ECL Ecolab Inc

Ecolab (NYSE:ECL): 2006 THIRD QUARTER HIGHLIGHTS: Record diluted net income per share, +13% to $0.43 Record sales, +10% to $1.3 billion Double-digit U.S. sales and income propel growth, led by the Institutional and Pest Elimination Divisions Full year 2006 EPS range improved to $1.42 to $1.43 Third Quarter and Nine Months Ended Sept. 30 Third Quarter % Nine Months % 2006� 2005� increase 2006� 2005� increase (Millions, except per share) (unaudited) (unaudited) � Net Sales $1,278.9� $ 1,164.8� 10% $3,624.8� $3,393.3� 7% � Operating Income 181.4� 162.4� 12% 465.9� 418.7� 11% � Pretax Income 170.1� 150.9� 13% 433.4� 383.8� 13% Taxes 59.8� 53.0� 13% 152.0� 135.0� 13% Net Income $110.4� $ 98.0� 13% $281.4� $248.8� 13% � Diluted Net Income Per Common Share $0.43� $ 0.38� 13% $1.09� $0.96� 14% Diluted Average Shares Outstanding 256.7� 259.9� -1% 257.2� 260.1� -1% Note: Results for both 2005 and 2006 reflect Ecolab's adoption of SFAS 123 (R), which requires the expensing of stock options, and Ecolab's restatement of prior period results as part of its transition to this new accounting standard. Double-digit sales and operating income growth from U.S. operations led Ecolab�s third quarter results to record levels for the period ended September 30, 2006. Ecolab's consolidated sales increased 10% to a record $1.3 billion in the third quarter of 2006. Net income increased 13% to a record $110 million, or $0.43 per diluted share. All financial results presented in this release include the impact of expensing stock options. Ecolab adopted SFAS 123(R), the accounting standard for expensing stock options, in the fourth quarter of 2005. As part of the transition to the new standard, Ecolab restated its earnings per share in line with the pro forma amounts historically disclosed in the notes to Ecolab�s financial statements. These restated results were included in Ecolab�s 2005 annual report and are available at Ecolab�s website at www.ecolab.com/investor. Commenting on the quarter, Douglas M. Baker, Jr., Ecolab�s Chairman, President and Chief Executive Officer said, �We enjoyed a terrific quarter as we benefited from investments in our sales force, new product innovations, operating improvements and better pricing. We also continued to make further competitive gains in the quarter as we demonstrated the strength and value of our premium service offering. �Our outlook remains excellent. We are implementing the right actions to deliver strong growth in 2006 and at the same time ensure we have the right means to continue driving strong growth for years ahead � expanding our industry-leading sales and service force; making key investments in developing our infrastructure, information technology and differentiated product research and development; and driving our successful Circle the Customer strategy. In addition, as reflected by our recent announcements, we continue to aggressively pursue acquisitions to strengthen and broaden our global customer offering. We remain focused on driving superior performance, both for our customers and our shareholders, and are working to improve our fundamentals to deliver those results. We will continue to build on our powerful business model to deliver the leading customer solutions, and through that, we expect to deliver consistent, reliable and superior growth for years to come.� Third quarter 2006 sales for Ecolab's United States Cleaning & Sanitizing operations rose 10% to $562 million, led by double-digit gains by the Institutional Division, and strong growth from the Food & Beverage, Professional Products, Textile Care and Healthcare businesses. Ecolab's United States Cleaning & Sanitizing operating income rose 15% to $99 million, as the benefits of the higher sales, cost efficiencies, competitive gains and better pricing more than offset higher delivered product costs. United States Other Services sales increased 10% to $108 million in the third quarter benefiting from continued double-digit gains by Pest Elimination. Operating income increased 12% to $12 million as Pest Elimination growth was partially offset by accelerated investments at GCS. Sales of Ecolab's International operations, when measured at fixed currency rates, rose 6% to $584 million in the third quarter. Latin America showed double-digit sales gains, and Asia Pacific and Canada sales also showed good increases; Europe recorded a moderate sales gain as weak economic trends in major central countries slowed results. Fixed currency operating income rose 3% to $66 million, as sales growth and pricing initiatives were partially offset by higher delivered product costs and growth and efficiency investments. When measured at public currency rates, International sales increased 10% and operating income grew 7%. Currency translation had a favorable impact on net income growth of approximately $1.5 million for the third quarter of 2006. Ecolab reacquired 1.4 million shares of its common stock during the third quarter. Business Outlook Certain information presented in this news release, including the following statements, are forward-looking and based on current expectations. Actual results may differ materially. These statements do not include the potential impact of business acquisitions, divestitures, higher than anticipated raw material price increases or other material corporate events, which may be completed after the date of this release. This Business Outlook section should be read in conjunction with the information on �Forward-Looking Statements� at the end of this release. Ecolab expects sales for both domestic and international operations (in fixed currencies) to increase in the fourth quarter 2006 over the fourth quarter 2005. Gross margins are expected to rise above 50% and compare favorably with 49.4% last year. Selling, general and administrative expenses are expected to approximate the 39% recorded a year ago. Interest expense is expected to be approximately $13 million. The effective tax rate in the quarter should be approximately 36%. Overall, currency translation is expected to benefit fourth quarter earnings. Diluted earnings per share are expected to be in the $0.33-$0.34 range in the fourth quarter of 2006. Diluted earnings per share were $0.27 for the fourth quarter of 2005. For the full year ending December 31, 2006, Ecolab continues to expect diluted earnings per share in the $1.42 -$1.43 range. In 2005, Ecolab reported net income per share of $1.23. With 2005 sales of $4.5 billion, Ecolab is the leading global developer and marketer of premium cleaning, sanitizing, pest elimination, maintenance and repair products and services for the hospitality, foodservice, healthcare and industrial markets. Ecolab shares are traded on the New York Stock Exchange under the symbol ECL. Ecolab news releases and other investor information are available on the Internet at http://www.ecolab.com. Ecolab will host a live webcast to review the second quarter earnings announcement today at 1:00 p.m. Eastern Time. The webcast will be available to the public on Ecolab's website at http://www.ecolab.com/investor. A replay of the webcast will be available at that site through November 3, 2006. Listening to the webcast requires Internet access, a soundcard and the Windows Media Player or other compatible streaming media player. If you do not have the Media Player client installed on your PC, you may download a free version of Media Player at www.microsoft.com/windows/windowsmedia/download/default.asp. This news release contains various �Forward-Looking Statements� within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements concerning our 2006 fourth quarter and full year financial and business prospects, including estimated sales; gross margins; selling, general and administrative expenses; interest expense; effective tax rates; currency translation; and earnings per share. These statements, which represent Ecolab�s expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such Forward-Looking Statements. Risks and uncertainties that may affect operating results and business performance include: the vitality of the foodservice, hospitality, travel, health care and food processing industries; restraints on pricing flexibility due to competitive factors, customer or vendor consolidations, and existing contractual obligations; changes in oil or raw material prices or unavailability of adequate and reasonably priced raw materials or substitutes therefor; the occurrence of capacity constraints or the loss of a key supplier or the inability to obtain or renew supply agreements on favorable terms; the effect of future acquisitions or divestitures or other corporate transactions; our ability to achieve plans for past acquisitions; the costs and effects of complying with: (i) laws and regulations relating to the environment and to the manufacture, storage, distribution, efficacy and labeling of our products, and (ii) changes in tax, fiscal, governmental and other regulatory policies; economic factors such as the worldwide economy, interest rates and currency movements including, in particular, our exposure to foreign currency risk; the occurrence of (a) litigation or claims, (b) the loss or insolvency of a major customer or distributor, (c) war (including acts of terrorism or hostilities which impact our markets), (d) natural or manmade disasters, or (e) severe weather conditions or public health epidemics affecting the foodservice, hospitality and travel industries; loss of, or changes in, executive management; our ability to continue product introductions or reformulations and technological innovations; and other uncertainties or risks reported from time to time in our reports to the Securities and Exchange Commission. In addition, we note that our stock price can be affected by fluctuations in quarterly earnings. There can be no assurances that our earnings levels will meet investors' expectations. We undertake no duty to update our Forward-Looking Statements. (ECL-E) � ECOLAB INC. CONSOLIDATED STATEMENT OF INCOME THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2006 (unaudited) � Third Quarter Nine Months (thousands, except per share) 2006� 2005� 2006� 2005� � � Net Sales $ 1,278,855� $ 1,164,773� $ 3,624,814� $ 3,393,317� � Cost of Sales 625,554� 572,862� 1,786,048� 1,670,903� Selling, General and Administrative Expenses 471,937� 429,464� 1,372,818� 1,303,728� � Operating Income 181,364� 162,447� 465,948� 418,686� � Interest Expense, Net 11,219� 11,529� 32,561� 34,903� � Income before Income Taxes 170,145� 150,918� 433,387� 383,783� � Provision for Income Taxes 59,786� 52,960� 151,963� 134,998� � Net Income $ 110,359� $ 97,958� $ 281,424� $ 248,785� � Diluted Net Income per Common Share $ 0.43� $ 0.38� $ 1.09� $ 0.96� � Weighted-Average Common Shares Outstanding ��Basic 251,573� 255,817� 252,422� 255,854� ��Diluted 256,657� 259,911� 257,183� 260,099� � � 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". � ECOLAB INC. OPERATING SEGMENT INFORMATION THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2006 (unaudited) � Third Quarter Nine Months (thousands) 2006� 2005� 2006� 2005� � Net Sales United States Cleaning & Sanitizing $ 561,707� $ 510,476� $ 1,619,631� $ 1,474,463� Other Services 108,297� 98,315� 306,432� 280,453� Total 670,004� 608,791� 1,926,063� 1,754,916� International 584,273� 550,197� 1,656,161� 1,570,648� Effect of Foreign Currency Translation 24,578� 5,785� 42,590� 67,753� Consolidated $ 1,278,855� $ 1,164,773� $ 3,624,814� $ 3,393,317� � Operating Income United States Cleaning & Sanitizing $ 98,976� $ 85,933� $ 264,619� $ 230,198� Other Services 12,466� 11,124� 31,100� 28,945� Total 111,442� 97,057� 295,719� 259,143� International 66,221� 64,212� 164,604� 153,146� Effect of Foreign Currency Translation 3,701� 1,178� 5,625� 6,397� Consolidated $ 181,364� $ 162,447� $ 465,948� $ 418,686� � � 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". � ECOLAB INC. CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2006 � September 30 December 31 September 30 (thousands) 2006� 2005� 2005� (unaudited) (unaudited) � Assets Current assets Cash and cash equivalents $ 54,192� $ 104,378� $ 165,308� Short-term investments 125,063� Accounts receivable, net 866,214� 743,520� 801,981� Inventories 354,225� 325,574� 337,518� Deferred income taxes 65,097� 65,880� 73,844� Other current assets 66,563� 57,251� 68,914� Total current assets 1,406,291� 1,421,666� 1,447,565� � Property, plant and equipment, net 874,793� 835,503� 837,850� � Goodwill, net 1,022,119� 937,019� 964,888� � Other intangible assets, net 222,749� 202,936� 213,635� � Other assets, net 480,924� 399,504� 364,644� � Total assets $ 4,006,876� $ 3,796,628� $ 3,828,582� � Liabilities and Shareholders' Equity Current liabilities Short-term debt $ 190,008� $ 226,927� $ 169,529� Accounts payable 310,597� 277,635� 264,196� Compensation and benefits 213,490� 214,131� 199,108� Income taxes 29,178� 39,583� 49,955� Other current liabilities 402,698� 361,081� 383,264� Total current liabilities 1,145,971� 1,119,357� 1,066,052� � Long-term debt 542,948� 519,374� 539,019� � Postretirement health care and pension benefits 342,079� 302,048� 291,343� � Other liabilities 212,759� 206,639� 246,978� � Shareholders' equity 1,763,119� 1,649,210� 1,685,190� � � Total liabilities and shareholders' equity $ 4,006,876� $ 3,796,628� $ 3,828,582� � � September 30, 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". Ecolab (NYSE:ECL): 2006 THIRD QUARTER HIGHLIGHTS: -- Record diluted net income per share, +13% to $0.43 -- Record sales, +10% to $1.3 billion -- Double-digit U.S. sales and income propel growth, led by the Institutional and Pest Elimination Divisions -- Full year 2006 EPS range improved to $1.42 to $1.43 -0- *T Third Quarter and Nine Months Ended Sept. 30 ------------------------------ Third Quarter % --------------------- 2006 2005 increase ----------- --------- -------- (Millions, except per share) (unaudited) Net Sales $1,278.9 $1,164.8 10% Operating Income 181.4 162.4 12% Pretax Income 170.1 150.9 13% Taxes 59.8 53.0 13% ----------- --------- -------- Net Income $110.4 $98.0 13% =========== ========= ======== Diluted Net Income Per Common Share $0.43 $0.38 13% Diluted Average Shares Outstanding 256.7 259.9 -1% Nine Months % --------------------- 2006 2005 increase ----------- --------- -------- (Millions, except per share) (unaudited) Net Sales $3,624.8 $3,393.3 7% Operating Income 465.9 418.7 11% Pretax Income 433.4 383.8 13% Taxes 152.0 135.0 13% ----------- --------- -------- Net Income $281.4 $248.8 13% =========== ========= ======== Diluted Net Income Per Common Share $1.09 $0.96 14% Diluted Average Shares Outstanding 257.2 260.1 -1% *T -0- *T Note: Results for both 2005 and 2006 reflect Ecolab's adoption of SFAS 123 (R), which requires the expensing of stock options, and Ecolab's restatement of prior period results as part of its transition to this new accounting standard. *T Double-digit sales and operating income growth from U.S. operations led Ecolab's third quarter results to record levels for the period ended September 30, 2006. Ecolab's consolidated sales increased 10% to a record $1.3 billion in the third quarter of 2006. Net income increased 13% to a record $110 million, or $0.43 per diluted share. All financial results presented in this release include the impact of expensing stock options. Ecolab adopted SFAS 123(R), the accounting standard for expensing stock options, in the fourth quarter of 2005. As part of the transition to the new standard, Ecolab restated its earnings per share in line with the pro forma amounts historically disclosed in the notes to Ecolab's financial statements. These restated results were included in Ecolab's 2005 annual report and are available at Ecolab's website at www.ecolab.com/investor. Commenting on the quarter, Douglas M. Baker, Jr., Ecolab's Chairman, President and Chief Executive Officer said, "We enjoyed a terrific quarter as we benefited from investments in our sales force, new product innovations, operating improvements and better pricing. We also continued to make further competitive gains in the quarter as we demonstrated the strength and value of our premium service offering. "Our outlook remains excellent. We are implementing the right actions to deliver strong growth in 2006 and at the same time ensure we have the right means to continue driving strong growth for years ahead - expanding our industry-leading sales and service force; making key investments in developing our infrastructure, information technology and differentiated product research and development; and driving our successful Circle the Customer strategy. In addition, as reflected by our recent announcements, we continue to aggressively pursue acquisitions to strengthen and broaden our global customer offering. We remain focused on driving superior performance, both for our customers and our shareholders, and are working to improve our fundamentals to deliver those results. We will continue to build on our powerful business model to deliver the leading customer solutions, and through that, we expect to deliver consistent, reliable and superior growth for years to come." Third quarter 2006 sales for Ecolab's United States Cleaning & Sanitizing operations rose 10% to $562 million, led by double-digit gains by the Institutional Division, and strong growth from the Food & Beverage, Professional Products, Textile Care and Healthcare businesses. Ecolab's United States Cleaning & Sanitizing operating income rose 15% to $99 million, as the benefits of the higher sales, cost efficiencies, competitive gains and better pricing more than offset higher delivered product costs. United States Other Services sales increased 10% to $108 million in the third quarter benefiting from continued double-digit gains by Pest Elimination. Operating income increased 12% to $12 million as Pest Elimination growth was partially offset by accelerated investments at GCS. Sales of Ecolab's International operations, when measured at fixed currency rates, rose 6% to $584 million in the third quarter. Latin America showed double-digit sales gains, and Asia Pacific and Canada sales also showed good increases; Europe recorded a moderate sales gain as weak economic trends in major central countries slowed results. Fixed currency operating income rose 3% to $66 million, as sales growth and pricing initiatives were partially offset by higher delivered product costs and growth and efficiency investments. When measured at public currency rates, International sales increased 10% and operating income grew 7%. Currency translation had a favorable impact on net income growth of approximately $1.5 million for the third quarter of 2006. Ecolab reacquired 1.4 million shares of its common stock during the third quarter. Business Outlook Certain information presented in this news release, including the following statements, are forward-looking and based on current expectations. Actual results may differ materially. These statements do not include the potential impact of business acquisitions, divestitures, higher than anticipated raw material price increases or other material corporate events, which may be completed after the date of this release. This Business Outlook section should be read in conjunction with the information on "Forward-Looking Statements" at the end of this release. Ecolab expects sales for both domestic and international operations (in fixed currencies) to increase in the fourth quarter 2006 over the fourth quarter 2005. Gross margins are expected to rise above 50% and compare favorably with 49.4% last year. Selling, general and administrative expenses are expected to approximate the 39% recorded a year ago. Interest expense is expected to be approximately $13 million. The effective tax rate in the quarter should be approximately 36%. Overall, currency translation is expected to benefit fourth quarter earnings. Diluted earnings per share are expected to be in the $0.33-$0.34 range in the fourth quarter of 2006. Diluted earnings per share were $0.27 for the fourth quarter of 2005. For the full year ending December 31, 2006, Ecolab continues to expect diluted earnings per share in the $1.42 -$1.43 range. In 2005, Ecolab reported net income per share of $1.23. With 2005 sales of $4.5 billion, Ecolab is the leading global developer and marketer of premium cleaning, sanitizing, pest elimination, maintenance and repair products and services for the hospitality, foodservice, healthcare and industrial markets. Ecolab shares are traded on the New York Stock Exchange under the symbol ECL. Ecolab news releases and other investor information are available on the Internet at http://www.ecolab.com. Ecolab will host a live webcast to review the second quarter earnings announcement today at 1:00 p.m. Eastern Time. The webcast will be available to the public on Ecolab's website at http://www.ecolab.com/investor. A replay of the webcast will be available at that site through November 3, 2006. Listening to the webcast requires Internet access, a soundcard and the Windows Media Player or other compatible streaming media player. If you do not have the Media Player client installed on your PC, you may download a free version of Media Player at www.microsoft.com/windows/windowsmedia/download/default.asp. This news release contains various "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements concerning our 2006 fourth quarter and full year financial and business prospects, including estimated sales; gross margins; selling, general and administrative expenses; interest expense; effective tax rates; currency translation; and earnings per share. These statements, which represent Ecolab's expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such Forward-Looking Statements. Risks and uncertainties that may affect operating results and business performance include: -- the vitality of the foodservice, hospitality, travel, health care and food processing industries; -- restraints on pricing flexibility due to competitive factors, customer or vendor consolidations, and existing contractual obligations; -- changes in oil or raw material prices or unavailability of adequate and reasonably priced raw materials or substitutes therefor; -- the occurrence of capacity constraints or the loss of a key supplier or the inability to obtain or renew supply agreements on favorable terms; -- the effect of future acquisitions or divestitures or other corporate transactions; -- our ability to achieve plans for past acquisitions; -- the costs and effects of complying with: (i) laws and regulations relating to the environment and to the manufacture, storage, distribution, efficacy and labeling of our products, and (ii) changes in tax, fiscal, governmental and other regulatory policies; -- economic factors such as the worldwide economy, interest rates and currency movements including, in particular, our exposure to foreign currency risk; -- the occurrence of (a) litigation or claims, (b) the loss or insolvency of a major customer or distributor, (c) war (including acts of terrorism or hostilities which impact our markets), (d) natural or manmade disasters, or (e) severe weather conditions or public health epidemics affecting the foodservice, hospitality and travel industries; -- loss of, or changes in, executive management; -- our ability to continue product introductions or reformulations and technological innovations; and -- other uncertainties or risks reported from time to time in our reports to the Securities and Exchange Commission. In addition, we note that our stock price can be affected by fluctuations in quarterly earnings. There can be no assurances that our earnings levels will meet investors' expectations. We undertake no duty to update our Forward-Looking Statements. (ECL-E) -0- *T ECOLAB INC. CONSOLIDATED STATEMENT OF INCOME THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2006 (unaudited) Third Quarter Nine Months ----------------------- ----------------------- (thousands, except per share) 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Net Sales $1,278,855 $1,164,773 $3,624,814 $3,393,317 Cost of Sales 625,554 572,862 1,786,048 1,670,903 Selling, General and Administrative Expenses 471,937 429,464 1,372,818 1,303,728 ----------- ----------- ----------- ----------- Operating Income 181,364 162,447 465,948 418,686 Interest Expense, Net 11,219 11,529 32,561 34,903 ----------- ----------- ----------- ----------- Income before Income Taxes 170,145 150,918 433,387 383,783 Provision for Income Taxes 59,786 52,960 151,963 134,998 ----------- ----------- ----------- ----------- Net Income $110,359 $97,958 $281,424 $248,785 =========== =========== =========== =========== Diluted Net Income per Common Share $0.43 $0.38 $1.09 $0.96 Weighted-Average Common Shares Outstanding Basic 251,573 255,817 252,422 255,854 Diluted 256,657 259,911 257,183 260,099 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". *T -0- *T ECOLAB INC. OPERATING SEGMENT INFORMATION THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2006 (unaudited) Third Quarter Nine Months ----------------------- ----------------------- (thousands) 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Net Sales United States Cleaning & Sanitizing $561,707 $510,476 $1,619,631 $1,474,463 Other Services 108,297 98,315 306,432 280,453 ----------- ----------- ----------- ----------- Total 670,004 608,791 1,926,063 1,754,916 International 584,273 550,197 1,656,161 1,570,648 Effect of Foreign Currency Translation 24,578 5,785 42,590 67,753 ----------- ----------- ----------- ----------- Consolidated $1,278,855 $1,164,773 $3,624,814 $3,393,317 =========== =========== =========== =========== Operating Income United States Cleaning & Sanitizing $98,976 $85,933 $264,619 $230,198 Other Services 12,466 11,124 31,100 28,945 ----------- ----------- ----------- ----------- Total 111,442 97,057 295,719 259,143 International 66,221 64,212 164,604 153,146 Effect of Foreign Currency Translation 3,701 1,178 5,625 6,397 ----------- ----------- ----------- ----------- Consolidated $181,364 $162,447 $465,948 $418,686 =========== =========== =========== =========== 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". *T -0- *T ECOLAB INC. CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2006 September 30 December 31 September 30 (thousands) 2006 2005 2005 ------------ ----------- ------------ (unaudited) (unaudited) Assets Current assets Cash and cash equivalents $54,192 $104,378 $165,308 Short-term investments 125,063 Accounts receivable, net 866,214 743,520 801,981 Inventories 354,225 325,574 337,518 Deferred income taxes 65,097 65,880 73,844 Other current assets 66,563 57,251 68,914 ------------ ----------- ------------ Total current assets 1,406,291 1,421,666 1,447,565 Property, plant and equipment, net 874,793 835,503 837,850 Goodwill, net 1,022,119 937,019 964,888 Other intangible assets, net 222,749 202,936 213,635 Other assets, net 480,924 399,504 364,644 ------------ ----------- ------------ Total assets $4,006,876 $3,796,628 $3,828,582 ============ =========== ============ Liabilities and Shareholders' Equity Current liabilities Short-term debt $190,008 $226,927 $169,529 Accounts payable 310,597 277,635 264,196 Compensation and benefits 213,490 214,131 199,108 Income taxes 29,178 39,583 49,955 Other current liabilities 402,698 361,081 383,264 ------------ ----------- ------------ Total current liabilities 1,145,971 1,119,357 1,066,052 Long-term debt 542,948 519,374 539,019 Postretirement health care and pension benefits 342,079 302,048 291,343 Other liabilities 212,759 206,639 246,978 Shareholders' equity 1,763,119 1,649,210 1,685,190 ------------ ----------- ------------ Total liabilities and shareholders' equity $4,006,876 $3,796,628 $3,828,582 ============ =========== ============ September 30, 2005 amounts have been restated for the adoption of SFAS No. 123(R), "Share-Based Payment". *T