The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company’s performance. In addition, Free Cash Flow provides supplemental information to assist management and investors in analyzing the Company’s ability to generate positive cash flow. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. r e c o n c i l i a t i o n o f n o n - g a a p f i n a n c i a l m e a s u r e s For year ended December 31, (in thousands, except per share data) 2012 2011 2010 BALANCE SHEET ITEMS: Notes payable and current maturities of long-term debt $ 1,123 $ 1,112 $ 984 Long-term debt 399,092 398,914 398,736 Total debt 400,215 400,026 399,720 Less cash and cash equivalents 423,947 245,089 272,941 Net debt (net cash) $ (23,732) $ 154,937 $ 126,779 Net income attributable to common shareholders – GAAP $ 216,993 $ 26,315 $ 154,170 Special items gain (loss)(a) (1,423) (176,784) 121 Net income attributable to common shareholders before special items $ 218,416 203,098 $ 154,291 Average equity – GAAP $ 897,532 $ 1,048,267 $ 920,168 Adjustments to average equity (b) (2,832) 13,598 (793) Adjusted average equity 894,700 1,061,865 919,375 Return on average equity 24.2% 2.5% 16.8% Return before special items on adjusted average equity 24.4% 19.1% 16.8% CASH FLOW ITEMS: Cash provided from operating activities before asbestos-related payments $ 312,713 $ 229,089 $ 200,267 Payments for asbestos-related fees and costs, net of insurance recoveries (77,957) (79,277) (66,731) Cash provided from operating activities-GAAP 234,756 149,812 133,536 Capital expenditures (29,308) ( 34,737) ( 21,033) Free cash flow $ 205,448 $ 115,075 $ 112,503 (a) Special items represent non-GAAP adjustments to income made for comparability purposes. See Income Items portion of the Non-GAAP Measures table for additional details. (b) Adjustments to average equity to represent the time-weighted average impact of the special items as detailed in the Income Items portion of the Non-GAAP Measures table. 2