $147.6 million of Senior Subordinated Convertible Notes to
equity.
Income tax expense for the fourth quarter reflects the non-deductibility of the
debt conversion expenses. The effective tax rate for the full-year 2006 of 31.9
percent reflects the benefit of percentage depletion, partially offset by the
effect of non-deductible debt conversion expense.
Conference Call Web cast
Members of the Company's leadership team will discuss Walter Industries' fourth
quarter results and other general business matters during a conference call and
live Web cast to be held on Thursday, Feb. 8, 2007, at 10 a.m. Eastern Standard
Time. To listen to the event live or in archive, visit the Company Web site at
www.walterind.com.
About Walter Industries
Walter Industries, Inc. is a diversified company with consolidated
annual revenues of approximately $1.3 billion. The Company is a
significant producer of high-quality metallurgical coal and natural gas
for worldwide markets and is a leader in financing and affordable
homebuilding. The Company employs approximately 2,800 people. For more
information about Walter Industries, please visit the Company Web site
at www.walterind.com.
Safe Harbor Statement
Except for historical information contained herein, the statements in this
release are forward-looking and made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties that may cause the Company's
actual results in future periods to differ materially from forecasted results.
Those risks include, among others, changes in customers' demand for the
Company's products, changes in raw material, labor, equipment and transportation
costs and availability, geologic and weather conditions, changes in extraction
costs and pricing in the Company's mining operations, changes in customer
orders, pricing actions by the Company's competitors, changes in law, potential
changes in the mortgage-backed capital markets, and general changes in economic
conditions. Those risks also include the timing of and ability to execute any
strategic actions that may be pursued. Risks associated with forward-looking
statements are more fully described in the Company's filings with the Securities
and Exchange Commission. The Company assumes no duty to update its
forward-looking statements as of any future date.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in Thousands)
Unaudited
For the three months
ended December 31,
----------------------------
2006 2005
------------ ------------
Net sales and revenues:
Net sales $ 232,993 $ 269,067
Interest income on instalment notes 48,758 49,002
Miscellaneous (1) 35,076 6,878
316,827 324,947
Cost and expenses:
Cost of sales (exclusive of depreciation) 158,578 184,693
Depreciation 10,532 8,314
Selling, general and administrative 36,606 36,322
Provision for losses on instalment notes 2,301 2,514
Postretirement benefits 318 3,600
Interest expense - mortgage-
backed/asset-backed notes 30,344 29,422
Interest expense - other debt 8,239 12,360
Amortization of intangibles 506 818
Restructuring and impairment charges 3,913 868
Debt conversion expense (2) 17,789 -
Impairment of goodwill - 63,210
Credit for estimated hurricane
insurance losses - (1,600)
269,126 340,521
Income (loss) from continuing operations
before income tax expense 47,701 (15,574)
Income tax expense (3) (19,266) (13,824)
Income (loss) from continuing operations 28,435 (29,398)
Discontinued operations, net of
income taxes (4) 7,429 (43,999)
Net income (loss) $ 35,864 $ (73,397)
Basic income (loss) per share:
Income (loss) from continuing operations $ 0.60 $ (0.75)
Discontinued operations 0.15 (1.13)
Net income (loss) $ 0.75 $ (1.88)
Weighted average number of shares
outstanding 47,736,741 38,982,151
Diluted income (loss) per share:
Income (loss) from continuing
operations $ 0.55 $ (0.75)
Discontinued operations 0.14 (1.13)
Net income (loss) $ 0.69 $ (1.88)
Weighted average number of diluted
securities (5) 52,464,828 38,982,151
(1) The 2006 amount includes $23.4 million related to the settlement of an
insurance claim for a water intrusion incident at Mine No. 5 that occurred in
May 2005.
(2) Inducement costs paid related to the conversion of Senior Subordinated
Convertible Notes into common stock.
(3) In 2006, a tax benefit has not been provided for $17.8 million of
non-deductible debt conversion expense. In 2005, a tax benefit of only $0.5
million has been provided for the $63.2 million goodwill impairment charge,
which is largely non-deductible.
(4) The 2006 and 2005 amounts primarily represent the results of operations of
the Company's Water Products business which was spun-off in December 2006.
(5) Weighted average basic shares outstanding was used in the 2005 quarter
period, as the use of fully diluted shares would have had an anti-dilutive
effect.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
RESULTS BY OPERATING SEGMENT
($ in Thousands)
Unaudited
For the three months
ended December 31,
----------------------------
2006 2005
------------ ------------
NET SALES AND REVENUES:
Natural Resources $ 152,996 $ 170,253
Sloss 30,422 33,115
Natural Resources and Sloss 183,418 203,368
Financing 53,126 54,836
Homebuilding 78,420 65,006
Financing and Homebuilding Group 131,546 119,842
Other 4,865 3,708
Consolidating Eliminations (3,002) (1,971)
$ 316,827 $ 324,947
OPERATING INCOME (LOSS):
Natural Resources $ 63,675 $ 51,694
Sloss 2,541 4,172
Natural Resources and Sloss 66,216 55,866
Financing 13,411 16,696
Homebuilding (1) (5,367) (70,884)
Financing and Homebuilding Group 8,044 (54,188)
Other (530) (4,212)
Consolidating Eliminations (1) (680)
Operating income 73,729 (3,214)
Other debt interest and conversion
expense (26,028) (12,360)
Income from continuing operations
before income tax expense $ 47,701 $ (15,574)
(1) Operating income includes a $3.4 million property impairment charge and a
$63.2 million goodwill impairment charge in 2006 and 2005, respectively.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in Thousands)
Unaudited
For the years
ended December 31,
---------------------------
2006 2005
------------ ------------
Net sales and revenues:
Net sales $ 1,046,711 $ 908,697
Interest income on instalment notes 199,659 206,582
Miscellaneous (1) 63,486 22,763
1,309,856 1,138,042
Cost and expenses:
Cost of sales (exclusive of depreciation) 703,539 632,811
Depreciation 39,017 31,976
Selling, general and administrative 149,762 154,526
Provision for losses on instalment notes 9,062 10,724
Postretirement benefits 13,537 14,401
Interest expense - mortgage-
backed/asset-backed notes 118,743 122,005
Interest expense - other debt 38,014 23,400
Amortization of intangibles 2,405 3,641
Restructuring and impairment charges 5,048 235
Debt conversion expense (2) 19,370 -
Impairment of goodwill - 63,210
Provision (credit) for estimated
hurricane insurance losses (1,046) 10,044
1,097,451 1,066,973
Income from continuing operations before
income tax expense and minority interest 212,405 71,069
Income tax expense (3) (67,821) (36,718)
Income from continuing operations
before minority interest 144,584 34,351
Minority interest in net loss of
affiliates (1,000) -
Income from continuing operations 145,584 34,351
Discontinued operations, net of
income taxes (4) 52,785 (27,305)
Net income $ 198,369 $ 7,046
Basic income per share:
Income from continuing operations $ 3.31 $ 0.89
Discontinued operations 1.20 (0.71)
Net income $ 4.51 $ 0.18
Weighted average number of shares
outstanding 44,029,837 38,484,675
Diluted income per share:
Income from continuing operations $ 2.86 $ 0.78
Discontinued operations 1.01 (0.55)
Net income $ 3.87 $ 0.23
Weighted average number of diluted
securities 52,077,356 49,209,176
(1) The 2006 amount includes $23.4 million related to the settlement of an
insurance claim for a water intrusion incident at Mine No. 5 that occurred in
May 2005.
(2) Inducement costs paid related to the conversion of Senior Subordinated
Convertible Notes into common stock.
(3) In 2006, a tax benefit has not been provided for $19.4 million of
non-deductible debt conversion expense. In 2005, a tax benefit of only $0.5
million has been provided for the $63.2 million goodwill impairment charge,
which is largely non-deductible.
(4) The 2006 and 2005 amounts primarily represent the results of operations of
the Company's Water Products business which was spun-off in December 2006. Also
in 2006, the Company wrote down the receivable resulting from the 2003 sale of
its AIMCOR subsidiary to net realizable value.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
RESULTS BY OPERATING SEGMENT
($ in Thousands)
Unaudited
For the years
ended December 31,
---------------------------
2006 2005
------------ ------------
NET SALES AND REVENUES:
Natural Resources $ 679,580 $ 548,577
Sloss 133,033 129,035
Natural Resources and Sloss 812,613 677,612
Financing 219,551 229,156
Homebuilding 275,841 226,796
Financing and Homebuilding Group 495,392 455,952
Other 15,087 12,354
Consolidating Eliminations (13,236) (7,876)
$ 1,309,856 $ 1,138,042
OPERATING INCOME (LOSS):
Natural Resources $ 246,345 $ 164,103
Sloss 8,071 11,442
Natural Resources and Sloss 254,416 175,545
Financing 53,987 46,019
Homebuilding (1) (22,115) (103,881)
Financing and Homebuilding Group 31,872 (57,862)
Other (15,852) (20,500)
Consolidating Eliminations (647) (2,714)
Operating income 269,789 94,469
Other debt interest and conversion
expense (57,384) (23,400)
Income from continuing operations
before income tax expense and
minority interest $ 212,405 $ 71,069
(1) Operating income includes a $3.4 million property impairment charge and a
$63.2 million goodwill impairment charge in 2006 and 2005, respectively.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
For the three months For the years
ended December 31, ended December 31,
--------------------------- ---------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Operating Data:
Jim Walter Resources
Tons sold by type (in thousands):
Metallurgical coal, contracts 1,068 1,218 5,234 4,356
Metallurgical coal, spot sales - - - 144
Purchased metallurgical coal 28 - 84 -
Steam coal - 273 300 1,404
1,096 1,491 5,618 5,904
Average sale price per ton:
Metallurgical coal, contracts $ 101.59 $ 113.59 $ 107.45 $ 96.56
Metallurgical coal, spot sales $ - $ - $ - $ 113.08
Steam coal $ - $ 34.84 $ 35.02 $ 35.02
Total $ 101.59 $ 99.18 $ 103.58 $ 82.33
Tons sold by mine (in thousands):
Mine No. 4 362 754 2,224 2,961
Mine No. 7 532 578 2,506 2,139
Mine No. 5 174 159 804 804
1,068 1,491 5,534 5,904
Coal cost of sales (exclusive of depreciation):
Mine No. 4 per ton $ 60.34 $ 47.40 $ 59.89 $ 40.29
Mine No. 7 per ton $ 54.36 $ 73.20 $ 53.68 $ 56.08
Mine No. 5 per ton $ 67.94 $ 66.59 $ 70.56 $ 53.64
Total $ 58.60 $ 59.46 $ 58.62 $ 47.83
Idle mine costs
($ in thousands) (1) $ 667 $ 5,763 $ 1,249 $ 21,896
Other costs ($ in thousands) (2) $ 3,452 $ 4,590 $ 17,802 $ 8,581
Tons of coal produced (in thousands)
Mine No. 4 648 695 2,187 3,039
Mine No. 7 577 245 2,558 2,039
Mine No. 5 152 162 806 657
1,377 1,102 5,551 5,735
Coal production costs per ton: (3)
Mine No. 4 $ 39.89 $ 36.07 $ 45.14 $ 31.71
Mine No. 7 $ 43.75 $ 90.04 $ 40.12 $ 43.77
Mine No. 5 $ 58.95 $ 56.07 $ 56.64 $ 53.27
Total $ 43.61 $ 51.00 $ 44.50 $ 38.47
Natural gas sales, in mmcf
(in thousands) 1,933 1,696 7,712 6,937
Natural gas average sale price per
mmcf $ 8.44 $ 10.54 $ 8.67 $ 7.95
Natural gas cost of sales per mmcf $ 2.54 $ 3.65 $ 2.69 $ 2.89
(1) Idle mine costs are charged to period expense when incurred.
(2) Consists of charges (credits) not directly allocable to a specific mine and
cost related to purchased coal.
(3) Coal production costs per ton are a component of inventoriable costs,
including depreciation. Other costs of sales not included in coal production
costs per ton include Company-paid outbound freight, postretirement benefits,
asset retirement obligation expenses, royalties and Black Lung excise taxes.
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
Unaudited
For the three months For the years
ended December 31, ended December 31,
--------------------------- ---------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Operating Data (continued):
Sloss Industries
Furnace and foundry coke
tons sold 93,559 106,681 399,321 398,537
Furnace and foundry coke average
sale price per ton $ 221.36 $ 221.92 $ 222.04 $ 225.13
Fiber tons sold 22,899 19,496 101,012 85,661
Fiber price per ton $ 266.38 $ 239.52 $ 264.47 $ 240.24
Financing
Delinquencies 4.4% 5.2% 4.4% 5.2%
Prepayment speeds 9.9% 10.5% 10.0% 10.7%
Homebuilding
New sales contracts 698 807 3,049 4,042
Cancellations 130 274 646 843
Unit completions 789 865 3,047 3,022
Average sale price $ 97,700 $ 75,000 $ 90,000 $ 74,700
Ending homes backlog 1,534 2,178 1,534 2,178
Depreciation ($ in thousands):
Natural Resources $ 7,455 $ 5,504 $ 27,004 $ 20,855
Sloss 896 908 3,623 3,859
Financing 356 347 1,387 1,403
Homebuilding 1,405 1,321 5,385 4,966
Other 420 234 1,618 893
$ 10,532 $ 8,314 $ 39,017 $ 31,976
Restructuring and impairment charges (credits)
($ in thousands):
Mine No. 5 shutdown costs $ - $ 15 $ - $ (618)
Mine No. 7 longwall shield
impairment - 853 - 853
Sloss chemical business asset
impairment 504 - 1,639 -
Homebuilding goodwill impairment - 63,210 - 63,210
Homebuilding property impairment 3,409 - 3,409 -
$ 3,913 $ 64,078 $ 5,048 $ 63,445
Capital expenditures ($ in
thousands):
Natural Resources $ 20,722 $ 29,913 $ 86,305 $ 94,301
Sloss 2,060 1,697 7,761 7,314
Financing 74 52 295 206
Homebuilding 1,481 3,054 5,669 8,921
Other 354 1,427 1,025 3,776
$ 24,691 $ 36,143 $ 101,055 $ 114,518
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in Thousands)
Unaudited
December 31,
---------------------------
2006 2005
------------ ------------
ASSETS
Cash and cash equivalents $ 127,370 $ 64,436
Short-term investments, restricted 90,042 124,573
Instalment notes receivable, net of
allowance of $13,011 and
$12,489, respectively 1,779,697 1,693,922
Receivables, net 88,643 74,610
Inventories 108,871 122,146
Prepaid expenses 30,146 21,460
Property, plant and equipment, net 311,189 258,502
Other long-term assets 130,839 113,163
Identifiable intangibles, net 6,423 8,828
Goodwill 10,895 10,895
Assets of discontinued operations - 2,911,369
$ 2,684,115 $ 5,403,904
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable $ 62,706 $ 53,355
Accrued expenses 96,552 95,221
Deferred income taxes 3,379 -
Debt:
Mortgage-backed/asset-backed notes 1,736,706 1,727,329
Other debt 249,491 623,875
Accrued interest 17,053 20,397
Accumulated postretirement benefits
obligation 330,241 225,241
Other long-term liabilities 186,079 182,664
Liabilities of discontinued
operations - 2,187,206
Total liabilities 2,682,207 5,115,288
Stockholders' equity 1,908 288,616
$ 2,684,115 $ 5,403,904
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2006
($ in Thousands)
Unaudited
Capital in
Common Excess of Comprehensive
Total Stock Par Value Income
------------ ------------ ------------ -------------
Balance at December 31, 2005 $ 288,616 $ 598 $ 1,210,751
Adjustment to initially apply SAB
No. 108 5,069
Adjusted balance at December 31, 2005 $ 293,685 $ 598 $ 1,210,751
Comprehensive income:
Net income 198,369 $ 198,369
Other comprehensive income, net of tax:
Decrease in additional minimum
pension liability 703 703
Cumulative foreign currency
translation adjustment 1,053 1,053
Net unrealized gain on hedges 4,113 4,113
Comprehensive income $ 204,238
Adjustment to initially apply FASB
Statement No. 158 (74,513)
Sale of common stock 168,680 26 168,654
Stock issued upon conversion of
convertible notes 176,108 98 176,010
Gain on sale of investment in
Mueller Water Products, Inc.
through initial public offering 132,048 125,088
Stock dividend for spin-off of
Mueller Water Products, Inc. (919,933) (944,393)
Stock issued upon exercise of
stock options 4,735 6 4,729
Tax benefit on the exercise of
stock options 8,310 8,310
Dividends paid, $0.16 per share (6,825) (6,825)
Stock-based compensation 15,375 15,375
Balance at December 31, 2006 $ 1,908 $ 728 $ 757,699
WALTER INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2006
($ in Thousands)
Unaudited
Accumulated
Other
Accumulated Treasury Comprehensive
Deficit Stock Income (Loss)
------------ ------------ -------------
Balance at December 31, 2005 $ (602,002) $ (259,317) $ (61,414)
Adjustment to initially apply SAB
No. 108 5,069
Adjusted balance at December 31, 2005 $ (596,933) $ (259,317) $ (61,414)
Comprehensive income:
Net income 198,369
Other comprehensive income, net of tax:
Decrease in additional minimum
pension liability 703
Cumulative foreign currency
translation adjustment 1,053
Net unrealized gain on hedges 4,113
Comprehensive income
Adjustment to initially apply FASB
Statement No. 158 (74,513)
Sale of common stock
Stock issued upon conversion of
convertible notes
Gain on sale of investment in
Mueller Water Products, Inc.
through initial public offering 6,960
Stock dividend for spin-off of
Mueller Water Products, Inc. 24,460
Stock issued upon exercise of stock
options
Tax benefit on the exercise of stock
options
Dividends paid, $0.16 per share
Stock-based compensation
Balance at December 31, 2006 $ (398,564) $ (259,317) $ (98,638)
SOURCE Walter Industries, Inc.
-0- 02/07/2007
/CONTACT: Investors, Mark H. Tubb, Vice President - Investor Relations,
+1-813-871-4027, or mtubb@walterind.com, or Media, Michael A. Monahan,
Director - Corporate Communications, +1-813-871-4132, or
mmonahan@walterind.com, both of Walter Industries, Inc./
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/Web site: http://www.walterind.com/
(WLT)