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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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23-0458500
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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P.O. Box 14662
Reading, Pennsylvania
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19610
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer:
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x
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Accelerated filer:
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o
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Non-accelerated filer:
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company:
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o
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September 30,
2016 |
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June 30,
2016 |
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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50.9
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$
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82.0
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Accounts receivable, net
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240.7
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253.6
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Inventories
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661.6
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628.7
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Other current assets
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89.9
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46.4
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Total current assets
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1,043.1
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1,010.7
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Property, plant and equipment, net
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1,338.1
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1,351.4
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Goodwill
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244.8
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244.8
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Other intangibles, net
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61.6
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63.2
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Deferred income taxes
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7.6
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8.2
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Other assets
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118.9
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116.0
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Total assets
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$
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2,814.1
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$
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2,794.3
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LIABILITIES
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Current liabilities:
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Accounts payable
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$
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153.5
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$
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159.6
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Accrued liabilities
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110.8
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139.2
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Total current liabilities
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264.3
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298.8
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Long-term debt
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609.6
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611.3
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Accrued pension liabilities
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501.7
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509.3
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Accrued postretirement benefits
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116.7
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116.6
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Deferred income taxes
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156.8
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102.4
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Other liabilities
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44.1
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51.0
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Total liabilities
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1,693.2
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1,689.4
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Contingencies and commitments (see Note 8)
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STOCKHOLDERS’ EQUITY
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Common stock — authorized 100,000,000 shares; issued 55,266,523 shares at September 30, 2016 and 55,254,569 shares at June 30, 2016; outstanding 46,619,990 shares at September 30, 2016 and 46,600,125 shares at June 30, 2016
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276.3
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276.3
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Capital in excess of par value
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276.4
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273.5
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Reinvested earnings
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1,294.2
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1,308.9
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Common stock in treasury (8,646,533 shares and 8,654,444 shares at September 30, 2016 and June 30, 2016, respectively), at cost
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(343.6
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)
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(343.9
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)
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Accumulated other comprehensive loss
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(382.4
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)
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(409.9
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)
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Total stockholders' equity
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1,120.9
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1,104.9
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Total liabilities and stockholders' equity
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$
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2,814.1
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$
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2,794.3
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Three Months Ended
September 30, |
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2016
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2015
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Net sales
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$
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389.0
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$
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455.6
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Cost of sales
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343.0
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387.0
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Gross profit
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46.0
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68.6
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Selling, general and administrative expenses
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44.6
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43.4
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Restructuring charges
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—
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0.4
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Operating income
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1.4
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24.8
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Interest expense
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(7.3
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)
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(6.6
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)
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Other income (expense), net
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0.6
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(2.1
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)
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(Loss) income before income taxes
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(5.3
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)
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16.1
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Income tax expense
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0.9
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7.2
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Net (loss) income
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$
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(6.2
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$
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8.9
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(LOSS) EARNINGS PER COMMON SHARE:
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Basic
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$
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(0.13
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)
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$
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0.18
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Diluted
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$
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(0.13
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)
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$
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0.18
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
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Basic
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46.9
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49.7
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Diluted
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46.9
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49.9
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Cash dividends per common share
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$
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0.18
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$
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0.18
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Three Months Ended
September 30, |
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2016
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2015
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Net (loss) income
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$
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(6.2
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)
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$
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8.9
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Other comprehensive income (loss), net of tax
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Pension and postretirement benefits, net of tax of $(10.5) and $(2.3), respectively
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17.4
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3.7
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Net gain (loss) on derivative instruments, net of tax of $(6.5) and $3.4, respectively
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10.8
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(5.5
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)
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Foreign currency translation
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(0.7
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)
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(3.3
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)
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Other comprehensive income (loss)
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27.5
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(5.1
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)
|
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Comprehensive income
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$
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21.3
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$
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3.8
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Three Months Ended
September 30, |
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2016
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2015
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||||
OPERATING ACTIVITIES
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Net (loss) income
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$
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(6.2
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)
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$
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8.9
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Adjustments to reconcile net (loss) income to net cash provided from operating activities:
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Depreciation and amortization
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28.9
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29.9
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Deferred income taxes
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37.5
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(1.0
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)
|
||
Net pension expense
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16.8
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13.4
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||
Share-based compensation expense
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3.0
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2.7
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Net loss on disposals of property and equipment
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0.1
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0.1
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|
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Changes in working capital and other:
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Accounts receivable
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13.2
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24.4
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Inventories
|
(33.5
|
)
|
|
(33.0
|
)
|
||
Other current assets
|
(44.6
|
)
|
|
(4.8
|
)
|
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Accounts payable
|
(0.7
|
)
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2.5
|
|
||
Accrued liabilities
|
(10.7
|
)
|
|
(1.6
|
)
|
||
Other postretirement plan contributions
|
(1.4
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)
|
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(3.4
|
)
|
||
Other, net
|
1.5
|
|
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3.4
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|
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Net cash provided from operating activities
|
3.9
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|
41.5
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INVESTING ACTIVITIES
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Purchases of property, equipment and software
|
(26.6
|
)
|
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(29.9
|
)
|
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Other
|
—
|
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4.0
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Net cash used for investing activities
|
(26.6
|
)
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(25.9
|
)
|
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FINANCING ACTIVITIES
|
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Dividends paid
|
(8.5
|
)
|
|
(9.0
|
)
|
||
Purchases of treasury stock
|
—
|
|
|
(45.9
|
)
|
||
Payments on seller financed debt related to purchase of software
|
—
|
|
|
(1.2
|
)
|
||
Proceeds from stock options exercised
|
0.3
|
|
|
0.1
|
|
||
Net cash used for financing activities
|
(8.2
|
)
|
|
(56.0
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(0.2
|
)
|
|
1.0
|
|
||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(31.1
|
)
|
|
(39.4
|
)
|
||
Cash and cash equivalents at beginning of period
|
82.0
|
|
|
70.0
|
|
||
Cash and cash equivalents at end of period
|
$
|
50.9
|
|
|
$
|
30.6
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
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|
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Non-cash investing activities:
|
|
|
|
|
|
||
Acquisition of property, equipment and software
|
$
|
9.6
|
|
|
$
|
10.7
|
|
|
Common Stock
|
|
Reinvested Earnings
|
|
Common Stock in Treasury
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Equity
|
||||||||||||||
|
Par Value Of $5
|
|
Capital in Excess of Par Value
|
|
|
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|
||||||||||||||||
Balances at June 30, 2016
|
$
|
276.3
|
|
|
$
|
273.5
|
|
|
$
|
1,308.9
|
|
|
$
|
(343.9
|
)
|
|
$
|
(409.9
|
)
|
|
$
|
1,104.9
|
|
Net loss
|
|
|
|
|
|
|
(6.2
|
)
|
|
|
|
|
|
|
|
(6.2
|
)
|
||||||
Pension and postretirement benefits gain, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
17.4
|
|
|
17.4
|
|
||||||
Net gain on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
|
|
10.8
|
|
||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||||
Cash Dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
||||||
Common @ $0.18 per share
|
|
|
|
|
|
|
(8.5
|
)
|
|
|
|
|
|
|
|
(8.5
|
)
|
||||||
Share-based compensation plans
|
|
|
|
2.6
|
|
|
|
|
|
0.3
|
|
|
|
|
|
2.9
|
|
||||||
Stock options exercised
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
||||||
Balances at September 30, 2016
|
$
|
276.3
|
|
|
$
|
276.4
|
|
|
$
|
1,294.2
|
|
|
$
|
(343.6
|
)
|
|
$
|
(382.4
|
)
|
|
$
|
1,120.9
|
|
|
Common Stock
|
|
Reinvested Earnings
|
|
Common Stock in Treasury
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total Equity
|
||||||||||||||
|
Par Value Of $5
|
|
Capital in Excess of Par Value
|
|
|
|
|
||||||||||||||||
Balances at June 30, 2015
|
$
|
276.2
|
|
|
$
|
266.6
|
|
|
$
|
1,332.4
|
|
|
$
|
(221.1
|
)
|
|
$
|
(328.2
|
)
|
|
$
|
1,325.9
|
|
Net income
|
|
|
|
|
|
|
8.9
|
|
|
|
|
|
|
|
|
8.9
|
|
||||||
Pension and postretirement benefits gain, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
3.7
|
|
|
3.7
|
|
||||||
Net loss on derivative instruments, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(5.5
|
)
|
|
(5.5
|
)
|
||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
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(3.3
|
)
|
|
(3.3
|
)
|
||||||
Cash Dividends:
|
|
|
|
|
|
|
|
|
|
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|
0
|
|
||||||
Common @ $0.18 per share
|
|
|
|
|
|
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(9.0
|
)
|
|
|
|
|
|
|
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(9.0
|
)
|
||||||
Purchase of treasury stock
|
|
|
|
|
|
|
(45.9
|
)
|
|
|
|
(45.9
|
)
|
||||||||||
Share-based compensation plans
|
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|
2.0
|
|
|
|
|
|
0.4
|
|
|
|
|
|
2.4
|
|
||||||
Stock options exercised
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
||||||
Tax shortfall on share-based compensation
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.1
|
)
|
||||||
Balances at September 30, 2015
|
$
|
276.2
|
|
|
$
|
268.6
|
|
|
$
|
1,332.3
|
|
|
$
|
(266.6
|
)
|
|
$
|
(333.3
|
)
|
|
$
|
1,277.2
|
|
1.
|
Basis of Presentation
|
2.
|
Restructuring and Asset Impairment Charges
|
($ in millions)
|
|
|
||
Reserve balance at June 30, 2015
|
|
$
|
2.3
|
|
Restructuring and asset impairment charges
|
|
18.0
|
|
|
Payments from qualified pension plan associated with restructuring charges
|
|
(9.4
|
)
|
|
Cash payments
|
|
(3.0
|
)
|
|
Non-cash asset impairment charges and other
|
|
(7.6
|
)
|
|
Reserve balance at June 30, 2016
|
|
0.3
|
|
|
Cash payments
|
|
(0.3
|
)
|
|
Reserve balance at September 30, 2016
|
|
$
|
—
|
|
|
|
Three Months Ended
September 30, |
||||||
(in millions, except per share data)
|
|
2016
|
|
2015
|
||||
Net (loss) income
|
|
$
|
(6.2
|
)
|
|
$
|
8.9
|
|
Less: earnings and dividends allocated to participating securities
|
|
—
|
|
|
—
|
|
||
(Loss) earnings available for common stockholders used in calculation of basic (loss) earnings per common share
|
|
$
|
(6.2
|
)
|
|
$
|
8.9
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding, basic
|
|
46.9
|
|
|
49.7
|
|
||
|
|
|
|
|
||||
Basic (loss) earnings per common share
|
|
$
|
(0.13
|
)
|
|
$
|
0.18
|
|
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(6.2
|
)
|
|
$
|
8.9
|
|
Less: earnings and dividends allocated to participating securities
|
|
—
|
|
|
—
|
|
||
(Loss) earnings available for common stockholders used in calculation of diluted (loss) earnings per common share
|
|
$
|
(6.2
|
)
|
|
$
|
8.9
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding, basic
|
|
46.9
|
|
|
49.7
|
|
||
Effect of shares issuable under share-based compensation plans
|
|
—
|
|
|
0.2
|
|
||
Weighted average number of common shares outstanding, diluted
|
|
46.9
|
|
|
49.9
|
|
||
|
|
|
|
|
||||
Diluted (loss) earnings per common share
|
|
$
|
(0.13
|
)
|
|
$
|
0.18
|
|
|
|
Three Months Ended
September 30, |
||||
(in millions)
|
|
2016
|
|
2015
|
||
Stock options
|
|
1.8
|
|
|
1.3
|
|
Restricted stock awards
|
|
0.1
|
|
|
—
|
|
4.
|
Inventories
|
($ in millions)
|
|
September 30,
2016 |
|
June 30,
2016 |
||||
Raw materials and supplies
|
|
$
|
147.8
|
|
|
$
|
137.6
|
|
Work in process
|
|
329.3
|
|
|
298.9
|
|
||
Finished and purchased products
|
|
184.5
|
|
|
192.2
|
|
||
Total inventory
|
|
$
|
661.6
|
|
|
$
|
628.7
|
|
5.
|
Accrued Liabilities
|
($ in millions)
|
|
September 30,
2016 |
|
June 30,
2016 |
||||
Accrued compensation and benefits
|
|
$
|
36.2
|
|
|
$
|
41.8
|
|
Derivative financial instruments
|
|
20.0
|
|
|
31.6
|
|
||
Accrued postretirement benefits
|
|
13.7
|
|
|
13.8
|
|
||
Deferred revenue
|
|
8.9
|
|
|
8.9
|
|
||
Accrued interest expense
|
|
5.6
|
|
|
11.2
|
|
||
Accrued pension liabilities
|
|
4.1
|
|
|
10.1
|
|
||
Accrued income taxes
|
|
0.8
|
|
|
1.5
|
|
||
Other
|
|
21.5
|
|
|
20.3
|
|
||
Total accrued liabilities
|
|
$
|
110.8
|
|
|
$
|
139.2
|
|
6.
|
Pension and Other Postretirement Benefits
|
Three months ended September 30,
|
|
Pension Plans
|
|
Other Postretirement Plans
|
||||||||||||
($ in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
|
$
|
8.2
|
|
|
$
|
7.7
|
|
|
$
|
0.9
|
|
|
$
|
0.8
|
|
Interest cost
|
|
13.1
|
|
|
14.5
|
|
|
2.3
|
|
|
2.5
|
|
||||
Expected return on plan assets
|
|
(15.3
|
)
|
|
(16.4
|
)
|
|
(1.7
|
)
|
|
(1.7
|
)
|
||||
Amortization of net loss
|
|
9.4
|
|
|
6.8
|
|
|
0.8
|
|
|
0.7
|
|
||||
Amortization of prior service cost (benefit)
|
|
0.2
|
|
|
0.1
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||
Curtailment charge
|
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Net periodic benefit costs
|
|
$
|
16.1
|
|
|
$
|
12.7
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
7.
|
Debt
|
($ in millions)
|
|
September 30,
2016 |
|
June 30,
2016 |
||||
Medium-term notes, Series B at 6.97% to 7.10% due from April 2018 to May 2018 (face value of $55.0 million at September 30, 2016 and June 30, 2016)
|
|
$
|
55.0
|
|
|
$
|
55.0
|
|
Senior unsecured notes, 5.20% due July 2021 (face value of $250.0 million at September 30, 2016 and June 30, 2016)
|
|
256.0
|
|
|
257.8
|
|
||
Senior unsecured notes, 4.45% due March 2023 (face value of $300.0 million at September 30, 2016 and June 30, 2016)
|
|
298.6
|
|
|
298.5
|
|
||
Total
|
|
609.6
|
|
|
611.3
|
|
||
Less: amounts due within one year
|
|
—
|
|
|
—
|
|
||
Long-term debt, net of current portion
|
|
$
|
609.6
|
|
|
$
|
611.3
|
|
8.
|
Contingencies and Commitments
|
9.
|
Share Repurchase Program
|
10.
|
Fair Value Measurements
|
September 30, 2016
|
|
Fair Value
Measurements Using
Input Type
|
||
($ in millions)
|
|
Level 2
|
||
Assets:
|
|
|
|
|
Marketable securities
|
|
|
|
|
Municipal auction rate securities
|
|
$
|
4.2
|
|
Derivative financial instruments
|
|
8.9
|
|
|
Total assets
|
|
$
|
13.1
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Derivative financial instruments
|
|
$
|
24.6
|
|
June 30, 2016
|
|
Fair Value
Measurements Using
Input Type
|
||
($ in millions)
|
|
Level 2
|
||
Assets:
|
|
|
|
|
Marketable securities
|
|
|
|
|
Municipal auction rate securities
|
|
$
|
4.1
|
|
Derivative financial instruments
|
|
11.8
|
|
|
Total assets
|
|
$
|
15.9
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Derivative financial instruments
|
|
$
|
43.9
|
|
|
|
September 30, 2016
|
|
June 30, 2016
|
||||||||||||
($ in millions)
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Long-term debt
|
|
$
|
609.6
|
|
|
$
|
614.9
|
|
|
$
|
611.3
|
|
|
$
|
597.7
|
|
Company-owned life insurance
|
|
$
|
14.1
|
|
|
$
|
14.1
|
|
|
$
|
14.0
|
|
|
$
|
14.0
|
|
11
.
|
Derivatives and Hedging Activities
|
September 30, 2016
|
|
Interest
Rate Swaps
|
|
Foreign
Currency
Contracts
|
|
Commodity
Contracts
|
|
Total
Derivatives
|
||||||||
($ in millions)
|
|
|
|
|
||||||||||||
Asset Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets
|
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
1.1
|
|
Other assets
|
|
7.8
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
||||
Total asset derivatives
|
|
$
|
8.2
|
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
8.9
|
|
Liability Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
20.0
|
|
|
$
|
20.1
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
4.5
|
|
||||
Total liability derivatives
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
24.5
|
|
|
$
|
24.6
|
|
June 30, 2016
|
|
Interest
Rate Swaps
|
|
Foreign
Currency
Contracts
|
|
Commodity
Contracts
|
|
Total
Derivatives
|
||||||||
($ in millions)
|
|
|
|
|
||||||||||||
Asset Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets
|
|
$
|
1.2
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
2.1
|
|
Other assets
|
|
9.7
|
|
|
—
|
|
|
—
|
|
|
9.7
|
|
||||
Total asset derivatives
|
|
$
|
10.9
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
11.8
|
|
Liability Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
31.3
|
|
|
$
|
31.6
|
|
Other liabilities
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|
12.3
|
|
||||
Total liability derivatives
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
43.6
|
|
|
$
|
43.9
|
|
|
|
Amount of Gain (Loss)
Recognized in AOCI on Derivatives (Effective Portion) |
||||||
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Derivatives in Cash Flow Hedging Relationship:
|
|
|
|
|
|
|
||
Commodity contracts
|
|
$
|
7.0
|
|
|
$
|
(18.5
|
)
|
Foreign exchange contracts
|
|
—
|
|
|
0.2
|
|
||
Total
|
|
$
|
7.0
|
|
|
$
|
(18.3
|
)
|
($ in millions)
|
|
Location of (Loss) Gain
Reclassified from AOCI into
Income
|
|
Amount of (Loss) Gain
Reclassified from AOCI
into Income
(Effective Portion)
|
|
Amount of Gain
Reclassified from AOCI into Income (Ineffective Portion) |
||||||||||||
|
|
Three Months Ended
September 30, |
|
Three Months Ended
September 30, |
||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||
Derivatives in Cash Flow Hedging Relationship:
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(10.1
|
)
|
|
$
|
(9.3
|
)
|
|
$
|
0.5
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
Net sales
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||
Forward interest rate swaps
|
|
Interest expense
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
(9.9
|
)
|
|
$
|
(9.3
|
)
|
|
$
|
0.5
|
|
|
$
|
—
|
|
12.
|
Other Income (Expense), Net
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Foreign exchange
|
|
$
|
—
|
|
|
$
|
(1.2
|
)
|
Unrealized gains (losses) on company-owned life insurance contracts and investments held in rabbi trusts
|
|
0.5
|
|
|
(1.2
|
)
|
||
Equity in earnings of unconsolidated subsidiaries
|
|
—
|
|
|
0.3
|
|
||
Interest Income
|
|
0.1
|
|
|
—
|
|
||
Total other income (expense), net
|
|
$
|
0.6
|
|
|
$
|
(2.1
|
)
|
13.
|
Income Taxes
|
14.
|
Business Segments
|
Segment Data
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Net Sales:
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
315.1
|
|
|
$
|
372.6
|
|
Performance Engineered Products
|
|
78.5
|
|
|
91.5
|
|
||
Intersegment
|
|
(4.6
|
)
|
|
(8.5
|
)
|
||
Consolidated net sales
|
|
$
|
389.0
|
|
|
$
|
455.6
|
|
Segment Data
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Operating Income (Loss):
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
25.0
|
|
|
$
|
41.1
|
|
Performance Engineered Products
|
|
(2.8
|
)
|
|
(0.4
|
)
|
||
Corporate costs
|
|
(13.8
|
)
|
|
(12.0
|
)
|
||
Pension earnings, interest and deferrals
|
|
(7.1
|
)
|
|
(4.8
|
)
|
||
Intersegment
|
|
0.1
|
|
|
0.9
|
|
||
Consolidated operating income
|
|
$
|
1.4
|
|
|
$
|
24.8
|
|
Segment Data
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Depreciation and Amortization:
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
23.4
|
|
|
$
|
23.5
|
|
Performance Engineered Products
|
|
5.1
|
|
|
5.7
|
|
||
Corporate
|
|
0.8
|
|
|
0.9
|
|
||
Intersegment
|
|
(0.4
|
)
|
|
(0.2
|
)
|
||
Consolidated depreciation and amortization
|
|
$
|
28.9
|
|
|
$
|
29.9
|
|
Segment Data
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Capital Expenditures:
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
14.7
|
|
|
$
|
19.7
|
|
Performance Engineered Products
|
|
4.5
|
|
|
9.1
|
|
||
Corporate
|
|
7.5
|
|
|
1.1
|
|
||
Intersegment
|
|
(0.1
|
)
|
|
—
|
|
||
Consolidated capital expenditures
|
|
$
|
26.6
|
|
|
$
|
29.9
|
|
Segment Data
|
|
September 30,
2016 |
|
June 30,
2016 |
||||
($ in millions)
|
|
|
||||||
Total Assets:
|
|
|
|
|
|
|
||
Specialty Alloys Operations
|
|
$
|
2,254.0
|
|
|
$
|
2,256.5
|
|
Performance Engineered Products
|
|
415.4
|
|
|
415.8
|
|
||
Corporate
|
|
166.0
|
|
|
151.3
|
|
||
Intersegment
|
|
(21.3
|
)
|
|
(29.3
|
)
|
||
Consolidated total assets
|
|
$
|
2,814.1
|
|
|
$
|
2,794.3
|
|
15.
|
Recent Accounting Pronouncements
|
Three Months Ended September 30, 2016 ($ in millions) (a) |
|
Cash flow
hedging items
|
|
Pension and
other
postretirement
benefit plan
items
|
|
Unrealized
losses on
available-for-
sale securities
|
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at June 30, 2016
|
|
$
|
(21.8
|
)
|
|
$
|
(344.3
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(43.5
|
)
|
|
$
|
(409.9
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
4.4
|
|
|
11.4
|
|
|
—
|
|
|
(0.7
|
)
|
|
15.1
|
|
|||||
Amounts reclassified from AOCI (b)
|
|
6.4
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
12.4
|
|
|||||
Net other comprehensive income (loss)
|
|
10.8
|
|
|
17.4
|
|
|
—
|
|
|
(0.7
|
)
|
|
27.5
|
|
|||||
Balance at September 30, 2016
|
|
$
|
(11.0
|
)
|
|
$
|
(326.9
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(44.2
|
)
|
|
$
|
(382.4
|
)
|
Three Months Ended September 30, 2015 ($ in millions) (a) |
|
Cash flow
hedging items
|
|
Pension and
other
postretirement
benefit plan
items
|
|
Unrealized
losses on
available-for-
sale securities
|
|
Foreign currency items
|
|
Total
|
||||||||||
Balance at June 30, 2015
|
|
$
|
(28.5
|
)
|
|
$
|
(256.8
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(42.6
|
)
|
|
$
|
(328.2
|
)
|
Other comprehensive loss before reclassifications
|
|
(11.4
|
)
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
(14.7
|
)
|
|||||
Amounts reclassified from AOCI (b)
|
|
5.9
|
|
|
3.7
|
|
|
—
|
|
|
—
|
|
|
9.6
|
|
|||||
Net other comprehensive (loss) income
|
|
(5.5
|
)
|
|
3.7
|
|
|
—
|
|
|
(3.3
|
)
|
|
(5.1
|
)
|
|||||
Balance at September 30, 2015
|
|
$
|
(34.0
|
)
|
|
$
|
(253.1
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(45.9
|
)
|
|
$
|
(333.3
|
)
|
(a)
|
All amounts are net of tax. Amounts in parentheses indicate debits.
|
(b)
|
See separate table below for further details.
|
($ in millions) (a)
|
|
Location of
(loss) gain
|
|
Amount Reclassified from AOCI
Three Months Ended September 30, |
||||||
Details about AOCI Components
|
|
|
2016
|
|
2015
|
|||||
Cash flow hedging items:
|
|
|
|
|
|
|
|
|
||
Commodity contracts
|
|
Cost of sales
|
|
$
|
(10.1
|
)
|
|
$
|
(9.3
|
)
|
Foreign exchange contracts
|
|
Net sales
|
|
0.1
|
|
|
(0.1
|
)
|
||
Forward interest rate swaps
|
|
Interest expense
|
|
0.1
|
|
|
0.1
|
|
||
|
|
Total before tax
|
|
(9.9
|
)
|
|
(9.3
|
)
|
||
|
|
Tax benefit
|
|
3.5
|
|
|
3.4
|
|
||
|
|
Net of tax
|
|
$
|
(6.4
|
)
|
|
$
|
(5.9
|
)
|
($ in millions) (a)
|
|
Location of
(loss) gain
|
|
Amount Reclassified from AOCI Three Months Ended September 30,
|
||||||
Details about AOCI Components
|
|
|
2016
|
|
2015
|
|||||
Amortization of pension and other postretirement benefit plan items:
|
|
|
|
|
|
|
|
|
||
Net actuarial loss
|
|
(b)
|
|
$
|
(10.2
|
)
|
|
$
|
(7.5
|
)
|
Prior service cost
|
|
(b)
|
|
1.4
|
|
|
1.5
|
|
||
Curtailment charge
|
|
(b)
|
|
(0.5
|
)
|
|
—
|
|
||
|
|
Total before tax
|
|
(9.3
|
)
|
|
(6.0
|
)
|
||
|
|
Tax benefit
|
|
3.3
|
|
|
2.3
|
|
||
|
|
Net of tax
|
|
$
|
(6.0
|
)
|
|
$
|
(3.7
|
)
|
(a)
|
Amounts in parentheses indicate debits to income/loss.
|
(b)
|
These AOCI components are included in the computation of net periodic benefit cost (see Note 6. Pension and Other Postretirement Benefits for additional details).
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Pension plans
|
|
$
|
16.1
|
|
|
$
|
12.7
|
|
Other postretirement plans
|
|
0.7
|
|
|
0.7
|
|
||
Net periodic benefit costs
|
|
$
|
16.8
|
|
|
$
|
13.4
|
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Cost of sales
|
|
|
|
|
|
|
||
Service cost
|
|
$
|
7.6
|
|
|
$
|
7.0
|
|
Pension earnings, interest and deferrals
|
|
5.1
|
|
|
3.3
|
|
||
|
|
12.7
|
|
|
10.3
|
|
||
Selling, general and administrative expenses
|
|
|
|
|
|
|
||
Service cost
|
|
1.5
|
|
|
1.5
|
|
||
Pension earnings, interest and deferrals
|
|
2.1
|
|
|
1.6
|
|
||
Curtailment charge
|
|
0.5
|
|
|
—
|
|
||
|
|
4.1
|
|
|
3.1
|
|
||
|
|
|
|
|
||||
Net pension expense
|
|
$
|
16.8
|
|
|
$
|
13.4
|
|
|
|
Three Months Ended
September 30, |
|
$
Decrease |
|
%
Decrease |
|||||||||
($ in millions)
|
|
2016
|
|
2015
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
206.4
|
|
|
$
|
237.4
|
|
|
$
|
(31.0
|
)
|
|
(13
|
)%
|
Energy
|
|
28.4
|
|
|
38.3
|
|
|
(9.9
|
)
|
|
(26
|
)%
|
|||
Transportation
|
|
35.2
|
|
|
43.7
|
|
|
(8.5
|
)
|
|
(19
|
)%
|
|||
Medical
|
|
24.5
|
|
|
28.6
|
|
|
(4.1
|
)
|
|
(14
|
)%
|
|||
Industrial and Consumer
|
|
66.4
|
|
|
77.6
|
|
|
(11.2
|
)
|
|
(14
|
)%
|
|||
Distribution
|
|
28.1
|
|
|
30.0
|
|
|
(1.9
|
)
|
|
(6
|
)%
|
|||
Total net sales
|
|
$
|
389.0
|
|
|
$
|
455.6
|
|
|
$
|
(66.6
|
)
|
|
(15
|
)%
|
|
|
Three Months Ended
September 30, |
|
$
Decrease |
|
%
Decrease |
|||||||||
($ in millions)
|
|
2016
|
|
2015
|
|
|
|||||||||
Aerospace and Defense
|
|
$
|
173.3
|
|
|
$
|
193.9
|
|
|
$
|
(20.6
|
)
|
|
(11
|
)%
|
Energy
|
|
25.7
|
|
|
32.6
|
|
|
(6.9
|
)
|
|
(21
|
)%
|
|||
Transportation
|
|
30.6
|
|
|
35.7
|
|
|
(5.1
|
)
|
|
(14
|
)%
|
|||
Medical
|
|
23.0
|
|
|
26.4
|
|
|
(3.4
|
)
|
|
(13
|
)%
|
|||
Industrial and Consumer
|
|
59.3
|
|
|
66.7
|
|
|
(7.4
|
)
|
|
(11
|
)%
|
|||
Distribution
|
|
27.9
|
|
|
29.8
|
|
|
(1.9
|
)
|
|
(6
|
)%
|
|||
Total net sales excluding surcharge
|
|
$
|
339.8
|
|
|
$
|
385.1
|
|
|
$
|
(45.3
|
)
|
|
(12
|
)%
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
389.0
|
|
|
$
|
455.6
|
|
Less: surcharge revenue
|
|
49.2
|
|
|
70.5
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
339.8
|
|
|
$
|
385.1
|
|
|
|
|
|
|
||||
Gross profit
|
|
$
|
46.0
|
|
|
$
|
68.6
|
|
|
|
|
|
|
||||
Gross margin
|
|
11.8
|
%
|
|
15.1
|
%
|
||
|
|
|
|
|
||||
Gross margin excluding surcharge revenue
|
|
13.5
|
%
|
|
17.8
|
%
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Net sales
|
|
$
|
389.0
|
|
|
$
|
455.6
|
|
Less: surcharge revenue
|
|
49.2
|
|
|
70.5
|
|
||
Net sales excluding surcharge revenue
|
|
$
|
339.8
|
|
|
$
|
385.1
|
|
|
|
|
|
|
||||
Operating income
|
|
$
|
1.4
|
|
|
$
|
24.8
|
|
Pension EID
|
|
7.1
|
|
|
4.8
|
|
||
Operating income excluding pension EID
|
|
8.5
|
|
|
29.6
|
|
||
Special items:
|
|
|
|
|
||||
Pension curtailment charge
|
|
0.5
|
|
|
—
|
|
||
Restructuring charges
|
|
—
|
|
|
0.4
|
|
||
Consulting costs
|
|
—
|
|
|
2.6
|
|
||
Operating income excluding pension EID and other special items
|
|
$
|
9.0
|
|
|
$
|
32.6
|
|
|
|
|
|
|
||||
Operating margin
|
|
0.4
|
%
|
|
5.4
|
%
|
||
|
|
|
|
|
||||
Operating margin excluding surcharge, pension EID and other special items
|
|
2.6
|
%
|
|
8.5
|
%
|
|
|
Three Months Ended
September 30, |
|
Increase (Decrease) |
|
%
Increase (Decrease) |
||||||
(Pounds sold, in thousands)
|
|
2016
|
|
2015
|
|
|
||||||
Specialty Alloys Operations
|
|
52,360
|
|
|
56,814
|
|
|
(4,454
|
)
|
|
(8
|
)%
|
Performance Engineered Products *
|
|
2,414
|
|
|
2,956
|
|
|
(542
|
)
|
|
(18
|
)%
|
Intersegment
|
|
(594
|
)
|
|
(1,348
|
)
|
|
754
|
|
|
56
|
%
|
Consolidated pounds sold
|
|
54,180
|
|
|
58,422
|
|
|
(4,242
|
)
|
|
(7
|
)%
|
|
|
Three Months Ended
September 30, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2016
|
|
2015
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
315.1
|
|
|
$
|
372.6
|
|
|
$
|
(57.5
|
)
|
|
(15
|
)%
|
Performance Engineered Products
|
|
78.5
|
|
|
91.5
|
|
|
(13.0
|
)
|
|
(14
|
)%
|
|||
Intersegment
|
|
(4.6
|
)
|
|
(8.5
|
)
|
|
3.9
|
|
|
46
|
%
|
|||
Total net sales
|
|
$
|
389.0
|
|
|
$
|
455.6
|
|
|
$
|
(66.6
|
)
|
|
(15
|
)%
|
|
|
Three Months Ended
September 30, |
|
$
Increase (Decrease) |
|
%
Increase (Decrease) |
|||||||||
($ in millions)
|
|
2016
|
|
2015
|
|
|
|||||||||
Specialty Alloys Operations
|
|
$
|
266.0
|
|
|
$
|
301.6
|
|
|
$
|
(35.6
|
)
|
|
(12
|
)%
|
Performance Engineered Products
|
|
78.3
|
|
|
91.4
|
|
|
(13.1
|
)
|
|
(14
|
)%
|
|||
Intersegment
|
|
(4.5
|
)
|
|
(7.9
|
)
|
|
3.4
|
|
|
43
|
%
|
|||
Total net sales excluding surcharge revenue
|
|
$
|
339.8
|
|
|
$
|
385.1
|
|
|
$
|
(45.3
|
)
|
|
(12
|
)%
|
Covenant
|
|
Covenant Requirement
|
|
Actual Ratio
|
Consolidated interest coverage
|
|
3.50 to 1.00 (minimum)
|
|
9.2 to 1.00
|
Consolidated debt to capital
|
|
55% (maximum)
|
|
35.2%
|
($ in millions, except per share amounts)
|
|
Loss Before Income Taxes
|
|
Income Tax Benefit (Expense)
|
|
Net (Loss) Income
|
|
(Loss) Earnings Per Diluted Share**
|
||||||||
Three months ended September 30, 2016, as reported
|
|
$
|
(5.3
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(6.2
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
Pension curtailment charge
|
|
0.5
|
|
|
(0.1
|
)
|
|
0.4
|
|
|
0.01
|
|
||||
Income tax item*
|
|
—
|
|
|
2.1
|
|
|
2.1
|
|
|
0.04
|
|
||||
Total impact of special items
|
|
0.5
|
|
|
2.0
|
|
|
2.5
|
|
|
0.05
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended September 30, 2016, as adjusted
|
|
$
|
(4.8
|
)
|
|
$
|
1.1
|
|
|
$
|
(3.7
|
)
|
|
$
|
(0.08
|
)
|
($ in millions, except per share amounts)
|
|
Income Before Income Taxes
|
|
Income Tax (Expense) Benefit
|
|
Net Income
|
|
Earnings Per Diluted Share**
|
||||||||
Three months ended September 30, 2015, as reported
|
|
$
|
16.1
|
|
|
$
|
(7.2
|
)
|
|
$
|
8.9
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
||||||||
Special items:
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
|
0.4
|
|
|
(0.1
|
)
|
|
0.3
|
|
|
0.01
|
|
||||
Consulting costs
|
|
2.6
|
|
|
(0.9
|
)
|
|
1.7
|
|
|
0.03
|
|
||||
Income tax item*
|
|
—
|
|
|
2.0
|
|
|
2.0
|
|
|
0.04
|
|
||||
Total impact of special items
|
|
3.0
|
|
|
1.0
|
|
|
4.0
|
|
|
0.08
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three months ended September 30, 2015, as adjusted
|
|
$
|
19.1
|
|
|
$
|
(6.2
|
)
|
|
$
|
12.9
|
|
|
$
|
0.26
|
|
|
|
Three Months Ended
September 30, |
||||||
($ in millions)
|
|
2016
|
|
2015
|
||||
Net cash provided from operating activities
|
|
$
|
3.9
|
|
|
$
|
41.5
|
|
Purchases of property, equipment and software
|
|
(26.6
|
)
|
|
(29.9
|
)
|
||
Other
|
|
—
|
|
|
4.0
|
|
||
Dividends paid
|
|
(8.5
|
)
|
|
(9.0
|
)
|
||
Free cash flow
|
|
$
|
(31.2
|
)
|
|
$
|
6.6
|
|
(a)
|
Evaluation of Effectiveness of Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control over Financial Reporting
|
Exhibit
No.
|
|
Description
|
|
|
|
10.A
|
|
First Amendment to the Supplement Retirement Plan for Executives of Carpenter Technology Corporation (filed herewith)
|
|
|
|
10.P
|
|
First Amendment to the Benefits Restoration Plan of Carpenter Technology Corporation (filed herewith)
|
|
|
|
31 (A)
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended. (filed herewith)
|
|
|
|
31 (B)
|
|
Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended. (filed herewith)
|
|
|
|
32
|
|
Certification of President and Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
|
|
|
101
|
|
The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Changes in Equity; and (vi) the Notes to the Consolidated Financial Statements.
|
|
Carpenter Technology Corporation
|
|
(Registrant)
|
|
|
Date: October 27, 2016
|
/s/ Damon J. Audia
|
|
Damon J. Audia
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer
)
|
Exhibit
No.
|
|
Description
|
|
|
|
10.A
|
|
First Amendment to the Supplement Retirement Plan for Executives of Carpenter Technology Corporation
|
|
|
|
10.P
|
|
First Amendment to the Benefits Restoration Plan of Carpenter Technology Corporation
|
|
|
|
31 (A)
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended.
|
|
|
|
31 (B)
|
|
Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a—14(a) and Rule 15d—14(a) of the Securities Exchange Act, as amended.
|
|
|
|
32
|
|
Certification of President and Chief Executive Officer and Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Changes in Equity; and (vi) the Notes to the Consolidated Financial Statements.
|
1.
|
By adding the following sentence to the end of Section 2(A):
|
2.
|
By adding the following paragraph to the end of Section 2(C):
|
3.
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By revising Section 2(O) to read as follows:
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4.
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By adding the following paragraph to the end of Section 3:
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5.
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By revising Section 5(B)(3) to read as follows:
|
“(3)
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To the estate of the Participant or the estate of a payee provided in Section s 5(B)(1) or 5(B)(2) above, as the Plan committee determines, in its sole discretion, in a lump sum. Any lump sum payment hereunder shall be calculated as the present value of the remaining payments, determined in accordance with the ‘applicable interest rate’ and the ‘applicable mortality table’ used in the definition of ‘Actuarial Equivalent’ in the General Retirement Plan.”
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6.
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By revising Section 6(B)(2) to read as follows:
|
“(2)
|
for each additional year in excess of the service credited in (1) above that the Participant accrues a benefit under the General Retirement Plan, 1.3 percent for each additional year of service during the first 20 years of Benefit Service (as defined in the General Retirement Plan) and 1.4 percent for each other additional year of service, or fraction thereof.”
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7.
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By adding the following paragraph to the end of Section 6:
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8.
|
By revising Section 7(B)(2) to read as follows:
|
“(2)
|
‘Early Retirement Benefit’ shall mean the Annual Base Formula Retirement Benefit, as set forth in Section 6(A) and 6(B), reduced to its equivalent actuarial value from age 62 to the date of initial payment to the Participant based on the early retirement factors in Appendix N of the General Retirement Plan, and subsequently adjusted for any further reduction required under Section 6(C).”
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1.
|
By adding the following paragraph to the end of Section 1.1:
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2.
|
By adding the following sentence to the end of Section 1.8:
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3.
|
By adding the following new Section 2.3:
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1.
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I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of the Carpenter Technology Corporation (the “Registrant”);
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2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
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4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: October 27, 2016
|
/s/ Tony R. Thene
|
|
Tony R. Thene, President and
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (the “Report”) of the Carpenter Technology Corporation (the “Registrant”);
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: October 27, 2016
|
/s/ Damon J. Audia
|
|
Damon J. Audia
|
|
Senior Vice President and Chief Financial Officer
|
Date: October 27, 2016
|
|
|
|
|
|
|
|
|
/s/ Tony R. Thene
|
|
/s/ Damon J. Audia
|
Tony R. Thene
|
|
Damon J. Audia
|
President and Chief
|
|
Senior Vice President and
|
Executive Officer
|
|
Chief Financial Officer
|